FREE ESSAY ON MARKETING PRINCIPLES

MARKETING PRINCIPLES

A. Definitions
1. ABC
ABC stands for activity based costing. This is defined as a method which identifies
various activities needed to provide a product and determines the cost of these
activities. I would say it is a method of breaking down the process of the business'
activity down to its root components. Then the causes of profit losses can be weeded out.
For example, in a warehouse setting in which I worked, there were a few major departments
which included receiving, stock dept., pick/pack, and shipping department. Merchandise
traveled through the warehouse along this pathway. If say, production (boxes shipped) is
down, we can specify the cause using this technique. Instead of just knowing that
production is down, we may learn that the receiving dock is backed up , which leads to no
merchandise for the stock dept., which results in orders being held up on the flows.
Management can then find the cause of the backup in receiving and go from there.
2. ADEA
Stands for the Age Discrimination in Employment Act, which, according to text, prohibits
age discrimination and mandatory retirement. It was established in 1967. It pretty much
explains itself. Basically, there cannot be a maximum age for employees, and termination
can not be based solely on age. A good example of this would be a mother returning to the
work force. They may be frowned upon due to their age. I have read somewhere that people
over the age of forty are in a protected class, and cannot be discriminated against by
virtue of the law.
3. BARS
This stands for Behaviorally Anchored Rating Scale. It is defined as a rating technique
that relates an employees performance to a specific job related incident. This definition
doesn't really help me. It seems that the procedure is to define certain personality
traits that are essential for a certain function, then to rate the prospective employee
based on a scale of these trait. For example, someone applying to be a chef would be
hired on base on a number of traits, one being prior experience. A ten on the scale would
be something like, "10+ years of experience in a 4 star restaurant", while a zero would
be "no experience". The employees "worth" could be determined by a composite of all these
scales.
4. COBRA
Stands for Consolidated Omnibus Budget Reconciliation Act. This is defined as a policy
established in 1985 which required continued health coverage (paid by employee) after job
termination. This means that health insurers cannot discriminate base on a person's
employment status. An example would be a victim of a downsized company, forced to work
for a company which does not provide health insurance, and so must continue their current
plan. 
5. E P
Stands for Effort yields performance, and is defined as: The degree of expectation that
putting effort into a given task will lead to high performance. I would say, "Is it worth
all the trouble?" For example, no matter how much effort I put into reading a first
edition Crime and Punishment, written in Cyrillic figures, my performance in reading
Russian will not improve in the least. However, if I put a good deal of effort in
actually learning Russian from the beginning, taking a class or reading a how to book,
there is a greater chance that my performance will increase.
6. EVA
Stands for Economic Value Added system. It is defined as a control system that measures
after-tax profits minus the cost of capital invested in tangible assets. This , according
to text, is intended to capture all the things a company can do to add value from its
activities. I would guess that this method roots out all unnecessary assets, as can be
shown by increases and decreases in this figure. If a company is buying new real estate
every year, this may lead to loss of net profits, if the real estate is purchased
carefully. This fact could be discovered using this method.
7.ERG Theory
Defined as a simplification of Maslow's hierarchy of needs. This theory has three levels;
existence, relatedness, and growth. This is a simplification which makes this
psychological theory applicable to the business world. The achievement of these needs
make for a satisfied worker. A warehouse worker first want to feel safe and physically
comfortable at work (existence), then would like to get along with their fellow employees
(relatedness), and finally, would like to know that they are not in a dead end job. If it
is 120 degrees in the warehouse, their first need is not met, and therefore no progress
will be made. In a comfortable warehouse full of jerks, the worker will still have a
ceiling of satisfaction. Finally, even the best environment combined with a dead-end job
will make for an unhappy worker.
8. FDA
Food and Drug administration, a government agency which approves the safety of food
products and drugs as safe for human use. An example of their legislation is the approval
of the abortion pill. Although some may believe it is immoral, the FDA still approved it.
This is because they felt it was safe for consumption, which is the ethical decision. The
FDA is not influenced by moral issues.
9. GATT
General Agreement on Tariff & Trade, which basically mapped out international trade
regulation. The main function is to protect the "little guy" from unfair trade practices.
For example, the United States cannot hamper the chances of a third world county in the
global economy, by imposing unfair tariffs, etc. This is an attempt to bride the gap
between wealthy and poor nations, which evidently hasn't accomplished much.
10. HMO
Stands for health maintenance organization. I couldn't find much in the text about this
one, although I know that it is the same as health insurers. Their major downfall, it
seems, is that they have lost a "human touch", which is at the root of the medical
profession (Hippocratic Oath). For example, possibly an extreme example, a covered person
who receives medical service could possibly not be covered because of something like
forgetting to cross a "T". All business.
11. HR
Human Resources, name for employees, or a department of a company which is responsible
for recruiting, hiring, and keeping employees happy. They can implement strategies to
departments for particular company goals. The functions of the HR dept. at my company
which have affected me include hiring me, referring me to my department, orientation,
explanation of benefits, and approval of my tuition assistance.
12. MBO
Management by objective, basically setting goals for employees as a means of management.
Problems with this method of management is that it does not account for any major changes
in the future. In my warehouse work, we were required to maintain a rate of 75 picks per
hour. This is a decent environment for this type of management, since there is no major
fluctuation in the work. It failed, however, to account that most of its employees
couldn't count to 75.
13. OSHA
Occupation safety and health Act, it establishes mandatory safety and health standards in
organizations. Basically, creates a safe work environment for employees. At almost any
new job, you are required to watch a video about safety with chemicals in the workplace,
even if there are no chemicals. Many places in which I have worked have a huge book which
contains hazards of many chemicals. Also, when I used to do house painting, all of our
ladders had to be OSHA approved, in order to ensure safety.
14. P O
The next step of E P, which means performance yields outcome. Back to my prior example of
learning Russian, I ask myself, "Does my increased performance enhance the outcome of my
work?" For my current job, the answer is a resounding "no". But if I were relocated in
Russia, my increased performance would lead to greater work outcome. This seems to be
rooted in operant conditioning (Skinner), "If I press this bar (performance), will there
be a food pellet (outcome)?
15. SWOT
Stands for Strengths, Weaknesses, Opportunities and threats. This is what is searched for
in a situation analysis, which is used to determine organization performance. According
to the text, this is especially important for companies considering globalization.
Personally, I think this type of strategy would be useful for everyday decision making.
These factors, although I didn't know of this particular strategy, affected my decision
to continue my schooling while working full time. I will demonstrate a more detailed
example later in the exam.
B.
1. The new management paradigm is based in the idea of a learning organization, which all
employees are participants in the decision making process. This is a major diversion from
the old paradigm, which is based in a vertical setup, where all of the power sits at the
top. In the new paradigm, employees are given access to company information, which
results in a more participatory decision making process.
This new paradigm is a result of a very rapidly changing, globalizing economy, diversity
in the workplace, chaos, and the new speed in which information is moved throughout the
world. All of these factors point to the idea of chaos. In the old structure, stability
was the main premise of its success. We are fining now that the non-adaptibilty of these
old structures have lead to their downfall. In a learning organization, the structure is
very dynamic, due to the input of more employees, and the development of better ideas.
All of my jobs have held to the old paradigm. Especially warehouse work, where we are
essentially robots, all legislation is from the top down. Suggestions were humored, but
never acted upon. Although the new global economy is pushing major global corporation
into the new paradigm, the old paradigm still rings true and is very effective for many
smaller, more localized companies, which are still a vital part of our world today.
2.
Symbols can be very important to corporate culture. As cited in the book, symbols can
convey themes which are important to a well functioning corporation. The symbol "Big
Blue", was once a symbol of pride for its employees, but is now a symbol of lost jobs as
a result of massive downsizing in the early 1990's.Unfortunately, I think that most of
these things are laughed off by the general population of employees. The symbol for my
company is a bee, because our late founder thought of us as worker bees, constantly
plugging away at work. I doubt that anyone thinks this while working, instead it is only
cited jokingly, even by managers.
I feel the same applies to stories, slogans and heroes. In a warehouse I worked at, there
where signs that read, "The customer is why." Everyone laughed at that one. Our paycheck
was why. We also used to make up fiction stories of warehouse heroes who could "carry 34
boxes at once". The only time a story or hero could be motivation is when the employee
can see themselves as that person, who succeed against odds. Or stories related to chaos,
which one small event greatly influenced the company. But in general, I feel that these
thing are around the same level as symbols, passively perceived.
3.
I heard that if we were to eliminate the City of New York right now, that the work, not
just the United States, would enter a severe depression. This, in a nutshell,
demonstrates borderlessness. Not since the 1920's has the US adapted a an isolationist
policy, and now, with the worldwide economy, it is impossible. An example would be our
dependency of foreign oil, which if cut off, would probably ruin our nation for a period
of time. We no longer have the means to support ourselves, nor do most other first world
countries. We are all, almost to the point of danger, interdependent.
Statelessness goes back to the new management paradigm and chaos theory. In the last ten
years, companies have undergone drastic changes. General Motors now uses automobiles as a
mean of making profits on fincancing interest. They are now essential in the banking
industry. When a company is less centralized and more dynamic, you may never have the
same day twice, in theory. This company is stateless, compared to the warehouse, where
the employees have been doing essentially the same exact thing for 10+ years.
4.
Yes. If the corporations forecast a loss of money, they will adapt. I would hypothesize
that certain practices are taken as a trade-off to the maximum liability for a related
irresponsible action. If there is no ceiling for liability, I think that these big
corporations would be much more cautious in their procedure, especially those which may
pose a risk to the environment.
However, to implement such legislation, it must be done gradually, yet steadily, to
ensure that oil production is not halted. 99% of environmentalists are 100% dependent on
oil, as is the rest of the population. Extreme legislation, implemented too quickly would
be more immediately detrimental to human beings that deterioration of the environment. It
is important to know that current practices will also lead to the pre-mature extinction
of humans at some point in time. Therefore, we must find a middle ground.
5.
Strengths- Scenic location, good education with qualified staff, affordable price for
in-state residents
Weaknesses- Overshadowed by university centers such as SUNY Albany and SUNY Binghamton,
reputation as a drug school, remote location, medium level school, "Well, it's not
Harvard.", 
Opportunities- Increased local population, i.e. Rockland and Orange counties, increased
national enrollment, vast market for local people looking to return to school 
Threats- new SUNY in Orange county, relative lack of room for expansion
C.
1. Chaos theory states that the universe is a series of random event, and that one
insignificant even could have very far reaching consequences. In order to survive in a
chaotic world, a species must be dynamic and adaptable. This is why lower orders of life
have outlived higher orders by sometimes immeasurable amounts; their ability to adapt to
a changing environment, e.g. ice ages, meteorites, etc. 
This type of thing can be conveyed to the mindset of a modern, successful company in
today's chaotic global environment. The strong and rigid used to be the most powerful in
the stable industrial age, but now the lean, efficient, dynamic company under the new
management paradigm will succeed. It's like an old muscle car. They can beat any car in
the straight drag race, but the smaller, light, better designed car will respond much
more successfully to the winding, chaotic road.
The reason chaos theory has influence management so greatly is because we are now in a
chaotic world economy. One hundred years ago, there was no need for anything more
progressive and dynamic than the old management paradigm 
2.
Culture shock is another result of the chaotic, globalizing economy. I have heard that if
you don't know how to bow in Japan, don't, since it itself is a dialect, and more likely
than not, you would end up insulting your host. Also, a firm handshake and eye contact
are seen as a threat in Japan, although they are an essential in American culture. For
the American who has learned this the hard way, they have experienced culture shock. 
When an American works or manages in a foreign land, they are almost always bombarded
with new values of their new colleagues. It is impossible to determine what is "right",
and for now, it is essential that we adapt to the mores and ethics of these different
cultures. As the global marketplace develops, I believe that all business practices will
diffuse and mix with each other, and in time, form one established way of acting in a
workplace setting.
I could not find much about future shock, so I will wager a guess that it occurs when
classically trained managers encounter the new global economy, and watch the demise of
all the "truths" they hold dear, the same way an atheist would feel if she/he saw God
face to face. I would also venture a guess that this occurred when the old managers, used
to their power, saw their methods lose strength and validity.
3.
A mission statement is defined in the text as a broadly stated definition of an
organization's basic business scope and operations that distinguishes it from similar
types of organizations. This makes me think of the electronics store, "Best Buy". I was
browsing in the store when the salesman came up to me and went on to explain how he
didn't work on commission and that he would not pressure me into a high priced product..
The mission statement for that company probably stated that in order to set them apart
from other electronics stores.
A mission statement focuses the goals of the organization in order to be successful.
Possibly methods such as ABC analysis could be used with a mission statement. The
functions of the company, or lack thereof could be compared to see if they are consistent
with the mission statement, assuming "success" is not being achieved. If they are, the
mission must be changed, if not, the actions can be changed.
It is important that the mission statement be flexible, as to "conform" to the new
management paradigm. If it does not take chaos into account, it is likely that the
company's goals will not be achieved.
4.
Total quality management (TQM) is defined as a management approach that focuses
orgainzationwide attention on delivering total quality to customers and includes (1)
employee involvement, (2) focus on the customer, (3) benchmarking, and (4) continuous
improvement. This seems like another interpretation of the new management paradigm, as
evident by the first part, employee involvement. TQM assumes that the input and
involvement of employees is one of the main parts of providing customer satisfaction,
which is the goal of any organization, chaos or not.
Which leads to focus on the customer. This is a departure from the old focus on profits.
In the old paradigm, profits were the measure of success. Now, as we globalize, it is
more important to adapt to a variety of needs and desires of a broader base of customers.
Benchmarking is setting a standard. This seems like an idea of the old paradigm, i.e.
what was good enough yesterday is good enough today. This is not true, although
benchmarking is vital as a measure of where not to fall below.
This brings us to the fourth part, which is continuous improvement. What was good enough
yesterday is NOT good enough today. This should apply to individuals as well as
businesses. New benchmarks must be set for success in the chaotic atmosphere. 
5.
The concept of virtual corporation is the icing on the cake for ideas such as
globalization and interdependence. Buy a personal computer and you will see a
manifestation of a virtual corporation. 20 years ago, IBM, more or less, made the whole
computer (chip, software, harware, etc.) Now when you buy, for example, a new Dell
system, you may get a Sony monitor, Microsoft Keyboard, mouse, and operating system,
Intel Chip, and a cannon printer. 
The idea is that Dell focuses on manufacturing the computers. They leave the speed of the
chip and the clarity of the monitor to Intel and Sony, respectively. This results in a
much more efficient corporation which isn't "spread too thin". It also results in a
better product, and more profits for more companies, fueled by high customer
satisfaction.
One flaw in this type of setup is an interdependency between all of these companies. If
Intel is having problems, then 99% of PC manufacturers are having them too. This is
rarely the case, since each company is only concerned with the one task at hand. Virtual
corporations are just another result of decentralization and more free and faster
exchange of goods and ideas.
Bibliography
Principles of Marketing text, 1999