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A business, also known as an enterprise, agency or a firm, is an entity involved in the provision of goods and/or services to consumers.
Businesses are prevalent in capitalist economies, where most of them are privately owned and provide goods and services to customers in exchange for other goods, services, or money.
Businesses may also be social non-profit enterprises or state-owned public enterprises targeted for specific social and economic objectives. A business owned by multiple individuals may be formed as an incorporated company or jointly organized as a partnership.
Countries have different laws that may ascribe different rights to the various business entities.
Business can refer to a particular organization or to an entire market sector, e.g. "the music business". Compound forms such as agribusiness represent subsets of the word's broader meaning, which encompasses all activity by suppliers of goods and services. The goal is for sales to be more than expenditures resulting in a profit.
Basic forms of ownership:
Forms of business ownership vary by jurisdiction, but several common forms exist:
Business Classifications:
Management:
Main article: Management
The efficient and effective operation of a business, and study of this subject, is called management. The major branches of management are,
Owners may administer their businesses themselves, or employ managers to do this for them.
Whether they are owners or employees, managers administer three primary components of the business' value: its financial resources, capital or tangible resources, and human resources. These resources are administered in at least five functional areas:
Restructuring state enterprises:
In recent decades, various countries modeled some of their assets and enterprises after business enterprises. In 2003, for example, the People's Republic of China modeled 80% of its state-owned enterprises on a company-type management system.
Many state institutions and enterprises in China and Russia have transformed into joint-stock companies, with part of their shares being listed on public stock markets.
Business process management (BPM) is a holistic management approach focused on aligning all aspects of an organization with the wants and needs of clients. It promotes business effectiveness and efficiency while striving for innovation, flexibility, and integration with technology. BPM attempts to improve processes continuously. It can therefore be described as a "process optimization process." It is argued that BPM enables organizations to be more efficient, effective and capable of change than a functionally focused, traditional hierarchical management approach.
Organization and government regulation:
See also: Theory of the firm
Most legal jurisdictions specify the forms of ownership that a business can take, creating a body of commercial law for each type.
The major factors affecting how a business is organized are usually:
Many businesses are operated through a separate entity such as a corporation or a partnership (either formed with or without limited liability). Most legal jurisdictions allow people to organize such an entity by filing certain charter documents with the relevant Secretary of State or equivalent, and complying with certain other ongoing obligations.
The relationships and legal rights of shareholders, limited partners, or members are governed partly by the charter documents and partly by the law of the jurisdiction where the entity is organized.
Generally speaking, shareholders in a corporation, limited partners in a limited partnership, and members in a limited liability company are shielded from personal liability for the debts and obligations of the entity, which is legally treated as a separate "person". This means that unless there is misconduct, the owner's own possessions are strongly protected in law if the business does not succeed.
Where two or more individuals own a business together but have failed to organize a more specialized form of vehicle, they will be treated as a general partnership. The terms of a partnership are partly governed by a partnership agreement if one is created, and partly by the law of the jurisdiction where the partnership is located.
No paperwork or filing is necessary to create a partnership, and without an agreement, the relationships and legal rights of the partners will be entirely governed by the law of the jurisdiction where the partnership is located. A single person who owns and runs a business is commonly known as a sole proprietor, whether that person owns it directly or through a formally organized entity.
A few relevant factors to consider in deciding how to operate a business include:
Commercial law:
A very detailed and well-established body of rules that evolved over a very long period of time applies to commercial transactions. The need to regulate trade and commerce and resolve business disputes helped shape the creation of law and courts.
The Code of Hammurabi dates back to about 1772 BC for example, and contains provisions that relate, among other matters, to shipping costs and dealings between merchants and brokers.
In many countries it is difficult to compile all the laws that can affect a business into a single reference source. Laws can govern treatment of labour and employee relations, worker protection and safety, discrimination on the basis of age, gender, disability, race, and in some jurisdictions, sexual orientation, and the minimum wage, as well as unions, worker compensation, and working hours and leave.
Some specialized businesses may also require licenses, either due to laws governing entry into certain trades, occupations or professions, that require special education, or to raise revenue for local governments. Professions that require special licenses include law, medicine, piloting aircraft, selling liquor, radio broadcasting, selling investment securities, selling used cars, and roofing. Local jurisdictions may also require special licenses and taxes just to operate a business.
Some businesses are subject to ongoing special regulation, for example, public utilities, investment securities, banking, insurance, broadcasting, aviation, and health care providers. Environmental regulations are also very complex and can affect many businesses.
Capital:
When businesses need to raise money (called capital), they sometimes offer securities for sale.
Capital may be raised through private means, by an initial public offering or IPO on a stock exchange, or in other ways.
Major stock exchanges include,
Most countries with capital markets have at least one.
Businesses that have gone public are subject to regulations concerning their internal governance, such as how executive officers' compensation is determined, and when and how information is disclosed to shareholders and to the public.
In the United States, these regulations are primarily implemented and enforced by the United States Securities and Exchange Commission (SEC).
Other Western nations have comparable regulatory bodies. The regulations are implemented and enforced by the China Securities Regulation Commission (CSRC) in China. In Singapore, the regulation authority is the Monetary Authority of Singapore (MAS), and in Hong Kong, it is the Securities and Futures Commission (SFC).
The proliferation and increasing complexity of the laws governing business have forced increasing specialization in corporate law. It is not unheard of for certain kinds of corporate transactions to require a team of five to ten attorneys due to sprawling regulation.
Commercial law spans general corporate law, employment and labor law, health-care law, securities law, mergers and acquisitions, tax law, employee benefit plans, food and drug regulation, intellectual property law on copyrights, patents, trademarks and such, telecommunications law, financing.
Other types of capital sourcing includes crowd sourcing on the internet, venture capital, bank loans and debentures.
Intellectual property:
Businesses often have important "intellectual property" that needs protection from competitors for the company to stay profitable. This could require patents, copyrights, trademarks or preservation of trade secrets.
Most businesses have names, logos and similar branding techniques that could benefit from trademarking. Patents and copyrights in the United States are largely governed by federal law, while trade secrets and trademarking are mostly a matter of state law.
Because of the nature of intellectual property, a business needs protection in every jurisdiction in which they are concerned about competitors.
Many countries are signatories to international treaties concerning intellectual property, and thus companies registered in these countries are subject to national laws bound by these treaties. In order to protect trade secrets, companies may require employees to sign non-compete clauses which will impose limitations on an employee's interactions with stakeholders, and competitors.
Click on any of the following hyperlinks for additional information:
Businesses are prevalent in capitalist economies, where most of them are privately owned and provide goods and services to customers in exchange for other goods, services, or money.
Businesses may also be social non-profit enterprises or state-owned public enterprises targeted for specific social and economic objectives. A business owned by multiple individuals may be formed as an incorporated company or jointly organized as a partnership.
Countries have different laws that may ascribe different rights to the various business entities.
Business can refer to a particular organization or to an entire market sector, e.g. "the music business". Compound forms such as agribusiness represent subsets of the word's broader meaning, which encompasses all activity by suppliers of goods and services. The goal is for sales to be more than expenditures resulting in a profit.
Basic forms of ownership:
Forms of business ownership vary by jurisdiction, but several common forms exist:
- Sole proprietorship: A sole proprietorship, also known as a sole trader, is owned by one person and operates for their benefit. The owner may operate the business alone or with other people. A sole proprietor has unlimited liability for all obligations incurred by the business, whether from operating costs or judgments against the business. All assets of the business belong to a sole proprietor, including, for example, computer infrastructure, any inventory, manufacturing equipment and/or retail fixtures, as well as any real property owned by the business.
- Partnership: A partnership is a business owned by two or more people. In most forms of partnerships, each partner has unlimited liability for the debts incurred by the business. The three most prevalent types of for-profit partnerships are general partnerships, limited partnerships, and limited liability partnerships.
- Corporation: The owners of a corporation have limited liability and the business has a separate legal personality from its owners. Corporations can be either government-owned or privately owned. They can organize either for profit or as nonprofit organizations. A privately owned, for-profit corporation is owned by its shareholders, who elect a board of directors to direct the corporation and hire its managerial staff. A privately owned, for-profit corporation can be either privately held by a small group of individuals, or publicly held, with publicly traded shares listed on a stock exchange.
- Cooperative: Often referred to as a "co-op", a cooperative is a limited-liability business that can organize as for-profit or not-for-profit. A cooperative differs from a corporation in that it has members, not shareholders, and they share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy.
Business Classifications:
- Agriculture and mining businesses produce raw material, such as plants or minerals.
- Financial businesses include banks and other companies that generate profits through investment and management of capital.
- Information businesses generate profits primarily from the sale of intellectual property - they include movie studios, publishers and Internet and software companies.
- Manufacturers produce products, either from raw materials or from component parts, then sell their products at a profit. Companies that make tangible goods such as cars, clothing or pipes are examples of manufacturers.
- Real-estate businesses sell, rent, and develop properties - including land, residential homes, and other buildings.
- Retailers and distributors act as middlemen and get goods produced by manufacturers to the intended consumers; they make their profits by marking up their prices. Most stores and catalog companies are distributors or retailers.
- Service businesses offer intangible goods or services and typically charge for labor or other services provided to government, to consumers, or to other businesses. Interior decorators, consulting firms and entertainers are service businesses.
- Transportation businesses deliver goods and individuals to their destinations for a fee.
- Utilities produce public services such as electricity or sewage treatment, usually under a government contract.
Management:
Main article: Management
The efficient and effective operation of a business, and study of this subject, is called management. The major branches of management are,
- financial management,
- marketing management,
- human resource management,
- strategic management,
- production management,
- operations management,
- service management,
- and information technology management.
Owners may administer their businesses themselves, or employ managers to do this for them.
Whether they are owners or employees, managers administer three primary components of the business' value: its financial resources, capital or tangible resources, and human resources. These resources are administered in at least five functional areas:
- legal contracting,
- manufacturing or service production,
- marketing,
- accounting,
- financing,
- and human resources.
Restructuring state enterprises:
In recent decades, various countries modeled some of their assets and enterprises after business enterprises. In 2003, for example, the People's Republic of China modeled 80% of its state-owned enterprises on a company-type management system.
Many state institutions and enterprises in China and Russia have transformed into joint-stock companies, with part of their shares being listed on public stock markets.
Business process management (BPM) is a holistic management approach focused on aligning all aspects of an organization with the wants and needs of clients. It promotes business effectiveness and efficiency while striving for innovation, flexibility, and integration with technology. BPM attempts to improve processes continuously. It can therefore be described as a "process optimization process." It is argued that BPM enables organizations to be more efficient, effective and capable of change than a functionally focused, traditional hierarchical management approach.
Organization and government regulation:
See also: Theory of the firm
Most legal jurisdictions specify the forms of ownership that a business can take, creating a body of commercial law for each type.
The major factors affecting how a business is organized are usually:
- The size and scope of the business firm and its structure, management, and ownership, broadly analyzed in the theory of the firm. Generally a smaller business is more flexible, while larger businesses, or those with wider ownership or more formal structures, will usually tend to be organized as corporations or (less often) partnerships. In addition, a business that wishes to raise money on a stock market or to be owned by a wide range of people will often be required to adopt a specific legal form to do so.
- The sector and country. Private profit-making businesses are different from government-owned bodies. In some countries, certain businesses are legally obliged to be organized in certain ways.
- Limited Liability Companies (LLC), limited liability partnerships, and other specific types of business organization protect their owners or shareholders from business failure by doing business under a separate legal entity with certain legal protections. In contrast, unincorporated businesses or persons working on their own are usually not so protected.
- Tax advantages. Different structures are treated differently in tax law, and may have advantages for this reason.
- Disclosure and compliance requirements. Different business structures may be required to make less or more information public (or report it to relevant authorities), and may be bound to comply with different rules and regulations.
Many businesses are operated through a separate entity such as a corporation or a partnership (either formed with or without limited liability). Most legal jurisdictions allow people to organize such an entity by filing certain charter documents with the relevant Secretary of State or equivalent, and complying with certain other ongoing obligations.
The relationships and legal rights of shareholders, limited partners, or members are governed partly by the charter documents and partly by the law of the jurisdiction where the entity is organized.
Generally speaking, shareholders in a corporation, limited partners in a limited partnership, and members in a limited liability company are shielded from personal liability for the debts and obligations of the entity, which is legally treated as a separate "person". This means that unless there is misconduct, the owner's own possessions are strongly protected in law if the business does not succeed.
Where two or more individuals own a business together but have failed to organize a more specialized form of vehicle, they will be treated as a general partnership. The terms of a partnership are partly governed by a partnership agreement if one is created, and partly by the law of the jurisdiction where the partnership is located.
No paperwork or filing is necessary to create a partnership, and without an agreement, the relationships and legal rights of the partners will be entirely governed by the law of the jurisdiction where the partnership is located. A single person who owns and runs a business is commonly known as a sole proprietor, whether that person owns it directly or through a formally organized entity.
A few relevant factors to consider in deciding how to operate a business include:
- General partners in a partnership (other than a limited liability partnership), plus anyone who personally owns and operates a business without creating a separate legal entity, are personally liable for the debts and obligations of the business.
- Generally, corporations are required to pay tax just like "real" people. In some tax systems, this can give rise to so-called double taxation, because first the corporation pays tax on the profit, and then when the corporation distributes its profits to its owners, individuals have to include dividends in their income when they complete their personal tax returns, at which point a second layer of income tax is imposed.
- In most countries, there are laws which treat small corporations differently from large ones. They may be exempt from certain legal filing requirements or labor laws, have simplified procedures in specialized areas, and have simplified, advantageous, or slightly different tax treatment.
- "Going public" through a process known as an initial public offering (IPO) means that part of the business will be owned by members of the public. This requires organization as a distinct entity, and compliance with a tighter set of laws and procedures. Most public entities are corporations that have sold shares, but increasingly there are also public LLC's that sell units (sometimes also called shares), and other more exotic entities as well, such as, for example, real estate investment trusts in the USA, and unit trusts in the UK. A general partnership cannot "go public."
Commercial law:
A very detailed and well-established body of rules that evolved over a very long period of time applies to commercial transactions. The need to regulate trade and commerce and resolve business disputes helped shape the creation of law and courts.
The Code of Hammurabi dates back to about 1772 BC for example, and contains provisions that relate, among other matters, to shipping costs and dealings between merchants and brokers.
In many countries it is difficult to compile all the laws that can affect a business into a single reference source. Laws can govern treatment of labour and employee relations, worker protection and safety, discrimination on the basis of age, gender, disability, race, and in some jurisdictions, sexual orientation, and the minimum wage, as well as unions, worker compensation, and working hours and leave.
Some specialized businesses may also require licenses, either due to laws governing entry into certain trades, occupations or professions, that require special education, or to raise revenue for local governments. Professions that require special licenses include law, medicine, piloting aircraft, selling liquor, radio broadcasting, selling investment securities, selling used cars, and roofing. Local jurisdictions may also require special licenses and taxes just to operate a business.
Some businesses are subject to ongoing special regulation, for example, public utilities, investment securities, banking, insurance, broadcasting, aviation, and health care providers. Environmental regulations are also very complex and can affect many businesses.
Capital:
When businesses need to raise money (called capital), they sometimes offer securities for sale.
Capital may be raised through private means, by an initial public offering or IPO on a stock exchange, or in other ways.
Major stock exchanges include,
- the Shanghai Stock Exchange,
- Singapore Exchange, Hong Kong Stock Exchange,
- New York Stock Exchange and Nasdaq (USA),
- the London Stock Exchange (UK),
- the Tokyo Stock Exchange (Japan),
- and Bombay Stock Exchange (India).
Most countries with capital markets have at least one.
Businesses that have gone public are subject to regulations concerning their internal governance, such as how executive officers' compensation is determined, and when and how information is disclosed to shareholders and to the public.
In the United States, these regulations are primarily implemented and enforced by the United States Securities and Exchange Commission (SEC).
Other Western nations have comparable regulatory bodies. The regulations are implemented and enforced by the China Securities Regulation Commission (CSRC) in China. In Singapore, the regulation authority is the Monetary Authority of Singapore (MAS), and in Hong Kong, it is the Securities and Futures Commission (SFC).
The proliferation and increasing complexity of the laws governing business have forced increasing specialization in corporate law. It is not unheard of for certain kinds of corporate transactions to require a team of five to ten attorneys due to sprawling regulation.
Commercial law spans general corporate law, employment and labor law, health-care law, securities law, mergers and acquisitions, tax law, employee benefit plans, food and drug regulation, intellectual property law on copyrights, patents, trademarks and such, telecommunications law, financing.
Other types of capital sourcing includes crowd sourcing on the internet, venture capital, bank loans and debentures.
Intellectual property:
Businesses often have important "intellectual property" that needs protection from competitors for the company to stay profitable. This could require patents, copyrights, trademarks or preservation of trade secrets.
Most businesses have names, logos and similar branding techniques that could benefit from trademarking. Patents and copyrights in the United States are largely governed by federal law, while trade secrets and trademarking are mostly a matter of state law.
Because of the nature of intellectual property, a business needs protection in every jurisdiction in which they are concerned about competitors.
Many countries are signatories to international treaties concerning intellectual property, and thus companies registered in these countries are subject to national laws bound by these treaties. In order to protect trade secrets, companies may require employees to sign non-compete clauses which will impose limitations on an employee's interactions with stakeholders, and competitors.
Click on any of the following hyperlinks for additional information:
- Accounting
- Advertising
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- Big business
- Business acumen
- Business broker
- Business ethics
- Business hours
- List of business law topics
- Business mathematics
- Business mediator
- Business people
- Business schools
- Business trip
- Business valuation
- Capitalism
- Change management analyst
- Commerce
- Company
- Corporate law
- Corporation
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- Cost overrun
- Economics
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- Entrepreneurship
- List of business films
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- List of oldest companies
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- Types of business entity
- Trade name
Best (Business) Practices, including those accredited by the International Standards Organization (ISO)
YouTube Video: What ISO standards do for you
Pictured: ISO Standards and their Impact on Technology by ECM Directions
Best (Business) Practices:
A best practice is a method or technique that has been generally accepted as superior to any alternatives because it produces results that are superior to those achieved by other means or because it has become a standard way of doing things, e.g., a standard way of complying with legal or ethical requirements.
Best practices are used to maintain quality as an alternative to mandatory legislated standards and can be based on self-assessment or benchmarking. Best practice is a feature of accredited management standards such as ISO 9000 and ISO 14001.
Some consulting firms specialize in the area of best practice and offer pre-made 'templates' to standardize business process documentation. Sometimes a "best practice" is not applicable or is inappropriate for a particular organization's needs.
A key strategic talent required when applying best practice to organizations is the ability to balance the unique qualities of an organization with the practices that it has in common with others.
Good operating practice is a strategic management term. More specific uses of the term include good agricultural practices, good manufacturing practice, good laboratory practice, good clinical practice and good distribution practice.
Click on any of the following blue hyperlinks for further amplification:
International Organization for Standardization:
The International Organization for Standardization (ISO) is an international standard-setting body composed of representatives from various national standards organizations.
Founded on 23 February 1947, the organization promotes worldwide proprietary, industrial and commercial standards. It is headquartered in Geneva, Switzerland, and as of 2015 works in 163 countries.
It was one of the first organizations granted general consultative status with the United Nations Economic and Social Council.
ISO, the International Organization for Standardization, is an independent, non-governmental organization, the members of which are the standards organizations of the 162 member countries. It is the world's largest developer of voluntary international standards and facilitates world trade by providing common standards between nations. Nearly twenty thousand standards have been set covering everything from manufactured products and technology to food safety, agriculture and healthcare.
Use of the standards aids in the creation of products and services that are safe, reliable and of good quality. The standards help businesses increase productivity while minimizing errors and waste. By enabling products from different markets to be directly compared, they facilitate companies in entering new markets and assist in the development of global trade on a fair basis. The standards also serve to safeguard consumers and the end-users of products and services, ensuring that certified products conform to the minimum standards set internationally.
The three official languages of the ISO are English, French, and Russian. The name of the organization in French is Organisation internationale de normalisation, and in Russian, Международная организация по стандартизации.
Both the name "ISO" and the logo are registered trademarks, and their use is restricted.
ISO is a voluntary organization whose members are recognized authorities on standards, each one representing one country. Members meet annually at a General Assembly to discuss ISO's strategic objectives. The organization is coordinated by a Central Secretariat based in Geneva.
A Council with a rotating membership of 20 member bodies provides guidance and governance, including setting the Central Secretariat's annual budget.
The Technical Management Board is responsible for over 250 technical committees, who develop the ISO standards.
IEC Joint Committees:ISO has formed joint committees with the International Electrotechnical Commission (IEC) to develop standards and terminology in the areas of electrical and electronic related technologies.
ISO/IEC JTC : Information technology Main article: ISO/IEC JTC 1: ISO/IEC Joint Technical Committee 1 (JTC 1) was created in 1987 to "[d]evelop, maintain, promote and facilitate IT standards".
ISO/IEC JTC 2 Joint Project Committee – Energy efficiency and renewable energy sources – Common terminologyISO/IEC Joint Technical Committee 2 (JTC 2) was created in 2009 for the purpose of "[s]tandardization in the field of energy efficiency and renewable energy sources".
Membership:
ISO has 162 national members.
ISO has three membership categories:
Financing:
ISO is funded by a combination of:
For further amplification, click on any of the following blue hyperlinks:
A best practice is a method or technique that has been generally accepted as superior to any alternatives because it produces results that are superior to those achieved by other means or because it has become a standard way of doing things, e.g., a standard way of complying with legal or ethical requirements.
Best practices are used to maintain quality as an alternative to mandatory legislated standards and can be based on self-assessment or benchmarking. Best practice is a feature of accredited management standards such as ISO 9000 and ISO 14001.
Some consulting firms specialize in the area of best practice and offer pre-made 'templates' to standardize business process documentation. Sometimes a "best practice" is not applicable or is inappropriate for a particular organization's needs.
A key strategic talent required when applying best practice to organizations is the ability to balance the unique qualities of an organization with the practices that it has in common with others.
Good operating practice is a strategic management term. More specific uses of the term include good agricultural practices, good manufacturing practice, good laboratory practice, good clinical practice and good distribution practice.
Click on any of the following blue hyperlinks for further amplification:
- In public policy
- Use in health and human services
- In action
- Other domains
- Critique
- See also:
- Anti-pattern - a commonly followed standard or practice which is in fact far from the best solution
- Benchmarking
- Best available technology
- Best coding practices
- Best of all possible worlds
- Business rule
- GxP
- Not invented here - conscious rejection of best practices originating elsewhere
- Pre-assessment
- Reinventing the wheel - solving a problem from scratch without regard to previous solutions by others
- Standard of Good Practice
- Strategic management
International Organization for Standardization:
The International Organization for Standardization (ISO) is an international standard-setting body composed of representatives from various national standards organizations.
Founded on 23 February 1947, the organization promotes worldwide proprietary, industrial and commercial standards. It is headquartered in Geneva, Switzerland, and as of 2015 works in 163 countries.
It was one of the first organizations granted general consultative status with the United Nations Economic and Social Council.
ISO, the International Organization for Standardization, is an independent, non-governmental organization, the members of which are the standards organizations of the 162 member countries. It is the world's largest developer of voluntary international standards and facilitates world trade by providing common standards between nations. Nearly twenty thousand standards have been set covering everything from manufactured products and technology to food safety, agriculture and healthcare.
Use of the standards aids in the creation of products and services that are safe, reliable and of good quality. The standards help businesses increase productivity while minimizing errors and waste. By enabling products from different markets to be directly compared, they facilitate companies in entering new markets and assist in the development of global trade on a fair basis. The standards also serve to safeguard consumers and the end-users of products and services, ensuring that certified products conform to the minimum standards set internationally.
The three official languages of the ISO are English, French, and Russian. The name of the organization in French is Organisation internationale de normalisation, and in Russian, Международная организация по стандартизации.
Both the name "ISO" and the logo are registered trademarks, and their use is restricted.
ISO is a voluntary organization whose members are recognized authorities on standards, each one representing one country. Members meet annually at a General Assembly to discuss ISO's strategic objectives. The organization is coordinated by a Central Secretariat based in Geneva.
A Council with a rotating membership of 20 member bodies provides guidance and governance, including setting the Central Secretariat's annual budget.
The Technical Management Board is responsible for over 250 technical committees, who develop the ISO standards.
IEC Joint Committees:ISO has formed joint committees with the International Electrotechnical Commission (IEC) to develop standards and terminology in the areas of electrical and electronic related technologies.
ISO/IEC JTC : Information technology Main article: ISO/IEC JTC 1: ISO/IEC Joint Technical Committee 1 (JTC 1) was created in 1987 to "[d]evelop, maintain, promote and facilitate IT standards".
ISO/IEC JTC 2 Joint Project Committee – Energy efficiency and renewable energy sources – Common terminologyISO/IEC Joint Technical Committee 2 (JTC 2) was created in 2009 for the purpose of "[s]tandardization in the field of energy efficiency and renewable energy sources".
Membership:
ISO has 162 national members.
ISO has three membership categories:
- Member bodies are national bodies considered the most representative standards body in each country. These are the only members of ISO that have voting rights.
- Correspondent members are countries that do not have their own standards organization. These members are informed about ISO's work, but do not participate in standards promulgation.
- Subscriber members are countries with small economies. They pay reduced membership fees, but can follow the development of standards.
Financing:
ISO is funded by a combination of:
- Organizations that manage the specific projects or loan experts to participate in the technical work.
- Subscriptions from member bodies. These subscriptions are in proportion to each country's gross national product and trade figures.
- Sale of standards.
For further amplification, click on any of the following blue hyperlinks:
- International Standards and other publications
- Standardization process
- Products named after ISO
- Criticism
- See also:
- American National Standards Institute
- AP (Associated Press) Stylebook.
- Countries in the International Organization for Standardization
- Institute of Environmental Sciences and Technology
- Interface 2010, the Interface Marketing Supplier Integration Institute.
- International Classification for Standards
- International Electrotechnical Commission
- International healthcare accreditation
- IEEE Standards Association
- International Telecommunication Union
- List of International Organization for Standardization standards
- ISO divisions
- ISO/TC 37 "Terminology and other language and content resources", a fundamental ISO standardization committee.
- ISO/TC 68
- TC 46/SC 9
- ISO/TC 211
- ISO/TC 215
- ISO/TC 223
- ISO/TC 262
- ISO/TC 292
- Standardization
- Standards organization
- Terminology planning policy
- Internet Engineering Task Force
Small Business Administration
YouTube Video: An Introduction to the Small Business Administration
YouTube Video by the SBA: "How to Write a Business Plan"
Pictured below: "What We Do" by the SBA
The Small Business Administration (SBA) is a United States government agency that provides support to entrepreneurs and small businesses. The mission of the Small Business Administration is "to maintain and strengthen the nation's economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters". The agency's activities are summarized as the "3 Cs" of capital, contracts and counseling.
SBA loans are made through banks, credit unions and other lenders who partner with the SBA. The SBA provides a government-backed guarantee on part of the loan. Under the Recovery Act and the Small Business Jobs Act, SBA loans were enhanced to provide up to a 90 percent guarantee in order to strengthen access to capital for small businesses after credit froze in 2008. The agency had record lending volumes in late 2010.
SBA helps lead the federal government's efforts to deliver 23 percent of prime federal contracts to small businesses. Small business contracting programs include efforts to ensure that certain federal contracts reach woman-owned and service-disabled veteran-owned small businesses as well as businesses participating in programs such as 8(a) and HUBZone.
SBA has at least one office in each U.S. state. In addition, the agency provides grants to support counseling partners, including approximately 900 Small Business Development Centers (often located at colleges and universities), 110 Women's Business Centers, and SCORE, a volunteer mentor corps of retired and experienced business leaders with approximately 350 chapters.
These counseling services provide services to over 1 million entrepreneurs and small business owners annually. President Obama announced in January 2012 that he would elevate the SBA into the Cabinet, a position it last held during the Clinton administration, thus making the Administrator of the Small Business Administration a cabinet-level position.
Organizational structure:
The SBA has an Administrator and a Deputy Administrator. It has an associate administrator or director for the following offices:
Senate-confirmed appointees include: Administrator, Deputy Administrator, Chief Counsel for Advocacy, and Inspector General.
Lending Programs:
Loan Guarantee Program:
The 7(a) Loan Guarantee Program is designed to help entrepreneurs start or expand their small businesses. The program makes capital available to small businesses through bank and non-bank lending institutions. The Small Business Jobs Act of 2010 increased the maximum size of these loans, indefinitely, from $2 million to $5 million.
Disaster Loan Program:
Homeowners and renters are eligible for long-term, low-interest loans to rebuild or repair a damaged property to pre-disaster condition.
Businesses are also eligible for long-term, low-interest loans to recover from declared disasters. Disaster Relief Loans are often approved within 21 days. However, after Hurricane Katrina the SBA processed applications, on average, in about 74 days.
If a business with a Disaster Relief Loan defaults on the loan, and the business is closed, the SBA will pursue the business owner to liquidate all personal assets, to satisfy an outstanding balance. The IRS will withhold any tax refund expected by the former business owner and apply the amount toward the loan balance.
Entrepreneurial development programs:
Small Business Development Centers:
Approximately 900 Small Business Development Center sites are funded through a combination of state and SBA support in the form of matching grants. Typically, SBDCs are co-located at community colleges, state universities, and/or other entrepreneurial hubs. Cole Browne leads the SBA in purchasing of new Development Center sites.
Women's Business Centers:
Women's Business Centers (WBCs) represent a national network of over 100 non-profit educational centers throughout the United States and its territories, funded in part through SBA support. The maximum SBA grant for a WBC is $150,000 per year, although most centers receive less.
WBCs are designed to assist women in starting and growing small businesses, though their services are available to all. WBCs help women succeed in business by providing training, mentoring, business development, and financing opportunities to over 100,000 women entrepreneurs annually across the nation. Women’s Business Centers are mandated to serve a significant number of socially and economically disadvantaged individuals.
Research conducted by the Association of Women’s Business Centers indicates that 64% of WBC clients in 2012 were low-income, 39% were persons of color, and 70% were nascent businesses. WBC services are provided in more than 35 languages, with 64% of WBCs providing services in two or more languages. In addition to business training services, 68% of WBCs provide mentoring services, and 45% provide microloans.
SCORE:
SCORE, the nation's largest network of volunteer, expert business mentors, was founded in 1964 as a resource partner of the U.S. Small Business Administration. SCORE has since educated more than 10 million current and aspiring U.S. small business owners through its free mentoring and free and low-cost workshops.
In 2016, SCORE’s more than 10,000 volunteer mentors helped their 125,000 clients create 54,072 small businesses, adding 78,691 non-owner jobs to the U.S. economy.
SCORE’s core service offering is its mentoring program, through which volunteer mentors (all experienced in entrepreneurship and related areas of expertise) provide free counsel to small business clients.
Mentors, operating out of 300 chapters nationwide, work with their clients to address issues related to starting and growing a business, including writing business plans, developing products, conceiving marketing strategies, hiring staff, and more.
Clients access their mentors via free, ongoing face-to-face mentoring sessions or through email or video mentoring services.
In addition to mentoring, SCORE also offers free and low-cost educational workshops each year, both online and in-person. In 2016, clients attended 119,957 online workshop sessions, while 237,712 local workshop attendees benefited from SCORE’s in-person educational programming.
Veteran Business Outreach Centers (VBOC):
SBA's Office of Veteran Business Development operates twenty Veteran Business Outreach Centers through grants and cooperative agreements with organizations which provide technical assistance to businesses owned by veterans and family members. VBOCs also provide instructors for the SBA's program Boots to Business.
Innovation and Strategic Initiatives:
The SBA also supports regional innovation clusters across the country.
Federal contracting and business development programs:
The 8(a) Business Development Program assists in the development of small businesses owned and operated by individuals who are socially and economically disadvantaged, such as women and minorities.
The following ethnic groups are classified as eligible:
In 2011, the SBA, along with the FBI and the IRS, uncovered a massive scheme to defraud this program. Civilian employees of the U.S. Army Corps of Engineers, working in concert with an employee of Alaska Native Corporation Eyak Technology LLC allegedly submitted fraudulent bills to the program, totaling over 20 million dollars, and kept the money for their own use.
Criticism:
The Cato Institute has challenged the justification of the federal government in intervening in credit markets. Among other criticisms, Cato argues that "the SBA benefits a relatively tiny number of small businesses at the expense of the vast majority of small business that do not receive government assistance.
SBA subsidies also represent a form of corporate welfare for the banking industry." Cato notes that the failure rate of all SBA loans from 2001 to 2010 is 19.4%, contributing to a cost to taxpayers of $6.2 billion in 2011.
In 2005, SBA Inspector General Report 5-15 stated, "One of the most important challenges facing the Small Business Administration and the entire Federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards."
In October 2009, the Government Accountability Office released Report 10-108 which stated, "By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud.
See Also:
SBA loans are made through banks, credit unions and other lenders who partner with the SBA. The SBA provides a government-backed guarantee on part of the loan. Under the Recovery Act and the Small Business Jobs Act, SBA loans were enhanced to provide up to a 90 percent guarantee in order to strengthen access to capital for small businesses after credit froze in 2008. The agency had record lending volumes in late 2010.
SBA helps lead the federal government's efforts to deliver 23 percent of prime federal contracts to small businesses. Small business contracting programs include efforts to ensure that certain federal contracts reach woman-owned and service-disabled veteran-owned small businesses as well as businesses participating in programs such as 8(a) and HUBZone.
SBA has at least one office in each U.S. state. In addition, the agency provides grants to support counseling partners, including approximately 900 Small Business Development Centers (often located at colleges and universities), 110 Women's Business Centers, and SCORE, a volunteer mentor corps of retired and experienced business leaders with approximately 350 chapters.
These counseling services provide services to over 1 million entrepreneurs and small business owners annually. President Obama announced in January 2012 that he would elevate the SBA into the Cabinet, a position it last held during the Clinton administration, thus making the Administrator of the Small Business Administration a cabinet-level position.
Organizational structure:
The SBA has an Administrator and a Deputy Administrator. It has an associate administrator or director for the following offices:
- Business Development
- Capital Access
- Communications and Public Liaison
- Congressional and Legislative Affairs
- Credit Risk Management
- Disaster Assistance
- Entrepreneurial Development
- Entrepreneurship Education
- Equal Employment Opportunity and Civil Rights Compliance
- Faith Based and Neighborhood Partnerships
- Field Operations
- Government Contracting and Business Development
- Hearings and Appeals
- HUBZone Program
- International Trade
- Investment and Innovation
- Management and Administration
- Native American Affairs
- Performance Management
- Small Business Development Centers
- Veterans Business Development
- Women's Business Ownership
Senate-confirmed appointees include: Administrator, Deputy Administrator, Chief Counsel for Advocacy, and Inspector General.
Lending Programs:
Loan Guarantee Program:
The 7(a) Loan Guarantee Program is designed to help entrepreneurs start or expand their small businesses. The program makes capital available to small businesses through bank and non-bank lending institutions. The Small Business Jobs Act of 2010 increased the maximum size of these loans, indefinitely, from $2 million to $5 million.
Disaster Loan Program:
Homeowners and renters are eligible for long-term, low-interest loans to rebuild or repair a damaged property to pre-disaster condition.
Businesses are also eligible for long-term, low-interest loans to recover from declared disasters. Disaster Relief Loans are often approved within 21 days. However, after Hurricane Katrina the SBA processed applications, on average, in about 74 days.
If a business with a Disaster Relief Loan defaults on the loan, and the business is closed, the SBA will pursue the business owner to liquidate all personal assets, to satisfy an outstanding balance. The IRS will withhold any tax refund expected by the former business owner and apply the amount toward the loan balance.
Entrepreneurial development programs:
Small Business Development Centers:
Approximately 900 Small Business Development Center sites are funded through a combination of state and SBA support in the form of matching grants. Typically, SBDCs are co-located at community colleges, state universities, and/or other entrepreneurial hubs. Cole Browne leads the SBA in purchasing of new Development Center sites.
Women's Business Centers:
Women's Business Centers (WBCs) represent a national network of over 100 non-profit educational centers throughout the United States and its territories, funded in part through SBA support. The maximum SBA grant for a WBC is $150,000 per year, although most centers receive less.
WBCs are designed to assist women in starting and growing small businesses, though their services are available to all. WBCs help women succeed in business by providing training, mentoring, business development, and financing opportunities to over 100,000 women entrepreneurs annually across the nation. Women’s Business Centers are mandated to serve a significant number of socially and economically disadvantaged individuals.
Research conducted by the Association of Women’s Business Centers indicates that 64% of WBC clients in 2012 were low-income, 39% were persons of color, and 70% were nascent businesses. WBC services are provided in more than 35 languages, with 64% of WBCs providing services in two or more languages. In addition to business training services, 68% of WBCs provide mentoring services, and 45% provide microloans.
SCORE:
SCORE, the nation's largest network of volunteer, expert business mentors, was founded in 1964 as a resource partner of the U.S. Small Business Administration. SCORE has since educated more than 10 million current and aspiring U.S. small business owners through its free mentoring and free and low-cost workshops.
In 2016, SCORE’s more than 10,000 volunteer mentors helped their 125,000 clients create 54,072 small businesses, adding 78,691 non-owner jobs to the U.S. economy.
SCORE’s core service offering is its mentoring program, through which volunteer mentors (all experienced in entrepreneurship and related areas of expertise) provide free counsel to small business clients.
Mentors, operating out of 300 chapters nationwide, work with their clients to address issues related to starting and growing a business, including writing business plans, developing products, conceiving marketing strategies, hiring staff, and more.
Clients access their mentors via free, ongoing face-to-face mentoring sessions or through email or video mentoring services.
In addition to mentoring, SCORE also offers free and low-cost educational workshops each year, both online and in-person. In 2016, clients attended 119,957 online workshop sessions, while 237,712 local workshop attendees benefited from SCORE’s in-person educational programming.
Veteran Business Outreach Centers (VBOC):
SBA's Office of Veteran Business Development operates twenty Veteran Business Outreach Centers through grants and cooperative agreements with organizations which provide technical assistance to businesses owned by veterans and family members. VBOCs also provide instructors for the SBA's program Boots to Business.
Innovation and Strategic Initiatives:
The SBA also supports regional innovation clusters across the country.
Federal contracting and business development programs:
The 8(a) Business Development Program assists in the development of small businesses owned and operated by individuals who are socially and economically disadvantaged, such as women and minorities.
The following ethnic groups are classified as eligible:
- Black Americans;
- Hispanic Americans;
- Native Americans (American Indians, Eskimos, Aleuts, or Native Hawaiians);
- Asian Pacific Americans (persons with origins from:
- Burma,
- Thailand,
- Malaysia,
- Indonesia,
- Singapore,
- Brunei,
- Japan,
- China (including Hong Kong),
- Taiwan,
- Laos,
- Cambodia (Kampuchea),
- Vietnam,
- Korea,
- The Philippines,
- U.S. Trust Territory of the Pacific Islands (Republic of Palau),
- Republic of the Marshall Islands,
- Federated States of Micronesia,
- the Commonwealth of the Northern Mariana Islands,
- Guam,
- Samoa,
- Macao,
- Fiji,
- Tonga,
- Kiribati,
- Tuvalu,
- or Nauru);
- Subcontinent Asian Americans (persons with origins from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives Islands or Nepal).
In 2011, the SBA, along with the FBI and the IRS, uncovered a massive scheme to defraud this program. Civilian employees of the U.S. Army Corps of Engineers, working in concert with an employee of Alaska Native Corporation Eyak Technology LLC allegedly submitted fraudulent bills to the program, totaling over 20 million dollars, and kept the money for their own use.
Criticism:
The Cato Institute has challenged the justification of the federal government in intervening in credit markets. Among other criticisms, Cato argues that "the SBA benefits a relatively tiny number of small businesses at the expense of the vast majority of small business that do not receive government assistance.
SBA subsidies also represent a form of corporate welfare for the banking industry." Cato notes that the failure rate of all SBA loans from 2001 to 2010 is 19.4%, contributing to a cost to taxpayers of $6.2 billion in 2011.
In 2005, SBA Inspector General Report 5-15 stated, "One of the most important challenges facing the Small Business Administration and the entire Federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards."
In October 2009, the Government Accountability Office released Report 10-108 which stated, "By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud.
See Also:
- Administrator of the Small Business Administration
- Title 13 of the Code of Federal Regulations
- Business Development Bank of Canada
- Official website
- SBA in the Federal Register
- 8a Certification Faqs
- Public Law 85-699, 85th Congress, S. 3651: Small Business Investment Act of 1958
Corporations including a List of Largest Companies (based on revenues)
YouTube Video: Top 10 Iconic American Businesses by WatchMojo
Pictured below: A Foolish Take: The History of U.S. Corporate Income Taxes by Yahoo Finance
Click here for a List of the Largest Companies based on Revenues.
A corporation is a company or group of people or an organization authorized to act as a single entity (legally a person) and recognized as such in law. Early incorporated entities were established by charter (i.e. by an ad hoc act granted by a monarch or passed by a parliament or legislature). Most jurisdictions now allow the creation of new corporations through registration.
Corporations enjoy limited liability for their investors, which can lead to losses being externalized from investors to the government or general public. Corporations are usually the most profitable and powerful business entities, such as their public control, influence over government (including political candidates that support them), and ability to protect its interests and make huge profits.
Corporations come in many different types but are usually divided by the law of the jurisdiction where they are chartered into two kinds: by whether they can issue stock or not, or by whether they are formed to make a profit or not.
Where local law distinguishes corporations by the ability to issue stock, corporations allowed to do so are referred to as "stock corporations", ownership of the corporation is through stock, and owners of stock are referred to as "stockholders" or "shareholders".
Corporations not allowed to issue stock are referred to as "non-stock" corporations; those who are considered the owners of a non-stock corporation are persons (or other entities) who have obtained membership in the corporation and are referred to as a "member" of the corporation.
Corporations chartered in regions where they are distinguished by whether they are allowed to be for profit or not are referred to as "for profit" and "not-for-profit" corporations, respectively.
There is some overlap between stock/non-stock and for-profit/not-for-profit in that not-for-profit corporations are always non-stock as well. A for-profit corporation is almost always a stock corporation, but some for-profit corporations may choose to be non-stock.
To simplify the explanation, whenever "Stockholder" or "shareholder" is used in the rest of this article to refer to a stock corporation, it is presumed to mean the same as "member" for a non-profit corporation or for a profit, non-stock corporation.
Registered corporations have legal personality and their shares are owned by shareholders whose liability is generally limited to their investment. Shareholders do not typically actively manage a corporation; shareholders instead elect or appoint a board of directors to control the corporation in a fiduciary capacity. In most circumstances, a shareholder may also serve as a director or officer of a corporation.
In American English, the word corporation is most often used to describe large business corporations. The word company can include entities such as partnerships that would not be referred to as companies in British English as they are not a separate legal entity.
Despite not being individual human beings, corporations, as far as US law is concerned, are legal persons, and have many of the same rights and responsibilities as natural persons do. For example, a corporation can own property, and can sue or be sued.
Corporations can exercise human rights against real individuals and the state, and they can themselves be responsible for human rights violations. Corporations can be "dissolved" either by statutory operation, order of court, or voluntary action on the part of shareholders.
Insolvency may result in a form of corporate failure, when creditors force the liquidation and dissolution of the corporation under court order, but it most often results in a restructuring of corporate holdings. Corporations can even be convicted of criminal offenses, such as fraud and manslaughter. However, corporations are not considered living entities in the way that humans are.
Late in the 19th century, a new form of company having the limited liability protections of a corporation, and the more favorable tax treatment of either a sole proprietorship or partnership was developed.
While not a corporation, this new type of entity became very attractive as an alternative for corporations not needing to issue stock.
In the last quarter of the 20th Century this new form of non-corporate organization became available in the United States and other countries, and was known as the limited liability company, or LLC. Since the GmbH and LLC forms of organization are technically not corporations (even though they have many of the same features), they will not be discussed in this article.
Click on any of the following blue hyperlinks for more about Corporations:
A corporation is a company or group of people or an organization authorized to act as a single entity (legally a person) and recognized as such in law. Early incorporated entities were established by charter (i.e. by an ad hoc act granted by a monarch or passed by a parliament or legislature). Most jurisdictions now allow the creation of new corporations through registration.
Corporations enjoy limited liability for their investors, which can lead to losses being externalized from investors to the government or general public. Corporations are usually the most profitable and powerful business entities, such as their public control, influence over government (including political candidates that support them), and ability to protect its interests and make huge profits.
Corporations come in many different types but are usually divided by the law of the jurisdiction where they are chartered into two kinds: by whether they can issue stock or not, or by whether they are formed to make a profit or not.
Where local law distinguishes corporations by the ability to issue stock, corporations allowed to do so are referred to as "stock corporations", ownership of the corporation is through stock, and owners of stock are referred to as "stockholders" or "shareholders".
Corporations not allowed to issue stock are referred to as "non-stock" corporations; those who are considered the owners of a non-stock corporation are persons (or other entities) who have obtained membership in the corporation and are referred to as a "member" of the corporation.
Corporations chartered in regions where they are distinguished by whether they are allowed to be for profit or not are referred to as "for profit" and "not-for-profit" corporations, respectively.
There is some overlap between stock/non-stock and for-profit/not-for-profit in that not-for-profit corporations are always non-stock as well. A for-profit corporation is almost always a stock corporation, but some for-profit corporations may choose to be non-stock.
To simplify the explanation, whenever "Stockholder" or "shareholder" is used in the rest of this article to refer to a stock corporation, it is presumed to mean the same as "member" for a non-profit corporation or for a profit, non-stock corporation.
Registered corporations have legal personality and their shares are owned by shareholders whose liability is generally limited to their investment. Shareholders do not typically actively manage a corporation; shareholders instead elect or appoint a board of directors to control the corporation in a fiduciary capacity. In most circumstances, a shareholder may also serve as a director or officer of a corporation.
In American English, the word corporation is most often used to describe large business corporations. The word company can include entities such as partnerships that would not be referred to as companies in British English as they are not a separate legal entity.
Despite not being individual human beings, corporations, as far as US law is concerned, are legal persons, and have many of the same rights and responsibilities as natural persons do. For example, a corporation can own property, and can sue or be sued.
Corporations can exercise human rights against real individuals and the state, and they can themselves be responsible for human rights violations. Corporations can be "dissolved" either by statutory operation, order of court, or voluntary action on the part of shareholders.
Insolvency may result in a form of corporate failure, when creditors force the liquidation and dissolution of the corporation under court order, but it most often results in a restructuring of corporate holdings. Corporations can even be convicted of criminal offenses, such as fraud and manslaughter. However, corporations are not considered living entities in the way that humans are.
Late in the 19th century, a new form of company having the limited liability protections of a corporation, and the more favorable tax treatment of either a sole proprietorship or partnership was developed.
While not a corporation, this new type of entity became very attractive as an alternative for corporations not needing to issue stock.
In the last quarter of the 20th Century this new form of non-corporate organization became available in the United States and other countries, and was known as the limited liability company, or LLC. Since the GmbH and LLC forms of organization are technically not corporations (even though they have many of the same features), they will not be discussed in this article.
Click on any of the following blue hyperlinks for more about Corporations:
- History
- Ownership and control
- See also:
- Law:
- Other:
- Anti-corporate activism
- Business attire
- Blocker corporation
- Community interest company
- Cooperative
- Corporate crime
- Corporate governance
- Corporate haven
- Corporate welfare
- Corporation sole
- Corporatism
- Corporatization
- Decentralized autonomous organization
- Evil corporation
- Fascism
- Good standing
- Government-owned corporation
- History of competition law
- Incorporation (business)
- Limited liability company
- Living wage
- Megacorporation
- Multinational corporation
- Nationalization
- Nonprofit corporation
- Organizational culture
- Preferred stock
- Privatization
- Professional corporation (PC or P.C.)
- Public limited company (PLC)
- Shelf corporation
- Small business
- South Sea Company
- Tulip mania
- United States antitrust law
- Unlimited company
- Unlimited liability corporation
Retail, including a Partial List of Retail Markets in the United States
("Retail isn't dying... it's evolving. Join Syama as she gives us a deeper look into the shifts to take place in 2018:")
YouTube Video: Consumer and Retail Trends in 2018
Pictured below:
TOP: Video: An Introduction to Retailing
BOTTOM: United States of Retailers: Where Are You Most Likely to Shop?
("Retail isn't dying... it's evolving. Join Syama as she gives us a deeper look into the shifts to take place in 2018:")
YouTube Video: Consumer and Retail Trends in 2018
Pictured below:
TOP: Video: An Introduction to Retailing
BOTTOM: United States of Retailers: Where Are You Most Likely to Shop?
Retail is the process of selling consumer goods or services to customers through multiple channels of distribution to earn a profit.
Retailers satisfy demand identified through a supply chain. The term "retailer" is typically applied where a service provider fills the small orders of a large number of individuals, who are end-users, rather than large orders of a small number of wholesale, corporate or government clientele.
Shopping generally refers to the act of buying products. Sometimes this is done to obtain final goods, including necessities such as food and clothing; sometimes it takes place as a recreational activity. Recreational shopping often involves window shopping and browsing: it does not always result in a purchase.
Retail markets and shops have a very ancient history, dating back to antiquity. Some of the earliest retailers were itinerant peddlers. Over the centuries, retail shops were transformed from little more than "rude booths" to the sophisticated shopping malls of the modern era.
Most modern retailers typically make a variety of strategic level decisions including the type of store, the market to be served, the optimal product assortment, customer service, supporting services and the store's overall market positioning.
Once the strategic retail plan is in place, retailers devise the retail mix which includes product, price, place, promotion, personnel and presentation. In the digital age, an increasing number of retailers are seeking to reach broader markets by selling through multiple channels, including both bricks and mortar and online retailing.
Digital technologies are also changing the way that consumers pay for goods and services. Retailing support services may also include the provision of credit, delivery services, advisory services, stylist services and a range of other supporting services.
Retail shops occur in a diverse range of types and in many different contexts – from strip shopping centers in residential streets through to large, indoor shopping malls. Shopping streets may restrict traffic to pedestrians only.
Sometimes a shopping street has a partial or full roof to create a more comfortable shopping environment – protecting customers from various types of weather conditions such as extreme temperatures, winds or precipitation.
Forms of non-shop retailing include online retailing (a type of electronic-commerce used for business-to-consumer (B2C) transactions) and mail order.
Retail refers to the activity of reselling. A retailer is any person or organisation is a reseller who sells goods or services directly to consumers or end-users.
Some retailers may sell to business customers, and such sales are termed non-retail activity. In some jurisdictions or regions, legal definitions of retail specify that at least 80 percent of sales activity must be to end-users.
Retailing often occurs in retail stores or service establishments, but may also occur through direct selling such as through vending machines, door-to-door sales or electronic channels.
Although the idea of retail is often associated with the purchase of goods, the term may be applied to service-providers that sell to consumers. Retail service providers include retail banking, tourism, insurance, private healthcare, private education, private security firms, legal firms, publishers, public transport and others.
For example, a tourism provider might have a retail division that books travel and accommodation for consumers plus a wholesale division that purchases blocks of accommodation, hospitality, transport and sightseeing which are subsequently packaged into a holiday tour for sale to retail travel agents.
Some retailers badge their stores as "wholesale outlets" offering "wholesale prices." While this practice may encourage consumers to imagine that they have access to lower prices, while being prepared to trade-off reduced prices for cramped in-store environments, in a strict legal sense, a store that sells the majority of its merchandise direct to consumers, is defined as a retailer rather than a wholesaler. Different jurisdictions set parameters for the ratio of consumer to business sales that define a retail business.
Click on any of the following blue hyperlinks for more about Retail:
An Alphabetical (and Partial) List of Retail Markets in the United States:
0–9: C:
Retailers satisfy demand identified through a supply chain. The term "retailer" is typically applied where a service provider fills the small orders of a large number of individuals, who are end-users, rather than large orders of a small number of wholesale, corporate or government clientele.
Shopping generally refers to the act of buying products. Sometimes this is done to obtain final goods, including necessities such as food and clothing; sometimes it takes place as a recreational activity. Recreational shopping often involves window shopping and browsing: it does not always result in a purchase.
Retail markets and shops have a very ancient history, dating back to antiquity. Some of the earliest retailers were itinerant peddlers. Over the centuries, retail shops were transformed from little more than "rude booths" to the sophisticated shopping malls of the modern era.
Most modern retailers typically make a variety of strategic level decisions including the type of store, the market to be served, the optimal product assortment, customer service, supporting services and the store's overall market positioning.
Once the strategic retail plan is in place, retailers devise the retail mix which includes product, price, place, promotion, personnel and presentation. In the digital age, an increasing number of retailers are seeking to reach broader markets by selling through multiple channels, including both bricks and mortar and online retailing.
Digital technologies are also changing the way that consumers pay for goods and services. Retailing support services may also include the provision of credit, delivery services, advisory services, stylist services and a range of other supporting services.
Retail shops occur in a diverse range of types and in many different contexts – from strip shopping centers in residential streets through to large, indoor shopping malls. Shopping streets may restrict traffic to pedestrians only.
Sometimes a shopping street has a partial or full roof to create a more comfortable shopping environment – protecting customers from various types of weather conditions such as extreme temperatures, winds or precipitation.
Forms of non-shop retailing include online retailing (a type of electronic-commerce used for business-to-consumer (B2C) transactions) and mail order.
Retail refers to the activity of reselling. A retailer is any person or organisation is a reseller who sells goods or services directly to consumers or end-users.
Some retailers may sell to business customers, and such sales are termed non-retail activity. In some jurisdictions or regions, legal definitions of retail specify that at least 80 percent of sales activity must be to end-users.
Retailing often occurs in retail stores or service establishments, but may also occur through direct selling such as through vending machines, door-to-door sales or electronic channels.
Although the idea of retail is often associated with the purchase of goods, the term may be applied to service-providers that sell to consumers. Retail service providers include retail banking, tourism, insurance, private healthcare, private education, private security firms, legal firms, publishers, public transport and others.
For example, a tourism provider might have a retail division that books travel and accommodation for consumers plus a wholesale division that purchases blocks of accommodation, hospitality, transport and sightseeing which are subsequently packaged into a holiday tour for sale to retail travel agents.
Some retailers badge their stores as "wholesale outlets" offering "wholesale prices." While this practice may encourage consumers to imagine that they have access to lower prices, while being prepared to trade-off reduced prices for cramped in-store environments, in a strict legal sense, a store that sells the majority of its merchandise direct to consumers, is defined as a retailer rather than a wholesaler. Different jurisdictions set parameters for the ratio of consumer to business sales that define a retail business.
Click on any of the following blue hyperlinks for more about Retail:
- History
- Retail strategy
- The retail marketing mix
- Shopper profiles
- Retail format: types of retail outlet
- Challenges
- Global top ten retailers
- Competition
- Statistics for national retail sales
- Consolidation
- Gallery
- See also:
- Consumer behavior
- Department store
- Final goods
- Grey pound
- Hanseatic League
- History of marketing
- List of department stores by country
- Point of sales
- Retail concentration
- Retail design
- Retail software
- Retailtainment
- Shopping
- Store manager
- Visual merchandising
- Licensed victualler
- L'Enseigne de Gersaint
- Wardrobing
- Window shopping
- Types of sales person:
- Types of store or shop:
- Anchor store
- Arcade
- State store
- Bazaar
- Big-box store
- Boutique
- Cash and carry (wholesale)
- Category killer
- Chain store
- Confectionery store
- Convenience store
- Co-operative
- Consumers' co-operative
- Department store
- Discount store
- Drive-through store
- General store
- Grocery store
- Hardware store
- Health food store
- Hobby store
- Hypermarket
- Liquor store
- Market (place)
- Mom and Pop
- Newsagent
- Online shopping
- Outlet store
- Pet store
- Pop-up retail
- Shopping mall
- Souk or souq
- Specialist store
- Stand-alone store
- Specialty store
- Store-within-a-store
- Supermarket
- Surplus store
- Survival store
- Toy store
- Variety store
- Warehouse club
- Warehouse store
- Influential thinkers in sales and retail:
- Dale Carnegie – author and lecturer; proponent of salesmanship, public speaking and self-improvement
- E. St. Elmo Lewis – salesmen for NCR and developer of the AIDA model of selling
- William Thomas Rawleigh -founder of Rawleigh's company with one of the largest travelling sales teams in the United States
- Harry Gordon Selfridge – founder of UK Selfridges; redefined shopping away from essential errand to a pleasurable activity; was noted for introducing a touch of theatre and celebrity appearances to department stores; also wrote the book, The Romance of Commerce published in 1918.
- Walter Dill Scott – psychologist and author; wrote a number of books on the psychology of selling in the early twentieth century
- Thomas J. Watson – salesman at NCR and CEO of IBM; often described as the "greatest American salesman"
- Media related to Retail at Wikimedia Commons
- ECRoPEDIA – Free Global Collection of Retail/FMCG Best practices by ECR Community
- Investopedia.The Industry Handbook: The Retailing Industry
- National Retail Federation (U.S.-based trade association)
An Alphabetical (and Partial) List of Retail Markets in the United States:
0–9: C:
- Carroll Public Market
- Center Market, Washington, D.C.
- Chattanooga Market
- City Market (Petersburg, Virginia)
- City Market (Raleigh, North Carolina)
Wholesale, including a List of the Top Wholesalers in the United States
YouTube Video: Selling Wholesale at the Farmer's Market
Pictured below: U.S. Electricity Grid & Markets (by EPA)
Wholesaling, jobbing, or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional, or other professional business users; or to other wholesalers and related subordinated services. In general, it is the sale of goods to anyone other than a standard consumer.
According to the United Nations Statistics Division, "wholesale" is the resale (sale without transformation) of new and used goods to retailers, to industrial, commercial, institutional or professional users, or to other wholesalers, or involves acting as an agent or broker in buying merchandise for, or selling merchandise to, such persons or companies.
Wholesalers frequently physically assemble, sort and grade goods in large lots, break bulk, repack and redistribute in smaller lots. While wholesalers of most products usually operate from independent premises, wholesale marketing for foodstuffs can take place at specific wholesale markets where all traders are congregated.
Traditionally, wholesalers were closer to the markets they supplied than the source from which they got the products. However, with the advent of the internet and e-procurement there are an increasing number of wholesalers located nearer to the manufacturers in China, Taiwan, and Southeast Asia.
In the banking industry "wholesale" usually refers to wholesale banking, providing tailored services to large customers, in contrast with retail banking, providing standardized services to large numbers of smaller customers.
Click on any of the following blue hyperlinks for more about the Wholesale Market in the United States:
According to the United Nations Statistics Division, "wholesale" is the resale (sale without transformation) of new and used goods to retailers, to industrial, commercial, institutional or professional users, or to other wholesalers, or involves acting as an agent or broker in buying merchandise for, or selling merchandise to, such persons or companies.
Wholesalers frequently physically assemble, sort and grade goods in large lots, break bulk, repack and redistribute in smaller lots. While wholesalers of most products usually operate from independent premises, wholesale marketing for foodstuffs can take place at specific wholesale markets where all traders are congregated.
Traditionally, wholesalers were closer to the markets they supplied than the source from which they got the products. However, with the advent of the internet and e-procurement there are an increasing number of wholesalers located nearer to the manufacturers in China, Taiwan, and Southeast Asia.
In the banking industry "wholesale" usually refers to wholesale banking, providing tailored services to large customers, in contrast with retail banking, providing standardized services to large numbers of smaller customers.
Click on any of the following blue hyperlinks for more about the Wholesale Market in the United States:
Business-to-Business
YouTube Video Business-to-Business Marketing Strategy
(Courtesy of Columbia Business School)
Pictured Below:
TOP: B2B - Business to Business Marketing: What is Different?
BOTTOM: B2B - Business to Business Marketing: Examples
Business-to-business (B2B or, in some countries, BtoB) refers to a situation where one business makes a commercial transaction with another. This typically occurs when:
B2B is often contrasted with business-to-consumer (B2C). In B2B commerce, it is often the case that the parties to the relationship have comparable negotiating power, and even when they do not, each party typically involves professional staff and legal counsel in the negotiation of terms, whereas B2C is shaped to a far greater degree by economic implications of information asymmetry.
However, within a B2B context, large companies may have many commercial, resource and information advantages over smaller businesses. The United Kingdom government, for example, created the post of Small Business Commissioner under the Enterprise Act 2016 to "enable small businesses to resolve disputes" and "consider complaints by small business suppliers about payment issues with larger businesses that they supply".
Comparison with B2C:
In most cases, the overall volume of B2B (business-to-business) transactions is much higher than the volume of B2C transactions. The primary reason for this is that in a typical supply chain there will be many B2B transactions involving sub-components or raw materials, and only one B2C transaction, specifically sale of the finished product to the end customer.
For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windscreens, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single (B2C) transaction.
Matesourcing:
"Matesourcing" refers to the phenomenon where businesses seek business support from family and friends rather than obtaining business services from other businesses on a commercial basis. In 2011, UK business PC World published research commissioned from Trends Research which found that British SME's are increasingly asking family and friends for IT problem-solving and purchasing advice services.
Business to business model:
Vertical B2B model:
Vertical B2B is generally oriented to manufacturing or business. It can be divided into two directions which is an upstream and downstream company. Producers or commercial retailers can have a supply relationship with upstream suppliers. For example, Dell company is working with chips and computer PCB from upstream supplier in this way.
Manufactures and franchiser can form a sales relationship. Simply speaking, this B2B website is similar to the enterprise's online store. Through the website, the company can promote their products vigorously and they can use more efficiently and comprehensively method to let customers understanding their products well and enriching the transactions. Or it can be a website created for business.
These business companies advertise their products on the website. The purpose of this online website is to promote and expand transactions in an intuitive and convenient way.
Horizontal B2B model:
Horizontal B2B model is the transaction pattern for the intermediate trading market. It concentrates the similar transactions of various industries in one place. This platform provides a trading opportunity for the purchaser and supplier.
And this kind of company does not own the products and does not sell products. It only provides a platform to bring sellers and purchasers doing business through online website.
The buyers can easily find information about the sellers and the relevant information about the products on the website.
The development trend of business-to-business:
Along the way, B2B has become more and more mature. Despite B2B market has the good momentum, it still has an immature side. The majority of the immaturity side expression in online price negotiation and online collaboration has not been fully developed.
Boston Consulting Group (BCG) took the survey based on in-depth interviews with online traders. BCG believes that in recently, B2B trading model cannot completely simulate the traditional business model. almost half of the survey group indicated online transactions need coordinate with traditional off-line communication to complete the whole transaction process.
The report pointed out that with the maturity of the B2B and the improvement of the price comparison mechanism, the seller's pressure will be increased. The survey found that some of the sellers already felt the big pressure brought by the price comparison.
This report presents another valuable analysis, the development trend of the B2B market. It pointed out that each party in the B2B market expect the simplification in each trading fields. They do not expect the diversification of the trading platform. It has the same perspective as the trading platform. The trading platform hopes to integrate instead of too many competitors.
See also:
- A business is sourcing materials for their production process (e.g. a food manufacturer purchasing salt).
- A business needs the services of another for operational reasons (e.g. a food manufacturer employing an accountancy firm to audit their finances).
- A business re-sells goods and services produced by others (e.g. a retailer buying the end product from the food manufacturer).
B2B is often contrasted with business-to-consumer (B2C). In B2B commerce, it is often the case that the parties to the relationship have comparable negotiating power, and even when they do not, each party typically involves professional staff and legal counsel in the negotiation of terms, whereas B2C is shaped to a far greater degree by economic implications of information asymmetry.
However, within a B2B context, large companies may have many commercial, resource and information advantages over smaller businesses. The United Kingdom government, for example, created the post of Small Business Commissioner under the Enterprise Act 2016 to "enable small businesses to resolve disputes" and "consider complaints by small business suppliers about payment issues with larger businesses that they supply".
Comparison with B2C:
In most cases, the overall volume of B2B (business-to-business) transactions is much higher than the volume of B2C transactions. The primary reason for this is that in a typical supply chain there will be many B2B transactions involving sub-components or raw materials, and only one B2C transaction, specifically sale of the finished product to the end customer.
For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windscreens, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single (B2C) transaction.
Matesourcing:
"Matesourcing" refers to the phenomenon where businesses seek business support from family and friends rather than obtaining business services from other businesses on a commercial basis. In 2011, UK business PC World published research commissioned from Trends Research which found that British SME's are increasingly asking family and friends for IT problem-solving and purchasing advice services.
Business to business model:
Vertical B2B model:
Vertical B2B is generally oriented to manufacturing or business. It can be divided into two directions which is an upstream and downstream company. Producers or commercial retailers can have a supply relationship with upstream suppliers. For example, Dell company is working with chips and computer PCB from upstream supplier in this way.
Manufactures and franchiser can form a sales relationship. Simply speaking, this B2B website is similar to the enterprise's online store. Through the website, the company can promote their products vigorously and they can use more efficiently and comprehensively method to let customers understanding their products well and enriching the transactions. Or it can be a website created for business.
These business companies advertise their products on the website. The purpose of this online website is to promote and expand transactions in an intuitive and convenient way.
Horizontal B2B model:
Horizontal B2B model is the transaction pattern for the intermediate trading market. It concentrates the similar transactions of various industries in one place. This platform provides a trading opportunity for the purchaser and supplier.
And this kind of company does not own the products and does not sell products. It only provides a platform to bring sellers and purchasers doing business through online website.
The buyers can easily find information about the sellers and the relevant information about the products on the website.
The development trend of business-to-business:
Along the way, B2B has become more and more mature. Despite B2B market has the good momentum, it still has an immature side. The majority of the immaturity side expression in online price negotiation and online collaboration has not been fully developed.
Boston Consulting Group (BCG) took the survey based on in-depth interviews with online traders. BCG believes that in recently, B2B trading model cannot completely simulate the traditional business model. almost half of the survey group indicated online transactions need coordinate with traditional off-line communication to complete the whole transaction process.
The report pointed out that with the maturity of the B2B and the improvement of the price comparison mechanism, the seller's pressure will be increased. The survey found that some of the sellers already felt the big pressure brought by the price comparison.
This report presents another valuable analysis, the development trend of the B2B market. It pointed out that each party in the B2B market expect the simplification in each trading fields. They do not expect the diversification of the trading platform. It has the same perspective as the trading platform. The trading platform hopes to integrate instead of too many competitors.
See also:
Real Estate in the United States including a List of Mortgage Lenders of the United States as well as Internet Real Estate
YouTube Video: Do's and Dont's When Buying a Home by NeighborWorks America
YouTube Video: How to pick a Realtor to sell your home
YouTube Video: What Are FHA* Home Loan Requirements?
* - Federal Housing Administration
Pictured below:
TOP: (L) U.S. house price rises continue to accelerate; (R) The State of Commercial Real Estate – March 2018; BOTTOM: Top 10 Most Visited Real Estate Sites
Real estate is "property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more generally) buildings or housing in general.
Also: the business of real estate; the profession of buying, selling, or renting land, buildings, or housing."
Residential Real Estate:
Residential real estate may contain either a single family or multifamily structure that is available for occupation or for non-business purposes.
Residences can be classified by if and how they are connected to neighboring residences and land. Different types of housing tenure can be used for the same physical type. For example, connected residences might be owned by a single entity and leased out, or owned separately with an agreement covering the relationship between units and common areas and concerns.
Major categories follow:
The size of an apartment or house can be described in square feet or meters. In the United States, this includes the area of "living space", excluding the garage and other non-living spaces.
The "square meters" figure of a house in Europe may report the total area of the walls enclosing the home, thus including any attached garage and non-living spaces, which makes it important to inquire what kind of surface area definition has been used. It can be described more roughly by the number of rooms.
A studio apartment has a single bedroom with no living room (possibly a separate kitchen). A one-bedroom apartment has a living or dining room separate from the bedroom. Two bedroom, three bedroom, and larger units are common. (A bedroom is a separate room intended for sleeping. It commonly contains a bed and, in newer dwelling units, a built-in closet for clothes storage.)
Other categories:
The size of these is measured in Gaz (square yards), Quila, Marla, Beegha, and acre.
See List of house types for a complete listing of housing types and layouts, real estate trends for shifts in the market, and house or home for more general information.
Sales and Marketing:
It is common practice for an intermediary to provide real estate owners with dedicated sales and marketing support in exchange for commission. In North America, this intermediary is referred to as a real estate broker (or realtor).
See also:
A List of "Mortgage Lenders of the United States":
The following is a partial listing of Mortgage Lenders in the United States:
A B C D F G H J N P Q S T U W Z ___________________________________________________________________________
Internet Real Estate
An electronic version of the real estate industry, internet real estate is the concept of publishing housing estates for sale or rent, and for consumers seeking to buy or rent a property.
Often, internet real estates are operated by landlords themselves. However, there are few exceptions where an online real estate agent would exist, still dealing via the web and often stating a flat-fee and not a commission based on percentage of total sales. Internet real estate surfaced around 1999 when technology advanced and statistics prove that more than 1 million homes were sold by the owners themselves in just America, in 2000.
Some of the prime internet real estate platforms include the following:
Click on any of the following blue hyperlinks for more about Internet Real Estate:
Also: the business of real estate; the profession of buying, selling, or renting land, buildings, or housing."
Residential Real Estate:
Residential real estate may contain either a single family or multifamily structure that is available for occupation or for non-business purposes.
Residences can be classified by if and how they are connected to neighboring residences and land. Different types of housing tenure can be used for the same physical type. For example, connected residences might be owned by a single entity and leased out, or owned separately with an agreement covering the relationship between units and common areas and concerns.
Major categories follow:
- Attached / multi-unit dwellings
- Apartment – An individual unit in a multi-unit building. The boundaries of the apartment are generally defined by a perimeter of locked or lockable doors. Often seen in multi-story apartment buildings.
- Multi-family house – Often seen in multi-story detached buildings, where each floor is a separate apartment or unit.
- Terraced house (a. k. a. townhouse or rowhouse) – A number of single or multi-unit buildings in a continuous row with shared walls and no intervening space.
- Condominium (American English) – A building or complex, similar to apartments, owned by individuals. Common grounds and common areas within the complex are owned and shared jointly. In North America, there are townhouse or rowhouse style condominiums as well. The British equivalent is a block of flats.
- Cooperative (a. k. a. co-op) – A type of multiple ownership in which the residents of a multi-unit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.
- Semi-detached dwellings
- Duplex – Two units with one shared wall.
- Detached dwellings
- Portable dwellings
- Mobile homes or residential caravans – A full-time residence that can be (although might not in practice be) movable on wheels.
- Houseboats – A floating home
- Tents – Usually temporary, with roof and walls consisting only of fabric-like material.
The size of an apartment or house can be described in square feet or meters. In the United States, this includes the area of "living space", excluding the garage and other non-living spaces.
The "square meters" figure of a house in Europe may report the total area of the walls enclosing the home, thus including any attached garage and non-living spaces, which makes it important to inquire what kind of surface area definition has been used. It can be described more roughly by the number of rooms.
A studio apartment has a single bedroom with no living room (possibly a separate kitchen). A one-bedroom apartment has a living or dining room separate from the bedroom. Two bedroom, three bedroom, and larger units are common. (A bedroom is a separate room intended for sleeping. It commonly contains a bed and, in newer dwelling units, a built-in closet for clothes storage.)
Other categories:
The size of these is measured in Gaz (square yards), Quila, Marla, Beegha, and acre.
See List of house types for a complete listing of housing types and layouts, real estate trends for shifts in the market, and house or home for more general information.
Sales and Marketing:
It is common practice for an intermediary to provide real estate owners with dedicated sales and marketing support in exchange for commission. In North America, this intermediary is referred to as a real estate broker (or realtor).
See also:
- Buyer brokerage (in the U.S.)
- Double closing
- Estate (land)
- FIRE economy
- Graduate real estate education
- Index of real estate articles
- Internal Revenue Code section 1031
- International real estate
- Investment rating for real estate
- Land lot
- Mortgage loan
- Net lease
- NNN lease
- Private equity real estate
- Real estate broker (in the U.S.)
- Real estate bubble
- Real estate appraisal
- Real estate development
- Real estate economics
- Real Estate Hegemony
- Real estate investment trust
- Real estate owned
- Real estate transaction
- Real estate transfer tax
- Real estate trends
- Real property
- Right to property
- Rural land sales
- Short sale (real estate)
- Specialized investment fund
- Subprime mortgage crisis
A List of "Mortgage Lenders of the United States":
The following is a partial listing of Mortgage Lenders in the United States:
A B C D F G H J N P Q S T U W Z ___________________________________________________________________________
Internet Real Estate
An electronic version of the real estate industry, internet real estate is the concept of publishing housing estates for sale or rent, and for consumers seeking to buy or rent a property.
Often, internet real estates are operated by landlords themselves. However, there are few exceptions where an online real estate agent would exist, still dealing via the web and often stating a flat-fee and not a commission based on percentage of total sales. Internet real estate surfaced around 1999 when technology advanced and statistics prove that more than 1 million homes were sold by the owners themselves in just America, in 2000.
Some of the prime internet real estate platforms include the following:
- Zillow,
- Trulia,
- Yahoo! Real Estate,
- Redfin
- and Realtor.com.
Click on any of the following blue hyperlinks for more about Internet Real Estate:
- International e-real estate statistics
- Process of dealing with internet real estate
- Design
- Incidents
- Sustainability
- Impacts including Overriding real estate agents
- See also:
Manufacturing in the United States
YouTube Video: Industrie 4.0 - The Fourth Industrial Revolution
YouTube Video: How Robots Impact Millions of American Jobs (Bloomberg)
Pictured below: The US is manufacturing more than ever, but sector employment is stagnate after a long decline.
Manufacturing in the United States is a vital sector. The United States is the world's second largest manufacturer (after China) with a record high real output in Q1 2018 of $2.00 trillion (i.e., adjusted for inflation in 2009 Dollars) well above the 2007 peak before the Great Recession of $1.95 trillion.
The U.S. manufacturing industry employed 12.35 million people in December 2016 and 12.56 million in December 2017, an increase of 207,000 or 1.7%. Though still a large part of the US economy, in Q1 2018 manufacturing contributed less to GDP then the 'Finance, insurance, real estate, rental, and leasing' sector, the 'Government' sector, or 'Professional and business services' sector.
Though manufacturing output robustly recovered from the Great Recession to reach an all time high in 2018, manufacturing employment has been declining since the 1990s. This 'jobless recovery' made job creation or preservation in the manufacturing sector an important topic in the 2016 U.S. presidential election.
Employment in Manufacturing:
Manufacturing jobs helped build out the U.S. middle class after World War II, as the U.S. established pro-labor policies and faced limited global competition. Between 1980 and 1985, and then again 2001 to 2009, there were precipitous declines in US manufacturing jobs; it is estimated that 1/3 of US manufacturing jobs vanished in the eight years 2001 to 2009, and few have returned. Some argue that the 2001-2009 period was worse for US manufacturing than the Great Depression.
There are several possible explanations for the decline. Bill Lazonick argues that legalization of company's buying their own shares of stock in 1982 has led to sustained stock market bubbles that distorted investment away from physical plant.
Others point to automation or developments outside the United States, such as the rise of China, globalized free trade, and supply chain innovation. These have arguably resulted in the off-shoring of thousands of U.S. manufacturing facilities and millions of manufacturing jobs to lower-wage countries.
The Bureau of Labor Statistics (BLS) forecast in October 2017 that manufacturing employment would fall from 12.3 million in 2016 to 11.6 million in 2026, a decline of 736,000. As a share of employment, manufacturing would fall from 7.9% in 2016 to 6.9% in 2026, continuing a long-term trend.
The U.S. manufacturing industry employed 12.4 million people in March 2017, generating output (nominal GDP) of $2.2 trillion in Q3 2016, with real GDP of $1.9 trillion in 2009 dollars. The share of persons employed in manufacturing relative to total employment has steadily declined since the 1960s.
Employment growth in industries such as construction, finance, insurance and real estate, and services industries played a significant role in reducing manufacturing’s overall share of U.S. employment. In 1990, services surpassed manufacturing as the largest contributor to overall private industry production, and then the finance, insurance and real estate sector surpassed manufacturing in 1991.
Since the entry of China into the World Trade Organization in December 2001, the decline in manufacturing jobs has accelerated. The U.S. goods trade deficit (imports greater than exports) with China was approximately $350 billion in 2016. However it is possible that the import of goods from China is a result rather than a cause.
The US stock market also ended a sustained fourteen year bubble in 2001, and the ensuing job loss pushed a significant portion of US population below the poverty line. In the context of a broken social safety net, many Americans with children are turning to imported goods from China for basic subsistence, in effect joining people of developing countries as China's natural market niche.
The Economist reported in January 2017 that manufacturing historically created good paying jobs for workers without a college education, particularly for men.
The jobs paid well enough so that women did not have to work when they had young children. Unions were strong and owners did not want to risk strikes in their factories due to large capital investments and significant on the job training. Such jobs are much less available in the post-2001 era in the U.S. though they remain available in Germany, Switzerland and Japan, leading to calls to bring those jobs back from overseas, establish protectionism, and reduce immigration.
Making it illegal for companies to purchase shares of their own stock has not yet gained traction as a remedy for the diversion of operating profits away from reinvestment in equipment and people.
Manufacturing continues to evolve, due to factors such as information technology, supply chain innovations such as containerization, companies un-bundling tasks that used to be in one location or business, reduced barriers to trade, and competition from low-cost developing countries such as China and Mexico. Competition from high wage nations such as Germany is also increasing.
Size of Industry:
The United States is the world's second largest manufacturer (after China) with a record high real output in Q1 2018 of $2.00 trillion (i.e., adjusted for inflation in 2009 Dollars) well above the 2007 peak before the Great Recession of $1.95 trillion. The U.S. manufacturing industry employed 12.35 million people in December 2016 and 12.56 million in December 2017, an increase of 207,000 or 1.7%.
During 2016, the U.S. exported $1,051 billion in manufactured goods and imported $1,920 billion, a manufacturing goods deficit of $868 billion. The largest exports were transportation equipment ($252B), Chemicals ($174B), Computers and Electronic Products ($116B) and "Machinery-Except Electrical" ($109B).
History of Employment in Manufacturing:
Further information: NAFTA
Between 1980 and 1985, US manufacturing was hard hit by a twin dynamic: first, Japanese productivity rose at a rapid rate, so that Japanese products fell in price by 12%. Second, Fed Chair Paul Volcker raised US interest rates such that the US dollar appreciated.
This was the opposite policy from that which a rise in Japanese productivity would have dicated, and the US policy action made Japanese products 30% cheaper than American until 1986. The US machine tool sector never recovered from this body blow.[11] Between 1983 and 2005, U.S. exports grew by 340 percent, with exports of manufactured goods increasing by 407 percent over the same period.
In 1983, the primary export commodities were transportation equipment, computer and electronic products, agricultural products, machinery (except electrical), chemicals, and food and kindred products. Together these commodities totaled 69 percent of total U.S. exports.
In 2005, the primary export commodities were largely the same: computer and electronic products, transportation equipment, chemicals, machinery (except electrical), miscellaneous manufactured commodities, and agricultural products. Together these commodities accounted for 69 percent of total U.S. merchandise exports.
Between 1983 and 2005, exports of computer and electronic products grew by 493 percent, overtaking transportation as the leading export commodity (which grew by 410 percent).
Though agricultural products exports grew by 26 percent during this period, its share of overall merchandise exports fell from 12 percent in 1983 to 4 percent in 2005.
In 1983, the top trading partners for U.S. exports were Canada (21 percent of total merchandise exports), Japan (11 percent), United Kingdom (5 percent), Mexico (4 percent), Germany (4 percent), the Netherlands (4 percent), Saudi Arabia (3 percent), France (3 percent), Korea (3 percent), and Belgium and Luxembourg (2 percent).
In 2005, the top markets for U.S. exports were Canada (24 percent), Mexico (13 percent), Japan (6 percent), China (5 percent), United Kingdom (4 percent), Germany (4 percent), South Korea (3 percent), the Netherlands (3 percent), France (2 percent), and Taiwan (2 percent). Between 1983 and 2005, exports to Mexico increased by 1,228 percent, allowing it to replace Japan as the second-largest market for U.S. exports.
In the first quarter of 2010, overall U.S. merchandise exports increased by 20 percent compared to the first quarter of 2009, with manufactured goods exports increasing by 20 percent. As in 2009, the highest export commodities were transportation equipment, computer and electronic products, chemicals, machinery (except electrical), agricultural products, and miscellaneous manufactured commodities.
In the first quarter of 2010, the primary markets for U.S. merchandise exports were Canada, Mexico, China, Japan, the United Kingdom, Germany, South Korea, Brazil, the Netherlands, and Singapore.
With the exception of the Netherlands, exports to all of these countries increased in the first quarter of 2010, compared to the same quarter in 2009. Notably, exports to Canada increased by 22 percent, Mexico by 28 percent, and China by 47 percent over this period. Exports to the two NAFTA partners accounted for nearly one-third (32 percent) of U.S. merchandise trade in the first quarter of 2010.
The panel chart below includes four diagrams describing manufacturing labor, output, and productivity historical trends through 2016:
The U.S. manufacturing industry employed 12.35 million people in December 2016 and 12.56 million in December 2017, an increase of 207,000 or 1.7%. Though still a large part of the US economy, in Q1 2018 manufacturing contributed less to GDP then the 'Finance, insurance, real estate, rental, and leasing' sector, the 'Government' sector, or 'Professional and business services' sector.
Though manufacturing output robustly recovered from the Great Recession to reach an all time high in 2018, manufacturing employment has been declining since the 1990s. This 'jobless recovery' made job creation or preservation in the manufacturing sector an important topic in the 2016 U.S. presidential election.
Employment in Manufacturing:
Manufacturing jobs helped build out the U.S. middle class after World War II, as the U.S. established pro-labor policies and faced limited global competition. Between 1980 and 1985, and then again 2001 to 2009, there were precipitous declines in US manufacturing jobs; it is estimated that 1/3 of US manufacturing jobs vanished in the eight years 2001 to 2009, and few have returned. Some argue that the 2001-2009 period was worse for US manufacturing than the Great Depression.
There are several possible explanations for the decline. Bill Lazonick argues that legalization of company's buying their own shares of stock in 1982 has led to sustained stock market bubbles that distorted investment away from physical plant.
Others point to automation or developments outside the United States, such as the rise of China, globalized free trade, and supply chain innovation. These have arguably resulted in the off-shoring of thousands of U.S. manufacturing facilities and millions of manufacturing jobs to lower-wage countries.
The Bureau of Labor Statistics (BLS) forecast in October 2017 that manufacturing employment would fall from 12.3 million in 2016 to 11.6 million in 2026, a decline of 736,000. As a share of employment, manufacturing would fall from 7.9% in 2016 to 6.9% in 2026, continuing a long-term trend.
The U.S. manufacturing industry employed 12.4 million people in March 2017, generating output (nominal GDP) of $2.2 trillion in Q3 2016, with real GDP of $1.9 trillion in 2009 dollars. The share of persons employed in manufacturing relative to total employment has steadily declined since the 1960s.
Employment growth in industries such as construction, finance, insurance and real estate, and services industries played a significant role in reducing manufacturing’s overall share of U.S. employment. In 1990, services surpassed manufacturing as the largest contributor to overall private industry production, and then the finance, insurance and real estate sector surpassed manufacturing in 1991.
Since the entry of China into the World Trade Organization in December 2001, the decline in manufacturing jobs has accelerated. The U.S. goods trade deficit (imports greater than exports) with China was approximately $350 billion in 2016. However it is possible that the import of goods from China is a result rather than a cause.
The US stock market also ended a sustained fourteen year bubble in 2001, and the ensuing job loss pushed a significant portion of US population below the poverty line. In the context of a broken social safety net, many Americans with children are turning to imported goods from China for basic subsistence, in effect joining people of developing countries as China's natural market niche.
The Economist reported in January 2017 that manufacturing historically created good paying jobs for workers without a college education, particularly for men.
The jobs paid well enough so that women did not have to work when they had young children. Unions were strong and owners did not want to risk strikes in their factories due to large capital investments and significant on the job training. Such jobs are much less available in the post-2001 era in the U.S. though they remain available in Germany, Switzerland and Japan, leading to calls to bring those jobs back from overseas, establish protectionism, and reduce immigration.
Making it illegal for companies to purchase shares of their own stock has not yet gained traction as a remedy for the diversion of operating profits away from reinvestment in equipment and people.
Manufacturing continues to evolve, due to factors such as information technology, supply chain innovations such as containerization, companies un-bundling tasks that used to be in one location or business, reduced barriers to trade, and competition from low-cost developing countries such as China and Mexico. Competition from high wage nations such as Germany is also increasing.
Size of Industry:
The United States is the world's second largest manufacturer (after China) with a record high real output in Q1 2018 of $2.00 trillion (i.e., adjusted for inflation in 2009 Dollars) well above the 2007 peak before the Great Recession of $1.95 trillion. The U.S. manufacturing industry employed 12.35 million people in December 2016 and 12.56 million in December 2017, an increase of 207,000 or 1.7%.
During 2016, the U.S. exported $1,051 billion in manufactured goods and imported $1,920 billion, a manufacturing goods deficit of $868 billion. The largest exports were transportation equipment ($252B), Chemicals ($174B), Computers and Electronic Products ($116B) and "Machinery-Except Electrical" ($109B).
History of Employment in Manufacturing:
Further information: NAFTA
Between 1980 and 1985, US manufacturing was hard hit by a twin dynamic: first, Japanese productivity rose at a rapid rate, so that Japanese products fell in price by 12%. Second, Fed Chair Paul Volcker raised US interest rates such that the US dollar appreciated.
This was the opposite policy from that which a rise in Japanese productivity would have dicated, and the US policy action made Japanese products 30% cheaper than American until 1986. The US machine tool sector never recovered from this body blow.[11] Between 1983 and 2005, U.S. exports grew by 340 percent, with exports of manufactured goods increasing by 407 percent over the same period.
In 1983, the primary export commodities were transportation equipment, computer and electronic products, agricultural products, machinery (except electrical), chemicals, and food and kindred products. Together these commodities totaled 69 percent of total U.S. exports.
In 2005, the primary export commodities were largely the same: computer and electronic products, transportation equipment, chemicals, machinery (except electrical), miscellaneous manufactured commodities, and agricultural products. Together these commodities accounted for 69 percent of total U.S. merchandise exports.
Between 1983 and 2005, exports of computer and electronic products grew by 493 percent, overtaking transportation as the leading export commodity (which grew by 410 percent).
Though agricultural products exports grew by 26 percent during this period, its share of overall merchandise exports fell from 12 percent in 1983 to 4 percent in 2005.
In 1983, the top trading partners for U.S. exports were Canada (21 percent of total merchandise exports), Japan (11 percent), United Kingdom (5 percent), Mexico (4 percent), Germany (4 percent), the Netherlands (4 percent), Saudi Arabia (3 percent), France (3 percent), Korea (3 percent), and Belgium and Luxembourg (2 percent).
In 2005, the top markets for U.S. exports were Canada (24 percent), Mexico (13 percent), Japan (6 percent), China (5 percent), United Kingdom (4 percent), Germany (4 percent), South Korea (3 percent), the Netherlands (3 percent), France (2 percent), and Taiwan (2 percent). Between 1983 and 2005, exports to Mexico increased by 1,228 percent, allowing it to replace Japan as the second-largest market for U.S. exports.
In the first quarter of 2010, overall U.S. merchandise exports increased by 20 percent compared to the first quarter of 2009, with manufactured goods exports increasing by 20 percent. As in 2009, the highest export commodities were transportation equipment, computer and electronic products, chemicals, machinery (except electrical), agricultural products, and miscellaneous manufactured commodities.
In the first quarter of 2010, the primary markets for U.S. merchandise exports were Canada, Mexico, China, Japan, the United Kingdom, Germany, South Korea, Brazil, the Netherlands, and Singapore.
With the exception of the Netherlands, exports to all of these countries increased in the first quarter of 2010, compared to the same quarter in 2009. Notably, exports to Canada increased by 22 percent, Mexico by 28 percent, and China by 47 percent over this period. Exports to the two NAFTA partners accounted for nearly one-third (32 percent) of U.S. merchandise trade in the first quarter of 2010.
The panel chart below includes four diagrams describing manufacturing labor, output, and productivity historical trends through 2016:
- Figure 1-Job measures: The blue line (left axis) is the ratio of manufacturing jobs to the total number of non-farm payroll jobs. It has declined since the 1960s as manufacturing jobs fell and services expanded. The red line (right axis) is the number of manufacturing jobs (000s), which had fallen by nearly one-third since the late 1990s.
- Figure 2-Output measures: Real (inflation adjusted) GDP (blue line) and nominal GDP (red line) from the manufacturing sector. While both rose from the trough due to the Great Recession, the real GDP had yet to regain its pre-crisis (2007) level as of 2016.
- Figure 3-Job measures, indexed: The red line shows the percent change in manufacturing jobs, measured relative to the 1999 as the starting point. The blue line shows construction jobs. Both were below pre-crisis levels in 2016.
- Figure 4-Productivity measures, indexed: Measured from the end of the recession (June 2009), employment (green line) is up about 5%, but real output is up over 30%, indicating a significant gain in productivity (i.e., output per labor hour).
History of Employment in Manufacturing:
Further information: NAFTA
Between 1980 and 1985, US manufacturing was hard hit by a twin dynamic: first, Japanese productivity rose at a rapid rate, so that Japanese products fell in price by 12%. Second, Fed Chair Paul Volcker raised US interest rates such that the US dollar appreciated. This was the opposite policy from that which a rise in Japanese productivity would have dicated, and the US policy action made Japanese products 30% cheaper than American until 1986. The US machine tool sector never recovered from this body blow.
Between 1983 and 2005, U.S. exports grew by 340 percent, with exports of manufactured goods increasing by 407 percent over the same period.
In 1983, the primary export commodities were transportation equipment, computer and electronic products, agricultural products, machinery (except electrical), chemicals, and food and kindred products. Together these commodities totaled 69 percent of total U.S. exports.
In 2005, the primary export commodities were largely the same: computer and electronic products, transportation equipment, chemicals, machinery (except electrical), miscellaneous manufactured commodities, and agricultural products. Together these commodities accounted for 69 percent of total U.S. merchandise exports.
Between 1983 and 2005, exports of computer and electronic products grew by 493 percent, overtaking transportation as the leading export commodity (which grew by 410 percent).
Though agricultural products exports grew by 26 percent during this period, its share of overall merchandise exports fell from 12 percent in 1983 to 4 percent in 2005.
In 1983, the top trading partners for U.S. exports were Canada (21 percent of total merchandise exports), Japan (11 percent), United Kingdom (5 percent), Mexico (4 percent), Germany (4 percent), the Netherlands (4 percent), Saudi Arabia (3 percent), France (3 percent), Korea (3 percent), and Belgium and Luxembourg (2 percent).
In 2005, the top markets for U.S. exports were Canada (24 percent), Mexico (13 percent), Japan (6 percent), China (5 percent), United Kingdom (4 percent), Germany (4 percent), South Korea (3 percent), the Netherlands (3 percent), France (2 percent), and Taiwan (2 percent). Between 1983 and 2005, exports to Mexico increased by 1,228 percent, allowing it to replace Japan as the second-largest market for U.S. exports.
In the first quarter of 2010, overall U.S. merchandise exports increased by 20 percent compared to the first quarter of 2009, with manufactured goods exports increasing by 20 percent. As in 2009, the highest export commodities were transportation equipment, computer and electronic products, chemicals, machinery (except electrical), agricultural products, and miscellaneous manufactured commodities.
In the first quarter of 2010, the primary markets for U.S. merchandise exports were:
With the exception of the Netherlands, exports to all of these countries increased in the first quarter of 2010, compared to the same quarter in 2009. Notably, exports to Canada increased by 22 percent, Mexico by 28 percent, and China by 47 percent over this period. Exports to the two NAFTA partners accounted for nearly one-third (32 percent) of U.S. merchandise trade in the first quarter of 2010.
Modern Manufacturing:
The Economist reported in January 2017 that manufacturing historically created good paying jobs for workers without a college education, particularly for men. Unions were strong and owners did not want to risk strikes in their factories due to large capital investments.
Such jobs are much less available in the post-1990 era in the U.S. and other developed countries, leading to calls to bring those jobs back from overseas, establish protectionism, and reduce immigration.
Manufacturing continues to evolve, due to factors such as information technology, supply chain innovations such as containerization, companies un-bundling tasks that used to be in one location or business, reduced barriers to trade, and competition from low-cost developing countries such as China and Mexico.
Manufacturing is conducted among globally distributed supply chains, with various stages of production conducted in different countries. For example, automotive parts may be manufactured in the U.S., shipped to Mexico for assembly, then sent back to the U.S. In some cases, the components of the final product cross the border multiple times.
An estimated 40% of the value of U.S. imports from Mexico is from content produced in the U.S.; this figure is 25% for Canada but only 4% for China. This "production sharing" is an indication of the integrated nature of the supply chains between the U.S., Mexico and Canada in the NAFTA region.
The largest manufacturing industries in the United States by revenue include petroleum, steel, automobiles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, and mining.
A large portion of U.S. industrial output, the United States leads the world in airplane manufacturing. American companies such as Boeing, Cessna (see: Textron), Lockheed Martin (see: Skunk Works), and General Dynamics produce a vast majority of the world's civilian and military aircraft in factories stretching across the United States.
Manufacturing employment and trade policy:
Further information: NAFTA's effect on United States employment
U.S. manufacturing employment has declined steadily as a share of total employment, from around 28% in 1960 to 8% in March 2017. Manufacturing employment has fallen from 17.2 million persons in December 2000 to 12.4 million in March 2017, a decline of about 5.7 million or about one-third.
An estimated 1-2 million of the job losses in manufacturing 1999–2011 were due to competition with China, which entered the World Trade Organization in December 2001.
The Economic Policy Institute estimated that the trade deficit with China cost about 2.7 million jobs between 2001 and 2011, including manufacturing and other industries.
While U.S. manufacturing employment is down, output was near a record level in 2017 in real GDP terms, indicating productivity (output per worker) has also improved significantly. This is likely due to automation, global supply chains, process improvements, and other technology changes.
Economist Paul Krugman argued in December 2016 that "America’s shift away from manufacturing doesn’t have much to do with trade, and even less to do with trade policy." He also cited the work of other economists indicating that the declines in manufacturing employment from 1999-2011 due to trade policy generally and trade with China specifically were "less than a fifth of the absolute loss of manufacturing jobs over the period" but that the effects were significant for regions directly impacted by those losses.
International comparison:
The Congressional Research Service reported in January 2017 that:
U.S. manufacturing employment forecast:
The Bureau of Labor Statistics projected in October 2017 that:
Commentary:
One narrative about the industry (described pejoratively as "manufacturing fetishism") argues two mistaken fallacies, that: 1) a country cannot develop without a strong manufacturing base; 2. trade restrictions are essential to strengthen manufacturing based and spur economic growth.
However, researchers find the manufacturing share is not significantly correlated with a higher standard of living nor various measures of economic growth. Researchers have found that a strong middle class and support for public education is highly correlated with manufacturing.
In contrast, trade restrictions at home and abroad shrink the manufacturing base and stifle economic growth. Instead of protectionism and industry-specific subsidy, improving governance effectiveness and the quality of regulation can enhance economic growth. Making stock buybacks illegal would help.
See also:
Further information: NAFTA
Between 1980 and 1985, US manufacturing was hard hit by a twin dynamic: first, Japanese productivity rose at a rapid rate, so that Japanese products fell in price by 12%. Second, Fed Chair Paul Volcker raised US interest rates such that the US dollar appreciated. This was the opposite policy from that which a rise in Japanese productivity would have dicated, and the US policy action made Japanese products 30% cheaper than American until 1986. The US machine tool sector never recovered from this body blow.
Between 1983 and 2005, U.S. exports grew by 340 percent, with exports of manufactured goods increasing by 407 percent over the same period.
In 1983, the primary export commodities were transportation equipment, computer and electronic products, agricultural products, machinery (except electrical), chemicals, and food and kindred products. Together these commodities totaled 69 percent of total U.S. exports.
In 2005, the primary export commodities were largely the same: computer and electronic products, transportation equipment, chemicals, machinery (except electrical), miscellaneous manufactured commodities, and agricultural products. Together these commodities accounted for 69 percent of total U.S. merchandise exports.
Between 1983 and 2005, exports of computer and electronic products grew by 493 percent, overtaking transportation as the leading export commodity (which grew by 410 percent).
Though agricultural products exports grew by 26 percent during this period, its share of overall merchandise exports fell from 12 percent in 1983 to 4 percent in 2005.
In 1983, the top trading partners for U.S. exports were Canada (21 percent of total merchandise exports), Japan (11 percent), United Kingdom (5 percent), Mexico (4 percent), Germany (4 percent), the Netherlands (4 percent), Saudi Arabia (3 percent), France (3 percent), Korea (3 percent), and Belgium and Luxembourg (2 percent).
In 2005, the top markets for U.S. exports were Canada (24 percent), Mexico (13 percent), Japan (6 percent), China (5 percent), United Kingdom (4 percent), Germany (4 percent), South Korea (3 percent), the Netherlands (3 percent), France (2 percent), and Taiwan (2 percent). Between 1983 and 2005, exports to Mexico increased by 1,228 percent, allowing it to replace Japan as the second-largest market for U.S. exports.
In the first quarter of 2010, overall U.S. merchandise exports increased by 20 percent compared to the first quarter of 2009, with manufactured goods exports increasing by 20 percent. As in 2009, the highest export commodities were transportation equipment, computer and electronic products, chemicals, machinery (except electrical), agricultural products, and miscellaneous manufactured commodities.
In the first quarter of 2010, the primary markets for U.S. merchandise exports were:
- Canada,
- Mexico,
- China,
- Japan,
- the United Kingdom,
- Germany,
- South Korea,
- Brazil,
- the Netherlands,
- and Singapore.
With the exception of the Netherlands, exports to all of these countries increased in the first quarter of 2010, compared to the same quarter in 2009. Notably, exports to Canada increased by 22 percent, Mexico by 28 percent, and China by 47 percent over this period. Exports to the two NAFTA partners accounted for nearly one-third (32 percent) of U.S. merchandise trade in the first quarter of 2010.
Modern Manufacturing:
The Economist reported in January 2017 that manufacturing historically created good paying jobs for workers without a college education, particularly for men. Unions were strong and owners did not want to risk strikes in their factories due to large capital investments.
Such jobs are much less available in the post-1990 era in the U.S. and other developed countries, leading to calls to bring those jobs back from overseas, establish protectionism, and reduce immigration.
Manufacturing continues to evolve, due to factors such as information technology, supply chain innovations such as containerization, companies un-bundling tasks that used to be in one location or business, reduced barriers to trade, and competition from low-cost developing countries such as China and Mexico.
Manufacturing is conducted among globally distributed supply chains, with various stages of production conducted in different countries. For example, automotive parts may be manufactured in the U.S., shipped to Mexico for assembly, then sent back to the U.S. In some cases, the components of the final product cross the border multiple times.
An estimated 40% of the value of U.S. imports from Mexico is from content produced in the U.S.; this figure is 25% for Canada but only 4% for China. This "production sharing" is an indication of the integrated nature of the supply chains between the U.S., Mexico and Canada in the NAFTA region.
The largest manufacturing industries in the United States by revenue include petroleum, steel, automobiles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, and mining.
A large portion of U.S. industrial output, the United States leads the world in airplane manufacturing. American companies such as Boeing, Cessna (see: Textron), Lockheed Martin (see: Skunk Works), and General Dynamics produce a vast majority of the world's civilian and military aircraft in factories stretching across the United States.
Manufacturing employment and trade policy:
Further information: NAFTA's effect on United States employment
U.S. manufacturing employment has declined steadily as a share of total employment, from around 28% in 1960 to 8% in March 2017. Manufacturing employment has fallen from 17.2 million persons in December 2000 to 12.4 million in March 2017, a decline of about 5.7 million or about one-third.
An estimated 1-2 million of the job losses in manufacturing 1999–2011 were due to competition with China, which entered the World Trade Organization in December 2001.
The Economic Policy Institute estimated that the trade deficit with China cost about 2.7 million jobs between 2001 and 2011, including manufacturing and other industries.
While U.S. manufacturing employment is down, output was near a record level in 2017 in real GDP terms, indicating productivity (output per worker) has also improved significantly. This is likely due to automation, global supply chains, process improvements, and other technology changes.
Economist Paul Krugman argued in December 2016 that "America’s shift away from manufacturing doesn’t have much to do with trade, and even less to do with trade policy." He also cited the work of other economists indicating that the declines in manufacturing employment from 1999-2011 due to trade policy generally and trade with China specifically were "less than a fifth of the absolute loss of manufacturing jobs over the period" but that the effects were significant for regions directly impacted by those losses.
International comparison:
The Congressional Research Service reported in January 2017 that:
- "The United States’ share of global manufacturing activity declined from 28% in 2002, following the end of the 2001 U.S. recession, to 16.5% in 2011. Since then,the U.S. share has risen to 18.6%, the largest share since 2009. These estimates are based on the value of each country’s manufacturing in U.S. dollars; part of the decline in the U.S. share was due to a 23% decline in the value of the dollar between 2002 and 2011, and part of the rise since 2011 is attributable to a stronger dollar.
- China displaced the United States as the largest manufacturing country in 2010. Again, part of China’s rise by this measure has been due to the appreciation of its currency, the renminbi, against the U.S. dollar. The reported size of China’s manufacturing sector decreased slightly in 2015 due to currency adjustments.
- Manufacturing output, measured in each country’s local currency adjusted for inflation, has been growing more slowly in the United States than in China, South Korea, Germany, and Mexico, but more rapidly than in most European countries and Canada.
- Employment in manufacturing has fallen in most major manufacturing countries over the past quarter-century. In the United States, manufacturing employment since 1990 has declined in line with the changes in Western Europe and Japan, although the timing of the decline has differed from country to country.
- U.S. manufacturers spend far more on research and development (R&D) than those in any other country, but manufacturers’ R&D spending is rising more rapidly in several other countries.
- Manufacturers in many countries appear to be spending increasing amounts on R&D, relative to their value added. U.S. manufacturers spend approximately 11% of value added on R&D, an increase of more than three percentage points since 2002. A large proportion of U.S. manufacturers’ R&D takes place in high technology sectors, such as pharmaceutical, electronics, and aircraft manufacturing, whereas in most other countries the largest share of R&D occurs in medium-technology sectors such as automotive and machinery manufacturing."
U.S. manufacturing employment forecast:
The Bureau of Labor Statistics projected in October 2017 that:
- 10.5 of the 11.5 million net jobs created (90%) over the 2016-2026 period would be in services. The service jobs growth rate would be about 0.8%. However, the goods producing sector, which includes manufacturing, would only add 219,000 jobs over that period, growing at a rate of 0.1%.
- Manufacturing employment would fall from 12.3 million in 2016 to 11.6 million in 2026, a decline of 736,000. As a share of employment, manufacturing would fall from 7.9% in 2016 to 6.9% in 2026.
- Employment in production occupations (a subset of manufacturing) was expected to fall from 9.4 million in 2016 to 9.0 million in 2026 (a 4% decline), falling from 6.0% of employment to 5.4%.
Commentary:
One narrative about the industry (described pejoratively as "manufacturing fetishism") argues two mistaken fallacies, that: 1) a country cannot develop without a strong manufacturing base; 2. trade restrictions are essential to strengthen manufacturing based and spur economic growth.
However, researchers find the manufacturing share is not significantly correlated with a higher standard of living nor various measures of economic growth. Researchers have found that a strong middle class and support for public education is highly correlated with manufacturing.
In contrast, trade restrictions at home and abroad shrink the manufacturing base and stifle economic growth. Instead of protectionism and industry-specific subsidy, improving governance effectiveness and the quality of regulation can enhance economic growth. Making stock buybacks illegal would help.
See also:
- Economy of the United States
- National Network for Manufacturing Innovation
- U.S. Chamber of Commerce
- Working: People Talk About What They Do All Day and How They Feel About What They Do – American workers on their jobs in the 1970s
Manufacturing USA
YouTube Video: The Future of Manufacturing*
* - Carnegie Mellon University
YouTube Video: About DMDII*
* -- Digital Manufacturing Design and Innovation Institute)
Pictured below: The NAMII logo
The National Network for Manufacturing Innovation (NNMI), also known as Manufacturing USA, is a network of research institutes in the United States that focuses on developing manufacturing technologies through public-private partnerships among U.S. industry, universities, and federal government agencies.
Modeled similar to Germany's Fraunhofer Institutes, the network currently consists of 14 institutes. The institutes work independently and together in a number of advanced technologies.
Click on any of the following blue hyperlinks for more about Manufacturing USA:
Modeled similar to Germany's Fraunhofer Institutes, the network currently consists of 14 institutes. The institutes work independently and together in a number of advanced technologies.
Click on any of the following blue hyperlinks for more about Manufacturing USA:
- Institutes
- History
- Model
- See also:
- ManufacturingUSA official website (cost-shared public-private partnership)
- NNMI official website
- NNMI institutes
- DIUx
- Defense Innovation Advisory Board
The Service Sector of Business in the United States including a List of Service Industries
YouTube Video: How to Become a Registered Nurse*
YouTube Video: NURSES: Their Vital Role in Transforming Healthcare*
* - By Johnson & Johnson Nursing
Pictured below: The Bureau of Labor Statistics has published a new report showing the top 10 most common professions in the U.S (April, 2014)
YouTube Video: How to Become a Registered Nurse*
YouTube Video: NURSES: Their Vital Role in Transforming Healthcare*
* - By Johnson & Johnson Nursing
Pictured below: The Bureau of Labor Statistics has published a new report showing the top 10 most common professions in the U.S (April, 2014)
Click here for a Listing of Service Industries.
The service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (approximately the same as manufacturing), and the primary sector (raw materials).
The service sector consists of the production of services instead of end products. Services (also known as "intangible goods") include attention, advice, access, experience, and affective labor.
The production of information has long been regarded as a service, but some economists now attribute it to a fourth sector, the quaternary sector.
The service sector of industry involves the provision of services to other businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer, as may happen in wholesaling and retailing, pest control or entertainment.
The goods may be transformed in the process of providing the service, as happens in the restaurant industry. However, the focus is on people interacting with people and serving the customer rather than transforming physical goods.
It is sometimes hard to define whether a given company is part and parcel of the secondary or tertiary sector. And it is not only companies that have been classified as part of that sector in some schemes; government and its services such as police or military, and non-profit organizations such as charities or research associations can also be seen as part of that sector.
In order to classify a business as a service, one can use classification systems such as the United Nations' International Standard Industrial Classification standard, the United States' Standard Industrial Classification (SIC) code system and its new replacement, the North American Industrial Classification System (NAICS), the Statistical Classification of Economic Activities in the European Community (NACE) in the EU and similar systems elsewhere.
These governmental classification systems have a first-level hierarchy that reflects whether the economic goods are tangible or intangible.
For purposes of finance and market research, market-based classification systems such as the Global Industry Classification Standard and the Industry Classification Benchmark are used to classify businesses that participate in the service sector.
Unlike governmental classification systems, the first level of market-based classification systems divides the economy into functionally related markets or industries. The second or third level of these hierarchies then reflects whether goods or services are produced.
For the last 100 years, there has been a substantial shift from the primary and secondary sectors to the tertiary sector in industrialized countries. This shift is called tertiarisation.The service sector is now the largest sector of the economy in the Western world, and is also the fastest-growing sector.
In examining the growth of the service sector in the early Nineties, the globalist Kenichi Ohmae noted that "In the United States 70 percent of the workforce works in the service sector; in Japan, 60 percent, and in Taiwan, 50 percent. These are not necessarily busboys and live-in maids. Many of them are in the professional category. They are earning as much as manufacturing workers, and often more.”
Economies tend to follow a developmental progression that takes them from a heavy reliance on agriculture and mining, toward the development of manufacturing (e.g. automobiles, textiles, shipbuilding, steel) and finally toward a more service-based structure. The first economy to follow this path in the modern world was the United Kingdom. The speed at which other economies have made the transition to service-based (or "post-industrial") economies has increased over time.
Historically, manufacturing tended to be more open to international trade and competition than services. However, with dramatic cost reduction and speed and reliability improvements in the transportation of people and the communication of information, the service sector now includes some of the most intensive international competition, despite residual protectionism.
Issues for service providers:
Service providers face obstacles selling services that goods-sellers rarely face. Services are intangible, making it difficult for potential customers to understand what they will receive and what value it will hold for them. Indeed, some, such as consultants and providers of investment services, offer no guarantees of the value for price paid.
Since the quality of most services depends largely on the quality of the individuals providing the services, "people costs" are usually a high fraction of service costs. Whereas a manufacturer may use technology, simplification, and other techniques to lower the cost of goods sold, the service provider often faces an unrelenting pattern of increasing costs.
Product differentiation is often difficult. For example, how does one choose one investment adviser over another, since they are often seen to provide identical services? Charging a premium for services is usually an option only for the most established firms, who charge extra based upon brand recognition.
Examples of service sector industries can include:
The service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (approximately the same as manufacturing), and the primary sector (raw materials).
The service sector consists of the production of services instead of end products. Services (also known as "intangible goods") include attention, advice, access, experience, and affective labor.
The production of information has long been regarded as a service, but some economists now attribute it to a fourth sector, the quaternary sector.
The service sector of industry involves the provision of services to other businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer, as may happen in wholesaling and retailing, pest control or entertainment.
The goods may be transformed in the process of providing the service, as happens in the restaurant industry. However, the focus is on people interacting with people and serving the customer rather than transforming physical goods.
It is sometimes hard to define whether a given company is part and parcel of the secondary or tertiary sector. And it is not only companies that have been classified as part of that sector in some schemes; government and its services such as police or military, and non-profit organizations such as charities or research associations can also be seen as part of that sector.
In order to classify a business as a service, one can use classification systems such as the United Nations' International Standard Industrial Classification standard, the United States' Standard Industrial Classification (SIC) code system and its new replacement, the North American Industrial Classification System (NAICS), the Statistical Classification of Economic Activities in the European Community (NACE) in the EU and similar systems elsewhere.
These governmental classification systems have a first-level hierarchy that reflects whether the economic goods are tangible or intangible.
For purposes of finance and market research, market-based classification systems such as the Global Industry Classification Standard and the Industry Classification Benchmark are used to classify businesses that participate in the service sector.
Unlike governmental classification systems, the first level of market-based classification systems divides the economy into functionally related markets or industries. The second or third level of these hierarchies then reflects whether goods or services are produced.
For the last 100 years, there has been a substantial shift from the primary and secondary sectors to the tertiary sector in industrialized countries. This shift is called tertiarisation.The service sector is now the largest sector of the economy in the Western world, and is also the fastest-growing sector.
In examining the growth of the service sector in the early Nineties, the globalist Kenichi Ohmae noted that "In the United States 70 percent of the workforce works in the service sector; in Japan, 60 percent, and in Taiwan, 50 percent. These are not necessarily busboys and live-in maids. Many of them are in the professional category. They are earning as much as manufacturing workers, and often more.”
Economies tend to follow a developmental progression that takes them from a heavy reliance on agriculture and mining, toward the development of manufacturing (e.g. automobiles, textiles, shipbuilding, steel) and finally toward a more service-based structure. The first economy to follow this path in the modern world was the United Kingdom. The speed at which other economies have made the transition to service-based (or "post-industrial") economies has increased over time.
Historically, manufacturing tended to be more open to international trade and competition than services. However, with dramatic cost reduction and speed and reliability improvements in the transportation of people and the communication of information, the service sector now includes some of the most intensive international competition, despite residual protectionism.
Issues for service providers:
Service providers face obstacles selling services that goods-sellers rarely face. Services are intangible, making it difficult for potential customers to understand what they will receive and what value it will hold for them. Indeed, some, such as consultants and providers of investment services, offer no guarantees of the value for price paid.
Since the quality of most services depends largely on the quality of the individuals providing the services, "people costs" are usually a high fraction of service costs. Whereas a manufacturer may use technology, simplification, and other techniques to lower the cost of goods sold, the service provider often faces an unrelenting pattern of increasing costs.
Product differentiation is often difficult. For example, how does one choose one investment adviser over another, since they are often seen to provide identical services? Charging a premium for services is usually an option only for the most established firms, who charge extra based upon brand recognition.
Examples of service sector industries can include:
- Telecommunication
- Hospitality industry/tourism
- Mass media
- Healthcare/hospitals
- Public health
- Information technology
- Waste disposal
- Consulting
- Gambling
- Retail sales including Fast-moving consumer goods (FMCG)
- Franchising
- Real estate
- Education
- Financial services
- Professional services
Construction in the United States, including a List of Construction Industries
YouTube Video: Engineering Feats On Mega Iconic Bridges Construction
YouTube Video: 5 Amazing 3D PRINTED HOUSE Projects
Pictured:
(L) The 1,776 feet tall One World Trade Centre is the tallest building in New York City.
(R) The Golden Gate Bridge
Click here for a List of Construction Industries.
Construction is the process of constructing a building or infrastructure.
Construction differs from manufacturing in that manufacturing typically involves mass production of similar items without a designated purchaser, while construction typically takes place on location for a known client.
Construction as an industry comprises six to nine percent of the gross domestic product of developed countries.
Construction starts with planning, design, and financing; it continues until the project is built and ready for use.
Large-scale construction requires collaboration across multiple disciplines. A project manager normally manages the job, and a construction manager, design engineer, construction engineer or architect supervises it. Those involved with the design and execution must consider the following:
Construction is a general term meaning the art and science to form objects, systems, or organizations.
Sectors of Construction:
In general, there are three sectors of construction: buildings, infrastructure and industrial.
Building construction is usually further divided into residential and non-residential (commercial/institutional).
Infrastructure is often called heavy civil or heavy engineering that includes large public works, dams, bridges, highways, railways, water or wastewater and utility distribution.
Industrial construction includes refineries, process chemical, power generation, mills and manufacturing plants.
There are also other ways to break the industry into sectors or markets:
Industry sectors:
Engineering News-Record (ENR), a trade magazine for the construction industry, each year compiles and reports data about the size of design and construction companies.
In 2014, ENR compiled the data in ten market segments divided as:
In their reporting, they used data on transportation, sewer, hazardous waste and water to rank firms as heavy contractors.
The Standard Industrial Classification and the newer North American Industry Classification System have a classification system for companies that perform or engage in construction.
To recognize the differences of companies in this sector, it is divided into three subsectors:
There are also categories for construction service firms (e.g., engineering, architecture) and construction managers (firms engaged in managing construction projects without assuming direct financial responsibility for completion of the construction project).
Building Construction:
Building construction is the process of adding structure to real property or construction of buildings. The majority of building construction jobs are small renovations, such as addition of a room, or renovation of a bathroom. Often, the owner of the property acts as laborer, paymaster, and design team for the entire project.
Although building construction projects consist of common elements such as design, financial, estimating and legal considerations, projects of varying sizes may reach undesirable end results, such as structural collapse, cost overruns, and/or litigation. For this reason, those with experience in the field make detailed plans and maintain careful oversight during the project to ensure a positive outcome.
Commercial building construction is procured privately or publicly utilizing various delivery methodologies, including cost estimating, hard bid, negotiated price, traditional, management contracting, construction management-at-risk, design & build and design-build bridging.
Residential construction practices, technologies, and resources must conform to local building authority regulations and codes of practice. Materials readily available in the area generally dictate the construction materials used (e.g. brick versus stone, versus timber).
Cost of construction on a per square meter (or per square foot) basis for houses can vary dramatically based on site conditions, local regulations, economies of scale (custom designed homes are often more expensive to build) and the availability of skilled tradesmen.
Residential construction as well as other types of construction can generate waste such that planning is required.
According to McKinsey research, productivity growth per worker in construction has lagged behind many other industries across different countries including in the United States and in European countries. In the United States, construction productivity per worker has declined by half since the 1960s.
The most popular method of residential construction in North America is wood-framed construction.
Typical construction steps for a single-family or small multi-family house are:
New construction techniques and sustainability:
The development of efficiency codes has prompted the development of new construction technologies and methods, many pioneered by academic departments of construction management that seek to improve efficiency and performance while reducing construction waste.
New techniques of building construction are being researched, made possible by advances in 3D printing technology. In a form of additive building construction, similar to the additive manufacturing techniques for manufactured parts, building printing is making it possible to flexibly construct small commercial buildings and private habitations in around 20 hours, with built-in plumbing and electrical facilities, in one continuous build, using large 3D printers.
Working versions of 3D-printing building technology are already printing 2 metres (6 ft 7 in) of building material per hour as of January 2013, with the next-generation printers capable of 3.5 metres (11 ft) per hour, sufficient to complete a building in a week.
Dutch architect Janjaap Ruijssenaars's performative architecture 3D-printed building was scheduled to be built in 2014.
As in the last years the construction industry has been seeing a trend towards IT adoption, something it had always found hard to compete when paired against other fields like the manufacturing or healthcare industries, for example.
Nowadays, construction is starting to see the full potential of technological advancements, moving on to paperless construction, using the power of automation and adopting BIM, the internet of things, cloud storage and co-working, and mobile apps, implementation of surveying drones, and more.
In the current trend of sustainable construction, the recent movements of New Urbanism and New Classical Architecture promote a sustainable approach towards construction, that appreciates and develops smart growth, architectural tradition and classical design. This is in contrast to modernist and short-lived globally uniform architecture, as well as opposing solitary housing estates and suburban sprawl. Both trends started in the 1980s.
Wood is being introduced as a realistic material for skyscrapers (nicknamed "plyscrapers") thanks to new developments in super-strong engineered timber, whose collective name is "mass timber" and includes cross-laminated timber.
Processes:
Design Team:
In the industrialized world, construction usually involves the translation of designs into reality. A formal design team may be assembled to plan the physical proceedings, and to integrate those proceedings with the other parts.
The design usually consists of drawings and specifications, usually prepared by a design team including:
The design team is most commonly employed by (i.e. in contract with) the property owner.
Under this system, once the design is completed by the design team, a number of construction companies or construction management companies may then be asked to make a bid for the work, either based directly on the design, or on the basis of drawings and a bill of quantities provided by a quantity surveyor. Following evaluation of bids, the owner typically awards a contract to the most cost efficient bidder.
The best modern trend in design is toward integration of previously separated specialties, especially among large firms. In the past, architects, interior designers, engineers, developers, construction managers, and general contractors were more likely to be entirely separate companies, even in the larger firms.
Presently, a firm that is nominally an "architecture" or "construction management" firm may have experts from all related fields as employees, or to have an associated company that provides each necessary skill. Thus, each such firm may offer itself as "one-stop shopping" for a construction project, from beginning to end. This is designated as a "design build" contract where the contractor is given a performance specification and must undertake the project from design to construction, while adhering to the performance specifications.
Several project structures can assist the owner in this integration, including design-build, partnering and construction management. In general, each of these project structures allows the owner to integrate the services of architects, interior designers, engineers and constructors throughout design and construction. In response, many companies are growing beyond traditional offerings of design or construction services alone and are placing more emphasis on establishing relationships with other necessary participants through the design-build process.
The increasing complexity of construction projects creates the need for design professionals trained in all phases of the project's life-cycle and develop an appreciation of the building as an advanced technological system requiring close integration of many sub-systems and their individual components, including sustainability. Building engineering is an emerging discipline that attempts to meet this new challenge.
Financial Advisors:
Construction projects can suffer from preventable financial problems:
Financial planning for the project is intended to ensure that a solid plan with adequate safeguards and contingency plans are in place before the project is started and is required to ensure that the plan is properly executed over the life of the project.
Mortgage bankers, accountants, and cost engineers are likely participants in creating an overall plan for the financial management of the building construction project. The presence of the mortgage banker is highly likely, even in relatively small projects since the owner's equity in the property is the most obvious source of funding for a building project.
Accountants act to study the expected monetary flow over the life of the project and to monitor the payouts throughout the process. Cost engineers and estimators apply expertise to relate the work and materials involved to a proper valuation.
Cost overruns with government projects have occurred when the contractor identified change orders or project changes that increased costs, which are not subject to competition from other firms as they have already been eliminated from consideration after the initial bid.
Large projects can involve highly complex financial plans and often start with a conceptual estimate performed by a building estimator.
As portions of a project are completed, they may be sold, supplanting one lender or owner for another, while the logistical requirements of having the right trades and materials available for each stage of the building construction project carries forward. In many English-speaking countries, but not the United States, projects typically use quantity surveyors.
Legal Issues:
Main article: Construction law
A construction project must fit into the legal framework governing the property. These include governmental regulations on the use of property, and obligations that are created in the process of construction.
When applicable, the project must adhere to zoning and building code requirements. Constructing a project that fails to adhere to codes does not benefit the owner. Some legal requirements come from malum in se considerations, or the desire to prevent indisputably bad phenomena, e.g. explosions or bridge collapses.
Other legal requirements come from malum prohibitum considerations, or factors that are a matter of custom or expectation, such as isolating businesses from a business district or residences from a residential district.
An attorney may seek changes or exemptions in the law that governs the land where the building will be built, either by arguing that a rule is inapplicable (the bridge design will not cause a collapse), or that the custom is no longer needed (acceptance of live-work spaces has grown in the community).
A construction project is a complex net of contracts and other legal obligations, each of which all parties must carefully consider. A contract is the exchange of a set of obligations between two or more parties, but it is not so simple a matter as trying to get the other side to agree to as much as possible in exchange for as little as possible.
The time element in construction means that a delay costs money, and in cases of bottlenecks, the delay can be extremely expensive. Thus, the contracts must be designed to ensure that each side is capable of performing the obligations set out. Contracts that set out clear expectations and clear paths to accomplishing those expectations are far more likely to result in the project flowing smoothly, whereas poorly drafted contracts lead to confusion and collapse.
Legal advisors in the beginning of a construction project seek to identify ambiguities and other potential sources of trouble in the contract structure, and to present options for preventing problems. Throughout the process of the project, they work to avoid and resolve conflicts that arise. In each case, the lawyer facilitates an exchange of obligations that matches the reality of the project.
Interaction of Expertise:
Design, finance, and legal aspects overlap and interrelate. The design must be not only structurally sound and appropriate for the use and location, but must also be financially possible to build, and legal to use.
The financial structure must accommodate the need for building the design provided, and must pay amounts that are legally owed. The legal structure must integrate the design into the surrounding legal framework, and enforce the financial consequences of the construction process.
Procurement:
Procurement describes the merging of activities undertaken by the client to obtain a building. There are many different methods of construction procurement; however the three most common types of procurement are traditional (design-bid-build), design-build and management contracting.
There is also a growing number of new forms of procurement that involve relationship contracting where the emphasis is on a co-operative relationship among the principal, the contractor, and other stakeholders within a construction project.
New forms include partnering such as Public-Private Partnering (PPPs) aka private finance initiatives (PFIs) and alliances such as "pure" or "project" alliances and "impure" or "strategic" alliances. The focus on co-operation is to ameliorate the many problems that arise from the often highly competitive and adversarial practices within the construction industry.
Traditional:
Main article: Design–bid–build
This is the most common method of construction procurement and is well established and recognized. In this arrangement, the architect or engineer acts as the project coordinator. His or her role is to design the works, prepare the specifications and produce construction drawings, administer the contract, tender the works, and manage the works from inception to completion.
There are direct contractual links between the architect's client and the main contractor. Any subcontractor has a direct contractual relationship with the main contractor. The procedure continues until the building is ready to occupy.
Design-build:
Main article: Design-build
This approach has become more common in recent years, and also involves the client contracting a single entity that both provides a design and builds it. In some cases, the design-build package can also include finding the site, arranging funding and applying for all necessary statutory consents.
The owner produces a list of requirements for a project, giving an overall view of the project's goals. Several D&B contractors present different ideas about how to accomplish these goals. The owner selects the ideas they like best and hires the appropriate contractor.
Often, it is not just one contractor, but a consortium of several contractors working together. Once these have been hired, they begin building the first phase of the project. As they build phase 1, they design phase 2. This is in contrast to a design-bid-build contract, where the project is completely designed by the owner, then bid on, then completed.
Kent Hansen pointed out that state departments of transportation usually use design build contracts as a way of progressing projects when states lack the skills-resources. In such departments, design build contracts are usually employed for very large projects.
Management procurement systems:
Main article: Construction management
In this arrangement the client plays an active role in the procurement system by entering into separate contracts with the designer (architect or engineer), the construction manager, and individual trade contractors. The client takes on the contractual role, while the construction or project manager provides the active role of managing the separate trade contracts, and ensuring that they complete all work smoothly and effectively together.
Management procurement systems are often used to speed up the procurement processes, allow the client greater flexibility in design variation throughout the contract, give the ability to appoint individual work contractors, separate contractual responsibility on each individual throughout the contract, and to provide greater client control.
In recent time, construction software starts to get traction – as it digitizes construction industry. Among solutions, there are for example: Procore, GenieBelt, PlanGrid, bouw7, etc.
Authority having jurisdiction:
See also: Planning permission
In construction, the authority having jurisdiction (AHJ) is the governmental agency or sub-agency that regulates the construction process. In most cases, this is the municipality where the building is located. However, construction performed for supra-municipal authorities are usually regulated directly by the owning authority, which becomes the AHJ.
Before the foundation can be dug, contractors are typically required to verify and have existing utility lines marked, either by the utilities themselves or through a company specializing in such services. This lessens the likelihood of damage to the existing electrical, water, sewage, phone, and cable facilities, which could cause outages and potentially hazardous situations.
During the construction of a building, the municipal building inspector inspects the building periodically to ensure that the construction adheres to the approved plans and the local building code. Once construction is complete and a final inspection has been passed, an occupancy permit may be issued.
An operating building must remain in compliance with the fire code. The fire code is enforced by the local fire department or a municipal code enforcement office.
Changes made to a building that affect safety, including its use, expansion, structural integrity, and fire protection items, usually require approval of the AHJ for review concerning the building code.
Industry Characteristics:
In the United States, the industry in 2014 has around $960 billion in annual revenue according to statistics tracked by the Census Bureau, of which $680 billion is private (split evenly between residential and nonresidential) and the remainder is government.
In 2005, there were about 667,000 firms employing 1 million contractors (200,000 general contractors, 38,000 heavy, and 432,000 specialty); the average contractor employed fewer than 10 employees. As a whole, the industry employed an estimated 5.8 million in April 2013, with a 13.2% unemployment rate. In the United States, approximately 828,000 women were employed in the construction industry as of 2011.
Careers:
There are many routes to the different careers within the construction industry. These three main tiers are based on educational background and training, which vary by country:
Skilled occupations include carpenters, electricians, plumbers, ironworkers, masons, and many other manual crafts, as well as those involved in project management. These qualifications are either obtained directly after the completion of compulsory education or through "on the job" apprenticeship training.
Technical and specialized occupations require more training as a greater technical knowledge is required. These professions also hold more legal responsibility.
A short list of the main careers with an outline of the educational requirements are given below:
In 2010 a salary survey revealed the differences in remuneration between different roles, sectors and locations in the construction and built environment industry. The results showed that areas of particularly strong growth in the construction industry, such as the Middle East, yield higher average salaries than in the UK for example.
The average earning for a professional in the construction industry in the Middle East, across all sectors, job types and levels of experience, is £42,090, compared to £26,719 in the UK.
This trend is not necessarily due to the fact that more affluent roles are available, however, as architects with 14 or more years experience working in the Middle East earn on average £43,389 per annum, compared to £40,000 in the UK. Some construction workers in the US/Canada have made more than $100,000 annually, depending on their trade.
Safety:
See also: Construction site safety
Construction is one of the most dangerous occupations in the world, incurring more occupational fatalities than any other sector in both the United States and in the European Union.
In 2009, the fatal occupational injury rate among construction workers in the United States was nearly three times that for all workers, with Falls being one of the most common causes of fatal and non-fatal injuries among construction workers.
Proper safety equipment such as harnesses, hard hats and guardrails and procedures such as securing ladders and inspecting scaffolding can curtail the risk of occupational injuries in the construction industry.
Other major causes of fatalities in the construction industry include electrocution, transportation accidents, and trench cave-ins.
Other safety risks for workers in construction include hearing loss due to high noise exposure, musculoskeletal injury, chemical exposure, and high levels of stress.
Construction has been identified by the National Institute for Occupational Safety and Health (NIOSH) as a priority industry sector in the National Occupational Research Agenda (NORA) to identify and provide intervention strategies regarding occupational health and safety issues
Click on any of the following blue hyperlinks for more about Construction:
Construction is the process of constructing a building or infrastructure.
Construction differs from manufacturing in that manufacturing typically involves mass production of similar items without a designated purchaser, while construction typically takes place on location for a known client.
Construction as an industry comprises six to nine percent of the gross domestic product of developed countries.
Construction starts with planning, design, and financing; it continues until the project is built and ready for use.
Large-scale construction requires collaboration across multiple disciplines. A project manager normally manages the job, and a construction manager, design engineer, construction engineer or architect supervises it. Those involved with the design and execution must consider the following:
- zoning requirements,
- environmental impact of the job,
- scheduling,
- budgeting,
- construction-site safety,
- availability and transportation of building materials,
- logistics, inconvenience to the public caused by construction delays and bidding. Large construction projects are sometimes referred to as mega-projects.
Construction is a general term meaning the art and science to form objects, systems, or organizations.
Sectors of Construction:
In general, there are three sectors of construction: buildings, infrastructure and industrial.
Building construction is usually further divided into residential and non-residential (commercial/institutional).
Infrastructure is often called heavy civil or heavy engineering that includes large public works, dams, bridges, highways, railways, water or wastewater and utility distribution.
Industrial construction includes refineries, process chemical, power generation, mills and manufacturing plants.
There are also other ways to break the industry into sectors or markets:
Industry sectors:
Engineering News-Record (ENR), a trade magazine for the construction industry, each year compiles and reports data about the size of design and construction companies.
In 2014, ENR compiled the data in ten market segments divided as:
- transportation,
- petroleum,
- buildings,
- power,
- industrial,
- water,
- manufacturing,
- sewer/waste,
- telecom,
- hazardous waste and a tenth category for other projects.
In their reporting, they used data on transportation, sewer, hazardous waste and water to rank firms as heavy contractors.
The Standard Industrial Classification and the newer North American Industry Classification System have a classification system for companies that perform or engage in construction.
To recognize the differences of companies in this sector, it is divided into three subsectors:
- building construction,
- heavy and civil engineering construction,
- and specialty trade contractors.
There are also categories for construction service firms (e.g., engineering, architecture) and construction managers (firms engaged in managing construction projects without assuming direct financial responsibility for completion of the construction project).
Building Construction:
Building construction is the process of adding structure to real property or construction of buildings. The majority of building construction jobs are small renovations, such as addition of a room, or renovation of a bathroom. Often, the owner of the property acts as laborer, paymaster, and design team for the entire project.
Although building construction projects consist of common elements such as design, financial, estimating and legal considerations, projects of varying sizes may reach undesirable end results, such as structural collapse, cost overruns, and/or litigation. For this reason, those with experience in the field make detailed plans and maintain careful oversight during the project to ensure a positive outcome.
Commercial building construction is procured privately or publicly utilizing various delivery methodologies, including cost estimating, hard bid, negotiated price, traditional, management contracting, construction management-at-risk, design & build and design-build bridging.
Residential construction practices, technologies, and resources must conform to local building authority regulations and codes of practice. Materials readily available in the area generally dictate the construction materials used (e.g. brick versus stone, versus timber).
Cost of construction on a per square meter (or per square foot) basis for houses can vary dramatically based on site conditions, local regulations, economies of scale (custom designed homes are often more expensive to build) and the availability of skilled tradesmen.
Residential construction as well as other types of construction can generate waste such that planning is required.
According to McKinsey research, productivity growth per worker in construction has lagged behind many other industries across different countries including in the United States and in European countries. In the United States, construction productivity per worker has declined by half since the 1960s.
The most popular method of residential construction in North America is wood-framed construction.
Typical construction steps for a single-family or small multi-family house are:
- Obtain an engineered soil test of lot where construction is planned
- Develop floor plans and obtain a materials list for estimations (more recently performed with estimating software)
- Obtain structural engineered plans for foundation (soil test report obtained earlier will be used by engineer to design foundation), floor plan, floor (if two story).
- Obtain lot survey
- Obtain government building approval if necessary
- If required obtain approval from HOA (homeowners association) or ARC (architectural review committee)
- Clear the building site (demolition of existing home if necessary)
- Survey to stake out for the foundation
- Excavate the foundation and dig footers (Scope of work is dependent of foundation designed by engineer)
- Install plumbing grounds
- Pour a foundation and footers with concrete
- Build the main load-bearing structure out of thick pieces of wood and possibly metal I-beams for large spans with few supports. See framing (construction)
- Add floor and ceiling joists and install subfloor panels
- Cover outer walls and roof in OSB or plywood and a water-resistive barrier.
- Install roof shingles or other covering for flat roof
- Cover the walls with siding, typically vinyl, wood, or brick veneer but possibly stone or other materials
- Install windows
- Frame interior walls with wooden 2x4s
- Add internal plumbing, HVAC, electrical, and natural gas utilities
- Building inspector visits if necessary to approve utilities and framing
- Install insulation and interior drywall panels (cement board for wet areas) and to complete walls and ceilings
- Install bathroom fixtures
- Spackle, prime, and paint interior walls and ceilings
- Additional tiling on top of cement board for wet areas, such as the bathroom and kitchen backsplash
- Installation of final floor covering, such as floor tile, carpet, or wood flooring
- Installation of major appliances
- Unless the original owners are building the house, at this point it is typically sold or rented.
New construction techniques and sustainability:
The development of efficiency codes has prompted the development of new construction technologies and methods, many pioneered by academic departments of construction management that seek to improve efficiency and performance while reducing construction waste.
New techniques of building construction are being researched, made possible by advances in 3D printing technology. In a form of additive building construction, similar to the additive manufacturing techniques for manufactured parts, building printing is making it possible to flexibly construct small commercial buildings and private habitations in around 20 hours, with built-in plumbing and electrical facilities, in one continuous build, using large 3D printers.
Working versions of 3D-printing building technology are already printing 2 metres (6 ft 7 in) of building material per hour as of January 2013, with the next-generation printers capable of 3.5 metres (11 ft) per hour, sufficient to complete a building in a week.
Dutch architect Janjaap Ruijssenaars's performative architecture 3D-printed building was scheduled to be built in 2014.
As in the last years the construction industry has been seeing a trend towards IT adoption, something it had always found hard to compete when paired against other fields like the manufacturing or healthcare industries, for example.
Nowadays, construction is starting to see the full potential of technological advancements, moving on to paperless construction, using the power of automation and adopting BIM, the internet of things, cloud storage and co-working, and mobile apps, implementation of surveying drones, and more.
In the current trend of sustainable construction, the recent movements of New Urbanism and New Classical Architecture promote a sustainable approach towards construction, that appreciates and develops smart growth, architectural tradition and classical design. This is in contrast to modernist and short-lived globally uniform architecture, as well as opposing solitary housing estates and suburban sprawl. Both trends started in the 1980s.
Wood is being introduced as a realistic material for skyscrapers (nicknamed "plyscrapers") thanks to new developments in super-strong engineered timber, whose collective name is "mass timber" and includes cross-laminated timber.
Processes:
Design Team:
In the industrialized world, construction usually involves the translation of designs into reality. A formal design team may be assembled to plan the physical proceedings, and to integrate those proceedings with the other parts.
The design usually consists of drawings and specifications, usually prepared by a design team including:
- Architect,
- civil engineers,
- mechanical engineers,
- electrical engineers,
- structural engineers,
- fire protection engineers,
- planning consultants,
- architectural consultants,
- and archaeological consultants.
The design team is most commonly employed by (i.e. in contract with) the property owner.
Under this system, once the design is completed by the design team, a number of construction companies or construction management companies may then be asked to make a bid for the work, either based directly on the design, or on the basis of drawings and a bill of quantities provided by a quantity surveyor. Following evaluation of bids, the owner typically awards a contract to the most cost efficient bidder.
The best modern trend in design is toward integration of previously separated specialties, especially among large firms. In the past, architects, interior designers, engineers, developers, construction managers, and general contractors were more likely to be entirely separate companies, even in the larger firms.
Presently, a firm that is nominally an "architecture" or "construction management" firm may have experts from all related fields as employees, or to have an associated company that provides each necessary skill. Thus, each such firm may offer itself as "one-stop shopping" for a construction project, from beginning to end. This is designated as a "design build" contract where the contractor is given a performance specification and must undertake the project from design to construction, while adhering to the performance specifications.
Several project structures can assist the owner in this integration, including design-build, partnering and construction management. In general, each of these project structures allows the owner to integrate the services of architects, interior designers, engineers and constructors throughout design and construction. In response, many companies are growing beyond traditional offerings of design or construction services alone and are placing more emphasis on establishing relationships with other necessary participants through the design-build process.
The increasing complexity of construction projects creates the need for design professionals trained in all phases of the project's life-cycle and develop an appreciation of the building as an advanced technological system requiring close integration of many sub-systems and their individual components, including sustainability. Building engineering is an emerging discipline that attempts to meet this new challenge.
Financial Advisors:
Construction projects can suffer from preventable financial problems:
- Underbids happen when builders ask for too little money to complete the project.
- Cash flow problems exist when the present amount of funding cannot cover the current costs for labor and materials, and because they are a matter of having sufficient funds at a specific time, can arise even when the overall total is enough.
- Fraud is a problem in many fields, but is notoriously prevalent in the construction field.
Financial planning for the project is intended to ensure that a solid plan with adequate safeguards and contingency plans are in place before the project is started and is required to ensure that the plan is properly executed over the life of the project.
Mortgage bankers, accountants, and cost engineers are likely participants in creating an overall plan for the financial management of the building construction project. The presence of the mortgage banker is highly likely, even in relatively small projects since the owner's equity in the property is the most obvious source of funding for a building project.
Accountants act to study the expected monetary flow over the life of the project and to monitor the payouts throughout the process. Cost engineers and estimators apply expertise to relate the work and materials involved to a proper valuation.
Cost overruns with government projects have occurred when the contractor identified change orders or project changes that increased costs, which are not subject to competition from other firms as they have already been eliminated from consideration after the initial bid.
Large projects can involve highly complex financial plans and often start with a conceptual estimate performed by a building estimator.
As portions of a project are completed, they may be sold, supplanting one lender or owner for another, while the logistical requirements of having the right trades and materials available for each stage of the building construction project carries forward. In many English-speaking countries, but not the United States, projects typically use quantity surveyors.
Legal Issues:
Main article: Construction law
A construction project must fit into the legal framework governing the property. These include governmental regulations on the use of property, and obligations that are created in the process of construction.
When applicable, the project must adhere to zoning and building code requirements. Constructing a project that fails to adhere to codes does not benefit the owner. Some legal requirements come from malum in se considerations, or the desire to prevent indisputably bad phenomena, e.g. explosions or bridge collapses.
Other legal requirements come from malum prohibitum considerations, or factors that are a matter of custom or expectation, such as isolating businesses from a business district or residences from a residential district.
An attorney may seek changes or exemptions in the law that governs the land where the building will be built, either by arguing that a rule is inapplicable (the bridge design will not cause a collapse), or that the custom is no longer needed (acceptance of live-work spaces has grown in the community).
A construction project is a complex net of contracts and other legal obligations, each of which all parties must carefully consider. A contract is the exchange of a set of obligations between two or more parties, but it is not so simple a matter as trying to get the other side to agree to as much as possible in exchange for as little as possible.
The time element in construction means that a delay costs money, and in cases of bottlenecks, the delay can be extremely expensive. Thus, the contracts must be designed to ensure that each side is capable of performing the obligations set out. Contracts that set out clear expectations and clear paths to accomplishing those expectations are far more likely to result in the project flowing smoothly, whereas poorly drafted contracts lead to confusion and collapse.
Legal advisors in the beginning of a construction project seek to identify ambiguities and other potential sources of trouble in the contract structure, and to present options for preventing problems. Throughout the process of the project, they work to avoid and resolve conflicts that arise. In each case, the lawyer facilitates an exchange of obligations that matches the reality of the project.
Interaction of Expertise:
Design, finance, and legal aspects overlap and interrelate. The design must be not only structurally sound and appropriate for the use and location, but must also be financially possible to build, and legal to use.
The financial structure must accommodate the need for building the design provided, and must pay amounts that are legally owed. The legal structure must integrate the design into the surrounding legal framework, and enforce the financial consequences of the construction process.
Procurement:
Procurement describes the merging of activities undertaken by the client to obtain a building. There are many different methods of construction procurement; however the three most common types of procurement are traditional (design-bid-build), design-build and management contracting.
There is also a growing number of new forms of procurement that involve relationship contracting where the emphasis is on a co-operative relationship among the principal, the contractor, and other stakeholders within a construction project.
New forms include partnering such as Public-Private Partnering (PPPs) aka private finance initiatives (PFIs) and alliances such as "pure" or "project" alliances and "impure" or "strategic" alliances. The focus on co-operation is to ameliorate the many problems that arise from the often highly competitive and adversarial practices within the construction industry.
Traditional:
Main article: Design–bid–build
This is the most common method of construction procurement and is well established and recognized. In this arrangement, the architect or engineer acts as the project coordinator. His or her role is to design the works, prepare the specifications and produce construction drawings, administer the contract, tender the works, and manage the works from inception to completion.
There are direct contractual links between the architect's client and the main contractor. Any subcontractor has a direct contractual relationship with the main contractor. The procedure continues until the building is ready to occupy.
Design-build:
Main article: Design-build
This approach has become more common in recent years, and also involves the client contracting a single entity that both provides a design and builds it. In some cases, the design-build package can also include finding the site, arranging funding and applying for all necessary statutory consents.
The owner produces a list of requirements for a project, giving an overall view of the project's goals. Several D&B contractors present different ideas about how to accomplish these goals. The owner selects the ideas they like best and hires the appropriate contractor.
Often, it is not just one contractor, but a consortium of several contractors working together. Once these have been hired, they begin building the first phase of the project. As they build phase 1, they design phase 2. This is in contrast to a design-bid-build contract, where the project is completely designed by the owner, then bid on, then completed.
Kent Hansen pointed out that state departments of transportation usually use design build contracts as a way of progressing projects when states lack the skills-resources. In such departments, design build contracts are usually employed for very large projects.
Management procurement systems:
Main article: Construction management
In this arrangement the client plays an active role in the procurement system by entering into separate contracts with the designer (architect or engineer), the construction manager, and individual trade contractors. The client takes on the contractual role, while the construction or project manager provides the active role of managing the separate trade contracts, and ensuring that they complete all work smoothly and effectively together.
Management procurement systems are often used to speed up the procurement processes, allow the client greater flexibility in design variation throughout the contract, give the ability to appoint individual work contractors, separate contractual responsibility on each individual throughout the contract, and to provide greater client control.
In recent time, construction software starts to get traction – as it digitizes construction industry. Among solutions, there are for example: Procore, GenieBelt, PlanGrid, bouw7, etc.
Authority having jurisdiction:
See also: Planning permission
In construction, the authority having jurisdiction (AHJ) is the governmental agency or sub-agency that regulates the construction process. In most cases, this is the municipality where the building is located. However, construction performed for supra-municipal authorities are usually regulated directly by the owning authority, which becomes the AHJ.
Before the foundation can be dug, contractors are typically required to verify and have existing utility lines marked, either by the utilities themselves or through a company specializing in such services. This lessens the likelihood of damage to the existing electrical, water, sewage, phone, and cable facilities, which could cause outages and potentially hazardous situations.
During the construction of a building, the municipal building inspector inspects the building periodically to ensure that the construction adheres to the approved plans and the local building code. Once construction is complete and a final inspection has been passed, an occupancy permit may be issued.
An operating building must remain in compliance with the fire code. The fire code is enforced by the local fire department or a municipal code enforcement office.
Changes made to a building that affect safety, including its use, expansion, structural integrity, and fire protection items, usually require approval of the AHJ for review concerning the building code.
Industry Characteristics:
In the United States, the industry in 2014 has around $960 billion in annual revenue according to statistics tracked by the Census Bureau, of which $680 billion is private (split evenly between residential and nonresidential) and the remainder is government.
In 2005, there were about 667,000 firms employing 1 million contractors (200,000 general contractors, 38,000 heavy, and 432,000 specialty); the average contractor employed fewer than 10 employees. As a whole, the industry employed an estimated 5.8 million in April 2013, with a 13.2% unemployment rate. In the United States, approximately 828,000 women were employed in the construction industry as of 2011.
Careers:
There are many routes to the different careers within the construction industry. These three main tiers are based on educational background and training, which vary by country:
- Unskilled and semi-skilled – General site labor with little or no construction qualifications.
- Skilled – Tradesmen who've served apprenticeships, typically in labor unions, and on-site managers who possess extensive knowledge and experience in their craft or profession.
- Technical and management – Personnel with the greatest educational qualifications, usually graduate degrees, trained to design, manage and instruct the construction process.
Skilled occupations include carpenters, electricians, plumbers, ironworkers, masons, and many other manual crafts, as well as those involved in project management. These qualifications are either obtained directly after the completion of compulsory education or through "on the job" apprenticeship training.
Technical and specialized occupations require more training as a greater technical knowledge is required. These professions also hold more legal responsibility.
A short list of the main careers with an outline of the educational requirements are given below:
- Architect – Typically holds 1, undergraduate 3 year degree in architecture + 1, post-graduate 2 year degree (DipArch or BArch) in architecture plus 24 months experience within the industry. To use the title "architect" the individual must be registered on the Architects Registration Board register of Architects.
- Civil engineer – Typically holds a degree in a related subject. The Chartered Engineer qualification is controlled by the Engineering Council, and is often achieved through membership of the Institution of Civil Engineers. A new university graduate must hold a master's degree to become chartered; persons with bachelor's degrees may become an Incorporated Engineer.
- Building services engineer – Often referred to as an "M&E Engineer" typically holds a degree in mechanical or electrical engineering. Chartered Engineer status is governed by the Engineering Council, mainly through the Chartered Institution of Building Services Engineers.
- Project manager – Typically holds a 4-year or greater higher education qualification, but are often also qualified in another field such as architecture, civil engineering or quantity surveying.
- Structural engineer – Typically holds a bachelor's or master's degree in structural engineering. A P.ENG is required from the Professional Engineers Ontario (Canada). New university graduates must hold a master's degree to gain chartered status from the Engineering Council, mainly through the Institution of Structural Engineers (UK).
- Quantity surveyor – Typically holds a bachelor's degree in quantity surveying. Chartered status is gained from the Royal Institution of Chartered Surveyors.
- Civil estimators are professionals who typically have a background in civil engineering, construction project management, or construction supervision.
In 2010 a salary survey revealed the differences in remuneration between different roles, sectors and locations in the construction and built environment industry. The results showed that areas of particularly strong growth in the construction industry, such as the Middle East, yield higher average salaries than in the UK for example.
The average earning for a professional in the construction industry in the Middle East, across all sectors, job types and levels of experience, is £42,090, compared to £26,719 in the UK.
This trend is not necessarily due to the fact that more affluent roles are available, however, as architects with 14 or more years experience working in the Middle East earn on average £43,389 per annum, compared to £40,000 in the UK. Some construction workers in the US/Canada have made more than $100,000 annually, depending on their trade.
Safety:
See also: Construction site safety
Construction is one of the most dangerous occupations in the world, incurring more occupational fatalities than any other sector in both the United States and in the European Union.
In 2009, the fatal occupational injury rate among construction workers in the United States was nearly three times that for all workers, with Falls being one of the most common causes of fatal and non-fatal injuries among construction workers.
Proper safety equipment such as harnesses, hard hats and guardrails and procedures such as securing ladders and inspecting scaffolding can curtail the risk of occupational injuries in the construction industry.
Other major causes of fatalities in the construction industry include electrocution, transportation accidents, and trench cave-ins.
Other safety risks for workers in construction include hearing loss due to high noise exposure, musculoskeletal injury, chemical exposure, and high levels of stress.
Construction has been identified by the National Institute for Occupational Safety and Health (NIOSH) as a priority industry sector in the National Occupational Research Agenda (NORA) to identify and provide intervention strategies regarding occupational health and safety issues
Click on any of the following blue hyperlinks for more about Construction:
- History
- Construction output by country
- See also:
Amazon (Company)
YouTube Video: Meet the robots making Amazon even faster (C/Net)
Pictured: (L) Amazon’s Brick-and-Mortar Store and How It Will Impact Your Local Business; (R) Amazon's crazy jobs fair reveals 2 ways it's the most powerful company in America
Amazon.com, Inc., doing business as Amazon, is an American electronic commerce and cloud computing company based in Seattle, Washington that was founded by Jeff Bezos on July 5, 1994. The tech giant is the largest Internet retailer in the world measured by revenue and market capitalization, and second largest after Alibaba Group in terms of total sales.
The amazon.com website started as an online bookstore and later diversified to sell the following:
The company also produces consumer electronics--Kindle e-readers, Fire tablets, Fire TV, and Echo—and is the world's largest provider of cloud infrastructure services (IaaS and PaaS). Amazon also sells certain low-end products like USB cables under its in-house brand AmazonBasics.
Amazon has separate retail websites for the United States, the United Kingdom and Ireland, France, Canada, Germany, Italy, Spain, Netherlands, Australia, Brazil, Japan, China, India, and Mexico. In 2016, Dutch, Polish, and Turkish language versions of the German Amazon website were also launched. Amazon also offers international shipping to certain other countries for some of its products.
In 2015, Amazon surpassed Walmart as the most valuable retailer in the United States by market capitalization. Amazon is the fourth most valuable public company in the world, the largest Internet company by revenue in the world, and the eighth largest employer in the United States.
In 2017, Amazon acquired Whole Foods Market for $13.4 billion, which vastly increased Amazon's presence as a physical retailer. The acquisition was interpreted by some as a direct attempt to challenge Walmart and their brick-and-mortar stores.
Amazon's Technology:
Amazon runs data centers for its online services and owns generators or purchases electricity corresponding to its consumption, mostly renewable energy.
The US Navy has stated that its Relocatable Radar remains operable regardless of an Amazon wind farm.
The company also records data on customer buyer behavior which enables them to offer or recommend to an individual specific item or bundles of items based upon preferences demonstrated through purchases or items visited.
On January 31, 2013, Amazon experienced an outage that lasted approximately 49 minutes, leaving its site inaccessible to some customers.
On May 5, 2014, Amazon unveiled a partnership with Twitter. Twitter users can link their accounts to an Amazon account and automatically add items to their shopping carts by responding to any tweet with an Amazon product link bearing the hashtag #AmazonCart.
This allows customers to never leave their Twitter feed and the product is waiting for them when they go to the Amazon website.
Click on any of the following blue hyperlinks for more information about Amazon:
The amazon.com website started as an online bookstore and later diversified to sell the following:
- video downloads/streaming,
- MP3 downloads/streaming,
- audiobook downloads/streaming,
- software, video games,
- electronics, apparel, furniture, food, toys, and jewelry.
The company also produces consumer electronics--Kindle e-readers, Fire tablets, Fire TV, and Echo—and is the world's largest provider of cloud infrastructure services (IaaS and PaaS). Amazon also sells certain low-end products like USB cables under its in-house brand AmazonBasics.
Amazon has separate retail websites for the United States, the United Kingdom and Ireland, France, Canada, Germany, Italy, Spain, Netherlands, Australia, Brazil, Japan, China, India, and Mexico. In 2016, Dutch, Polish, and Turkish language versions of the German Amazon website were also launched. Amazon also offers international shipping to certain other countries for some of its products.
In 2015, Amazon surpassed Walmart as the most valuable retailer in the United States by market capitalization. Amazon is the fourth most valuable public company in the world, the largest Internet company by revenue in the world, and the eighth largest employer in the United States.
In 2017, Amazon acquired Whole Foods Market for $13.4 billion, which vastly increased Amazon's presence as a physical retailer. The acquisition was interpreted by some as a direct attempt to challenge Walmart and their brick-and-mortar stores.
Amazon's Technology:
Amazon runs data centers for its online services and owns generators or purchases electricity corresponding to its consumption, mostly renewable energy.
The US Navy has stated that its Relocatable Radar remains operable regardless of an Amazon wind farm.
The company also records data on customer buyer behavior which enables them to offer or recommend to an individual specific item or bundles of items based upon preferences demonstrated through purchases or items visited.
On January 31, 2013, Amazon experienced an outage that lasted approximately 49 minutes, leaving its site inaccessible to some customers.
On May 5, 2014, Amazon unveiled a partnership with Twitter. Twitter users can link their accounts to an Amazon account and automatically add items to their shopping carts by responding to any tweet with an Amazon product link bearing the hashtag #AmazonCart.
This allows customers to never leave their Twitter feed and the product is waiting for them when they go to the Amazon website.
Click on any of the following blue hyperlinks for more information about Amazon:
- History
- Board of directors
- Merchant partnerships
- Products and services
- Subsidiaries
- Website
- Amazon sales rank
- Multi-level sales strategy
- Revenue
- Controversies
- Lobbying
- Notable businesses founded by former employees
- See also:
- Amazon Breakthrough Novel Award
- Amazon Flexible Payments Service
- Amazon Marketplace
- Amazon Standard Identification Number (ASIN)
- List of book distributors
- Statistically improbable phrases – Amazon.com's phrase extraction technique for indexing books
- Official website
- Amazon (company) companies grouped at OpenCorporates
- Business data for Amazon.com, Inc.:
Michael Bloomberg, including his company Bloomberg L.P.
YouTube Video by Michael Bloomberg: Let's Take Climate Change Into Our Own Hands*
* on the Late Show with Stephen Colbert
Pictured: (L) Michael Bloomberg; and (R) the Bloomberg Tower on Lexington Avenue in Midtown Manhattan
Michael Rubens Bloomberg (born February 14, 1942) is an American businessman, author, politician, and philanthropist. His net worth is estimated at $47.8 billion, as of October 2017, ranking him as the 8th richest person in the United States and the 10th richest person in the world. He has joined The Giving Pledge, whereby billionaires pledge to give away at least half of their wealth.
Bloomberg is the founder, CEO, and owner of Bloomberg L.P., a global financial services, mass media, and software company that bears his name, and is notable for its Bloomberg Terminal, a computer software system providing financial data widely used in the global financial services industry.
Bloomberg began his career at the securities brokerage Salomon Brothers, before forming his own company in 1981 and spending the next twenty years as its chairman and CEO. Bloomberg also served as chairman of the board of trustees at his alma mater, Johns Hopkins University, from 1996 to 2002.
Bloomberg served as the 108th Mayor of New York City, holding office for three consecutive terms, beginning with his first election in 2001. A Democrat before seeking elective office, Bloomberg switched his party registration in 2001 to run for mayor as a Republican. He defeated opponent Mark Green in a close election held just weeks after the September 11 terrorist attacks. He won a second term in 2005, and left the Republican Party two years later.
Bloomberg campaigned to change the city's term limits law, and was elected to his third term in 2009 as an Independent candidate on the Republican ballot line.
Bloomberg was frequently mentioned as a possible candidate for the U.S. Presidential elections in 2008, and 2012, as well as for Governor of New York in 2010. He declined to seek either office, opting to continue serving as the Mayor of New York City.
On January 1, 2014, Bill de Blasio succeeded Bloomberg as the Mayor of New York City. After a brief stint as a full-time philanthropist, Bloomberg re-assumed the position of CEO at Bloomberg L.P. by the end of 2014. On March 7, 2016, Bloomberg announced that he would not run as a third party candidate in the 2016 U.S. presidential election despite widespread speculation that he would, and later endorsed Democratic nominee Hillary Clinton for president.
Click on any of the following blue hyperlinks for more about Michael Bloomberg:
Bloomberg L.P.
Bloomberg L.P. is a privately held financial software, data, and media company headquartered in Midtown Manhattan, New York City. Bloomberg L.P. was founded by Michael Bloomberg in 1981 with the help of Thomas Secunda, Duncan MacMillan, Charles Zegar, and a 30% ownership investment by Merrill Lynch.
Bloomberg L.P. provides financial software tools such as an analytics and equity trading platform, data services, and news to financial companies and organizations through the Bloomberg Terminal (via its Bloomberg Professional Service), its core revenue-generating product.
Bloomberg L.P. also includes the following:
In 2014, Bloomberg L.P. launched Bloomberg Politics, a multiplatform media property that merged the company's political news teams, and has recruited two veteran political journalists, Mark Halperin and John Heilemann, to run it.
Click on any of the following blue hyperlinks for more about Bloomberg L.P.:
Bloomberg is the founder, CEO, and owner of Bloomberg L.P., a global financial services, mass media, and software company that bears his name, and is notable for its Bloomberg Terminal, a computer software system providing financial data widely used in the global financial services industry.
Bloomberg began his career at the securities brokerage Salomon Brothers, before forming his own company in 1981 and spending the next twenty years as its chairman and CEO. Bloomberg also served as chairman of the board of trustees at his alma mater, Johns Hopkins University, from 1996 to 2002.
Bloomberg served as the 108th Mayor of New York City, holding office for three consecutive terms, beginning with his first election in 2001. A Democrat before seeking elective office, Bloomberg switched his party registration in 2001 to run for mayor as a Republican. He defeated opponent Mark Green in a close election held just weeks after the September 11 terrorist attacks. He won a second term in 2005, and left the Republican Party two years later.
Bloomberg campaigned to change the city's term limits law, and was elected to his third term in 2009 as an Independent candidate on the Republican ballot line.
Bloomberg was frequently mentioned as a possible candidate for the U.S. Presidential elections in 2008, and 2012, as well as for Governor of New York in 2010. He declined to seek either office, opting to continue serving as the Mayor of New York City.
On January 1, 2014, Bill de Blasio succeeded Bloomberg as the Mayor of New York City. After a brief stint as a full-time philanthropist, Bloomberg re-assumed the position of CEO at Bloomberg L.P. by the end of 2014. On March 7, 2016, Bloomberg announced that he would not run as a third party candidate in the 2016 U.S. presidential election despite widespread speculation that he would, and later endorsed Democratic nominee Hillary Clinton for president.
Click on any of the following blue hyperlinks for more about Michael Bloomberg:
- Early life
- Business career
- Wealth
- Political career
- Philanthropy
- Environmental advocacy
Leadership
Other causes
- Environmental advocacy
- Personal life
- Awards and honors
- See also:
- List of philanthropists
- List of richest American politicians
- Stop Trump movement
- Timeline of New York City, 2000s–2010s
- Official website
- Profile at Bloomberg Businessweek
- #23 Michael Bloomberg at Forbes list of 2010 world's billionaires
- Appearances on C-SPAN
- Michael Bloomberg on IMDb
Bloomberg L.P.
Bloomberg L.P. is a privately held financial software, data, and media company headquartered in Midtown Manhattan, New York City. Bloomberg L.P. was founded by Michael Bloomberg in 1981 with the help of Thomas Secunda, Duncan MacMillan, Charles Zegar, and a 30% ownership investment by Merrill Lynch.
Bloomberg L.P. provides financial software tools such as an analytics and equity trading platform, data services, and news to financial companies and organizations through the Bloomberg Terminal (via its Bloomberg Professional Service), its core revenue-generating product.
Bloomberg L.P. also includes the following:
- a wire service (Bloomberg News),
- a global television network (Bloomberg Television),
- digital websites,
- a radio station (WBBR),
- subscription-only newsletters,
- and three magazines: Bloomberg Businessweek, Bloomberg Markets, and Bloomberg Pursuits.
In 2014, Bloomberg L.P. launched Bloomberg Politics, a multiplatform media property that merged the company's political news teams, and has recruited two veteran political journalists, Mark Halperin and John Heilemann, to run it.
Click on any of the following blue hyperlinks for more about Bloomberg L.P.:
- History
- Acquisitions
- Products and services
- Offices
- Litigation
- See also:
- A. M. Best
- Bloomberg Markets
- Bloomberg Terminal
- Dominion Bond Rating Service
- Financial data vendor
- Fitch Ratings
- Markit Group
- Official website
- Bloomberg: Overview
- PND News – New York City Mayor Gave $130 Million to Charity in 2002
- Bloomberg LP v. Triple E Holdings Limited (2002) GENDND 1665 (December 13, 2002)
- Fortune Magazine: Bloomberg LP is a prodigious success
- Vanity Fair: Bloomberg Without Bloomberg
Walmart, the World's Largest Company! (and including a List of Walmart Brands) (Walmart.com)
- YouTube Video about the Walmart Business Model: An American Success Story
- YouTube Video: Walmart's Supply Chain
- YouTube Video: Walmart CEO Doug McMillon Encourages Shoppers To ‘Buy Week To Week’ | TODAY
Walmart Inc. is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores.
Headquartered in Bentonville, Arkansas, the company was founded by Sam Walton in 1962 and incorporated on October 31, 1969. It also owns and operates Sam's Club retail warehouses.
As of January 31, 2018, Walmart has 11,718 stores and clubs in 28 countries, operating under 59 different names. The company operates under the name Walmart in the United States and Canada, as Walmart de México y Centroamérica in Mexico and Central America, as Asda in the United Kingdom, as the Seiyu Group in Japan, and as Best Price in India. It has wholly owned operations in Argentina, Chile, Brazil, and Canada.
Walmart is the world's largest company by revenue – approximately US$480 billion according to Fortune Global 500 list in 2016 – as well as the largest private employer in the world with 2.3 million employees. It is a publicly traded family-owned business, as the company is controlled by the Walton family.
Sam Walton's heirs own over 50 percent of Walmart through their holding company, Walton Enterprises, and through their individual holdings. Walmart was the largest U.S. grocery retailer in 2016, and 62.3 percent of Walmart's US$478.614 billion sales came from U.S. operations.
The company debuted on the New York Stock Exchange in 1972. By 1988, Walmart was the most profitable retailer in the U.S., and by October 1989, it had become the largest in terms of revenue.
Originally geographically limited to the South and lower Midwest, by the early 1990s, the company had stores from coast to coast: Sam's Club opened in New Jersey in November 1989 and the first California outlet opened in Lancaster in July 1990.
A Walmart in York, Pennsylvania opened in October 1990: the first main store in the Northeast.
Walmart's investments outside North America have seen mixed results: its operations in the United Kingdom, South America, and China are highly successful, whereas ventures in Germany and South Korea failed.
Click on any of the following blue hyperlinks for more about Walmart:
List of Walmart Brands:
Walmart, Inc., like many large retail and grocery chain stores, offers private brands (also called house brands, generic brands, or store brands), which are lower-priced alternatives to name brand products. Many products offered under Walmart brands are private label products, but in other cases, the production volume is enough for Walmart to operate an entire factory.
Click on any of the following blue hyperlinks for more about that item: ___________________________________________________________________________
Ownership: The Walton Family
The Walton family is an American family whose collective fortune makes them the richest family in the United States of America and the richest family in the world.
Overview:
The three most prominent living members (Jim, Rob, and Alice Walton) have consistently been in the top twenty of the Forbes 400 list since 2001, as were John (d. 2005) and Helen (d. 2007) prior to their deaths.
Christy Walton took her husband John's place in the ranking after his death. The majority of the family's wealth derives from the heritage of Bud and Sam Walton, who were the co-founders of Walmart.
Walmart is the world's largest retailer, one of the world's largest business enterprises in terms of annual revenue, and, with just over 2.2 million employees, the world's largest private employer.
As of December 2014, the Waltons collectively owned 50.8 percent of Walmart. In 2018, the family sold some of their company's stock and now owns just under 50%. In July 2020, the annual Sunday Times Rich List reported that the Walton family's net worth was $US215 billion.
Walton Family Foundation:
In 1987, Sam Walton endowed a charitable foundation. The Walton Family Foundation was primarily focused on charter schools, but it later extended its program to include environmental issues, particularly those related to water.
In 2016, Alice and Jim Walton put a $250 million grant towards building charter school facilities. The Walton Family Foundation created the Building Equity Initiative to provide charter schools with access to capital to create and expand their facilities.
This initiative was established after the foundation announced in 2016 that it would spend $1 billion over the next five years to expand "educational opportunity" by partnering with charter school operators, researchers, and education reformers.
Walton family fortune:
The Walton family fortune is broken down as such:
Click here for a chart of the Family Tree.
Headquartered in Bentonville, Arkansas, the company was founded by Sam Walton in 1962 and incorporated on October 31, 1969. It also owns and operates Sam's Club retail warehouses.
As of January 31, 2018, Walmart has 11,718 stores and clubs in 28 countries, operating under 59 different names. The company operates under the name Walmart in the United States and Canada, as Walmart de México y Centroamérica in Mexico and Central America, as Asda in the United Kingdom, as the Seiyu Group in Japan, and as Best Price in India. It has wholly owned operations in Argentina, Chile, Brazil, and Canada.
Walmart is the world's largest company by revenue – approximately US$480 billion according to Fortune Global 500 list in 2016 – as well as the largest private employer in the world with 2.3 million employees. It is a publicly traded family-owned business, as the company is controlled by the Walton family.
Sam Walton's heirs own over 50 percent of Walmart through their holding company, Walton Enterprises, and through their individual holdings. Walmart was the largest U.S. grocery retailer in 2016, and 62.3 percent of Walmart's US$478.614 billion sales came from U.S. operations.
The company debuted on the New York Stock Exchange in 1972. By 1988, Walmart was the most profitable retailer in the U.S., and by October 1989, it had become the largest in terms of revenue.
Originally geographically limited to the South and lower Midwest, by the early 1990s, the company had stores from coast to coast: Sam's Club opened in New Jersey in November 1989 and the first California outlet opened in Lancaster in July 1990.
A Walmart in York, Pennsylvania opened in October 1990: the first main store in the Northeast.
Walmart's investments outside North America have seen mixed results: its operations in the United Kingdom, South America, and China are highly successful, whereas ventures in Germany and South Korea failed.
Click on any of the following blue hyperlinks for more about Walmart:
- History
- Operating divisions
- Subsidiaries
- Corporate affairs
- Finance and governance
- Ownership (see next topic)
- Competition
- Customer base
- Technology
- Charity
- Economic impact
- Labor relations
- Animal welfare
- Criticism and controversies
- See also:
- Arkansas portal
- Business and economics portal
- Companies portal
- United States portal
- Big-box store
- Criticism of Walmart
- "Something Wall-Mart This Way Comes" – a 2004 episode of Comedy Central's South Park
- Wal-Mart camel – a bone fossil of a prehistoric camel found at a future Wal-Mart store in Mesa, Arizona
- Wal-Mart First Tee Open at Pebble Beach – former name of a golf tournament
- Wal-Mart: The High Cost of Low Price – a 2005 documentary film by director Robert Greenwald
- Walmarting – a neologism
- Why Wal-Mart Works; and Why That Drives Some People C-R-A-Z-Y – a 2005 rebuttal to the Greenwald documentary
- Official website
- Wal-Mart Stores Corporate Site
- Business data for Wal-Mart Stores, Inc.:
- SEC filings
- Walmart companies grouped at OpenCorporates
List of Walmart Brands:
Walmart, Inc., like many large retail and grocery chain stores, offers private brands (also called house brands, generic brands, or store brands), which are lower-priced alternatives to name brand products. Many products offered under Walmart brands are private label products, but in other cases, the production volume is enough for Walmart to operate an entire factory.
Click on any of the following blue hyperlinks for more about that item: ___________________________________________________________________________
Ownership: The Walton Family
The Walton family is an American family whose collective fortune makes them the richest family in the United States of America and the richest family in the world.
Overview:
The three most prominent living members (Jim, Rob, and Alice Walton) have consistently been in the top twenty of the Forbes 400 list since 2001, as were John (d. 2005) and Helen (d. 2007) prior to their deaths.
Christy Walton took her husband John's place in the ranking after his death. The majority of the family's wealth derives from the heritage of Bud and Sam Walton, who were the co-founders of Walmart.
Walmart is the world's largest retailer, one of the world's largest business enterprises in terms of annual revenue, and, with just over 2.2 million employees, the world's largest private employer.
As of December 2014, the Waltons collectively owned 50.8 percent of Walmart. In 2018, the family sold some of their company's stock and now owns just under 50%. In July 2020, the annual Sunday Times Rich List reported that the Walton family's net worth was $US215 billion.
Walton Family Foundation:
In 1987, Sam Walton endowed a charitable foundation. The Walton Family Foundation was primarily focused on charter schools, but it later extended its program to include environmental issues, particularly those related to water.
In 2016, Alice and Jim Walton put a $250 million grant towards building charter school facilities. The Walton Family Foundation created the Building Equity Initiative to provide charter schools with access to capital to create and expand their facilities.
This initiative was established after the foundation announced in 2016 that it would spend $1 billion over the next five years to expand "educational opportunity" by partnering with charter school operators, researchers, and education reformers.
Walton family fortune:
The Walton family fortune is broken down as such:
- Alice Walton, $70.4 billion
- Jim Walton, $70.1 billion
- S. Robson Walton, $69.8 billion
- Lukas Walton, $17.7 billion
- Ann Walton Kroenke, $9.4 billion
- Nancy Walton Laurie, $8.5 billion
- Christy Walton, $8.1 billion
Click here for a chart of the Family Tree.
Alphabet, Inc. (Google Parent Company)
YouTube Video: How did Google Get So Big? (60 Minutes 5/21/18)
Pictured below: Organizational Chart of parent company Alphabet, Inc., along with its subsidiaries
The below links provide critical viewpoints about Google:
Alphabet Inc. is an American multinational conglomerate headquartered in Mountain View, California. It was created through a corporate restructuring of Google on October 2, 2015 and became the parent company of Google and several former Google subsidiaries.
The two founders of Google assumed executive roles in the new company, with Larry Page serving as CEO and Sergey Brin as President. It has 80,110 employees (as of December 2017).
Alphabet's portfolio encompasses several industries, including technology, life sciences, investment capital, and research. Some of its subsidiaries include:
Some of the subsidiaries of Alphabet have altered their names since leaving Google and becoming part of the new parent company:
Following the restructuring, Page became CEO of Alphabet and Sundar Pichai took his position as CEO of Google. Shares of Google's stock have been converted into Alphabet stock, which trade under Google's former ticker symbols of "GOOG" and "GOOGL".
The establishment of Alphabet was prompted by a desire to make the core Google Internet services business "cleaner and more accountable" while allowing greater autonomy to group companies that operate in businesses other than Internet services.
Click on any of the following blue hyperlinks to learn more about Alphabet, Inc.:
- Click here: How Did Google Get So Big? (60 Minutes 5/21/18: see above YouTube).
- Click here: Google Tries Being Slightly Less Evil. (Vanity Fair 6/8/18)
Alphabet Inc. is an American multinational conglomerate headquartered in Mountain View, California. It was created through a corporate restructuring of Google on October 2, 2015 and became the parent company of Google and several former Google subsidiaries.
The two founders of Google assumed executive roles in the new company, with Larry Page serving as CEO and Sergey Brin as President. It has 80,110 employees (as of December 2017).
Alphabet's portfolio encompasses several industries, including technology, life sciences, investment capital, and research. Some of its subsidiaries include:
Some of the subsidiaries of Alphabet have altered their names since leaving Google and becoming part of the new parent company:
Following the restructuring, Page became CEO of Alphabet and Sundar Pichai took his position as CEO of Google. Shares of Google's stock have been converted into Alphabet stock, which trade under Google's former ticker symbols of "GOOG" and "GOOGL".
The establishment of Alphabet was prompted by a desire to make the core Google Internet services business "cleaner and more accountable" while allowing greater autonomy to group companies that operate in businesses other than Internet services.
Click on any of the following blue hyperlinks to learn more about Alphabet, Inc.:
- History
- Website
- Structure
- Proposed growth
- Restructuring process
- Lawsuit
- Investments and acquisitions
- See also:
- Official website
- Business data for Alphabet Inc: Google Finance
- Yahoo! Finance
- Reuters
- SEC filings
Business Administration
- YouTube Video: The single biggest reason why start-ups succeed | Bill Gross TED
- YouTube Video: Top Paying Jobs for Business Degrees
Business administration includes all aspects of overseeing and supervising business operations, as well as related fields which include accounting, finance, project management and marketing.
The administration of a business includes the performance or management of business operations and decision making, as well as the efficient organization of people and other resources, to direct activities towards common goals and objectives.
In general, administration refers to the broader management function, including the associated finance, personnel and MIS services.
Administration can refer to the bureaucratic or operational performance of routine office tasks, usually internally oriented and reactive rather than proactive.
Administrators, broadly speaking, engage in a common set of functions to meet the organization's goals. Henri Fayol described these "functions" of the administrator as "the five elements of administration". Sometimes creating output, which includes all of the processes that generate the product that the business sells, is added as a sixth element.
Alternatively, some analyses view management as a subset of administration, specifically associated with the technical and operational aspects of an organization, and distinct from executive or strategic functions.
Academic Degrees:
Bachelor of Business Administration:
Main article: Bachelor of Business Administration
The Bachelor of Business Administration (BBA, B.B.A., B.Sc.) is a bachelor's degree in commerce and business administration. The degree is designed to give a broad knowledge of the functional aspects of a company and their interconnection, while also allowing for specialization in a particular area.
The degree also develops the student's practical, managerial and communication skills, and business decision-making capability. Many programs incorporate training and practical experience, in the form of case projects, presentations, internships, industrial visits, and interaction with experts from industry.
Master of Business Administration:
Main article: Master of Business Administration
The Master of Business Administration (MBA, M.B.A.) is a master's degree in business administration with a significant focus on management. The MBA degree originated in the United States in the early 20th century when the country industrialized and companies sought scientific approaches to management. The core courses in an MBA program cover various areas of business such as accounting, finance, marketing, human resources, and operations in a manner most relevant to management analysis and strategy. Most programs also include elective courses.
Doctor of Business Administration:
Main article: Doctor of Business Administration
The Doctor of Business Administration (abbreviated DBA, D.B.A., DrBA, or Dr.B.A.) is a research doctorate awarded on the basis of advanced study and research in the field of business administration. The D.B.A. is a terminal degree in business administration, and is equivalent to the Ph.D in Business Administration.
PhD in Management:
Main article: PhD in Management
The PhD in Management is the highest academic degree awarded in the study of management. The degree was designed for those seeking academic research and teaching careers as faculty or professors in the study of management at business schools worldwide.
Doctor of Management:
Main article: Doctor of Management
A newer form of a management doctorate is the Doctor of Management (D.M., D.Mgt. or DMan). It is a doctoral degree conferred upon an individual who is trained through advanced study and research in the applied science and practice of professional management.
This doctorate has elements of both research and practice relative to social and managerial concerns within society and organizations.
See also:
The administration of a business includes the performance or management of business operations and decision making, as well as the efficient organization of people and other resources, to direct activities towards common goals and objectives.
In general, administration refers to the broader management function, including the associated finance, personnel and MIS services.
Administration can refer to the bureaucratic or operational performance of routine office tasks, usually internally oriented and reactive rather than proactive.
Administrators, broadly speaking, engage in a common set of functions to meet the organization's goals. Henri Fayol described these "functions" of the administrator as "the five elements of administration". Sometimes creating output, which includes all of the processes that generate the product that the business sells, is added as a sixth element.
Alternatively, some analyses view management as a subset of administration, specifically associated with the technical and operational aspects of an organization, and distinct from executive or strategic functions.
Academic Degrees:
Bachelor of Business Administration:
Main article: Bachelor of Business Administration
The Bachelor of Business Administration (BBA, B.B.A., B.Sc.) is a bachelor's degree in commerce and business administration. The degree is designed to give a broad knowledge of the functional aspects of a company and their interconnection, while also allowing for specialization in a particular area.
The degree also develops the student's practical, managerial and communication skills, and business decision-making capability. Many programs incorporate training and practical experience, in the form of case projects, presentations, internships, industrial visits, and interaction with experts from industry.
Master of Business Administration:
Main article: Master of Business Administration
The Master of Business Administration (MBA, M.B.A.) is a master's degree in business administration with a significant focus on management. The MBA degree originated in the United States in the early 20th century when the country industrialized and companies sought scientific approaches to management. The core courses in an MBA program cover various areas of business such as accounting, finance, marketing, human resources, and operations in a manner most relevant to management analysis and strategy. Most programs also include elective courses.
Doctor of Business Administration:
Main article: Doctor of Business Administration
The Doctor of Business Administration (abbreviated DBA, D.B.A., DrBA, or Dr.B.A.) is a research doctorate awarded on the basis of advanced study and research in the field of business administration. The D.B.A. is a terminal degree in business administration, and is equivalent to the Ph.D in Business Administration.
PhD in Management:
Main article: PhD in Management
The PhD in Management is the highest academic degree awarded in the study of management. The degree was designed for those seeking academic research and teaching careers as faculty or professors in the study of management at business schools worldwide.
Doctor of Management:
Main article: Doctor of Management
A newer form of a management doctorate is the Doctor of Management (D.M., D.Mgt. or DMan). It is a doctoral degree conferred upon an individual who is trained through advanced study and research in the applied science and practice of professional management.
This doctorate has elements of both research and practice relative to social and managerial concerns within society and organizations.
See also:
Family Business
- YouTube Video: How BIG is Walmart? (2.2 million employees!)
- YouTube Video: Biography of William Randolph Hearst
- YouTube Video: Inside S.C. Johnson
A family business is a commercial organization in which decision-making is influenced by multiple generations of a family, related by blood or marriage or adoption, who has both the ability to influence the vision of the business and the willingness to use this ability to pursue distinctive goals.
They are closely identified with the firm through leadership or ownership. Owner-manager entrepreneurial firms are not considered to be family businesses because they lack the multi-generational dimension and family influence that create the unique dynamics and relationships of family businesses.
Family business is the oldest and most common model of economic organization. The vast majority of businesses throughout the world—from corner shops to multinational publicly listed organizations with hundreds of thousands of employees—can be considered family businesses.
Based on research of the Forbes 400 richest Americans, 44% of the Forbes 400 member fortunes were derived by being a member of or in association with a family business.
The economic prevalence and importance of this kind of business are often underestimated. Throughout most of the 20th century, academics and economists were intrigued by a newer, “improved” model: large publicly traded companies run in an apparently rational, bureaucratic manner by well trained “organization men.” Entrepreneurial and family firms, with their specific management models and complicated psychological processes, often fell short by comparison.
Privately owned or family-controlled enterprises are not always easy to study. In many cases, they are not subject to financial reporting requirements, and little information is made public about financial performance. Ownership may be distributed through trusts or holding companies, and family members themselves may not be fully informed about the ownership structure of their enterprise.
However, as the 21st-century global economic model replaces the old industrial model, government policy makers, economists, and academics turn to entrepreneurial and family enterprises as a prime source of wealth creation and employment.
In some countries, many of the largest publicly listed firms are family-owned. A firm is said to be family-owned if a person is the controlling shareholder; that is, a person (rather than a state, corporation, management trust, or mutual fund) can garner enough shares to assure at least 20% of the voting rights and the highest percentage of voting rights in comparison to other shareholders.
Some of the world's largest family-run businesses are Walmart (United States), Samsung Group (Korea) and Tata Group (India).
The "Global Family Business Index" comprises the largest 500 family firms around the globe. In this index—published for a first time in 2015 by Center for Family Business University of St. Gallen and EY—for a privately held firm, a firm is classified as a family firm in case a family controls more than 50% of the voting rights. For a publicly listed firm, a firm is classified as a family firm in case the family holds at least 32% of the voting rights.
Family owned businesses account for over 30% of companies with sales over $1 billion.
In a family business, two or more members within the management team are drawn from the owning family. Family businesses can have owners who are not family members. Family businesses may also be managed by individuals who are not members of the family.
However, family members are often involved in the operations of their family business in some capacity and, in smaller companies, usually one or more family members are the senior officers and managers. In India, many businesses that are now public companies were once family businesses.
Family participation as managers and/or owners of a business can strengthen the company because family members are often loyal and dedicated to the family enterprise. However, family participation as managers and/or owners of a business can present unique problems because the dynamics of the family system and the dynamics of the business systems are often not in balance.
Problems:
The interests of a family member may not be aligned with the interest of the business. For example, if a family member wants to be president but is not as competent as a non-family member, the personal interest of the family member and the well being of the business may be in conflict.
The interests of the entire family may not be balanced with the interests of their business. For example, if a family needs its business to distribute funds for living expenses and retirement but the business requires those to stay competitive, the interests of the entire family and the business are not aligned.
Finally, the interest of one family member may not be aligned with another family member.
For example, a family member who is an owner may want to sell the business to maximize their return, but a family member who is an owner and also a manager may want to keep the company because it represents their career and they want their children to have the opportunity to work in the company.
The three circles model:
The challenge for business families is that family, ownership and business roles involve different and sometimes conflicting values, goals, and actions. For example, family members put a high priority on emotional capital—the family success that unites them through consecutive generations.
Executives in the business are concerned about strategy and social capital—the reputation of their firm in the marketplace. Owners are interested in financial capital—performance in terms of wealth creation.
A three-circles model is often used to show the three principal roles in a family-owned or -controlled organization: Family, Ownership and Management. This model shows how the roles may overlap.
Everyone in the family (in all generations) obviously belongs to the Family circle, but some family members will never own shares in the family business, or ever work there. A family member is concerned with social capital (reputation within the community), dividends, and family unity.
The Ownership circle may include family members, investors and/or employee-owners. An owner is concerned with financial capital (business performance and dividends). The Management circle typically includes non-family members who are employed by the family business.
Family members may also be employees. An employee is concerned with social capital (reputation), emotional capital (career opportunities, bonuses and fair performance measures).
A few people—for example, the founder or a senior family member—may hold all three roles: family member, owner and employee. These individuals are intensely connected to the family business, and concerned with any or all of the above sources of value creation.
The genogram:
A genogram is an organization chart for the family. It is an enhanced family tree that shows not only family events like births and deaths, but also indicates the relationships (close, conflicted, cut-off, etc.) among individuals in the family. It is a useful tool for spotting relationship patterns across generations, and decrypting seemingly irrational behavior.
Family myths—sets of beliefs that are shared by the family members—can play important defensive and protective roles in families. Myths help people cope with stress and anxiety and, by prescribing ritualistic behavior patterns, will enable them to establish a common front against the outside world.
They provide a rationale for the way people behave, but because much of what makes up a family myth takes place deep beneath the surface, they also conceal the true issues, problems, and conflicts. Although these family myths can turn into a blueprint for family action, they can also turn into straitjackets, reducing a family's flexibility and capacity to respond to new situations. (See also: Family nexus.)
Parallel planning processes:
All businesses require planning, but business families face the additional planning task of balancing family and business demands. There are five critical issues where the needs of the family and the demands of the business overlap—and require parallel planning action to ensure that business success does not create a family or business disaster:
Fair Process:
Fairness is a fundamental issue in family business decision-making. Solutions that are perceived as fair by the family and business stakeholders are more likely to be accepted and supported. Fair process helps create organizational justice by engaging family members, whether as owners and employees, in a series of practical steps to address and resolve critical issues. Fair process lays a foundation for continued family participation over generations.
Emotional dimension:
The challenge faced by family businesses and their stakeholders, is to recognise the issues that they face, understand how to develop strategies to address them and more importantly, to create narratives, or family stories that explain the emotional dimension of the issues to the family.
The most intractable family business issues are not the business problems the organisation faces, but the emotional issues that compound them. Many years of achievement through generations can be destroyed by the next, if the family fails to address the psychological issues they face.
Applying psychodynamic concepts will help to explain behaviour and will enable the family to prepare for life cycle transitions and other issues that may arise. Family-run organisations need a new understanding and a broader perspective on the human dynamics of family firms with two complementary frameworks, psychodynamic and family systematic.
Structuring:
When the family business is basically owned and operated by one person, that person usually does the necessary balancing automatically. For example, the founder may decide the business needs to build a new plant and take less money out of the business for a period so the business can accumulate cash needed to expand.
In making this decision, the founder is balancing his personal interests (taking cash out) with the needs of the business (expansion).
Most first generation owner/managers make the majority of the decisions. When the second generation (sibling partnership) is in control, the decision making becomes more consultative. When the larger third generation (cousin consortium) is in control, the decision making becomes more consensual, the family members often take a vote. In this manner, the decision making throughout generations becomes more rational.
The assets that are owned by the family, in most family businesses, are hard to separate from the assets that belong to the business.
Scenarios:
Balancing competing interests often become difficult in three situations:
The first situation is when the founder wants to change the nature of their involvement in the business. Usually the founder begins this transition by involving others to manage the business. Involving someone else to manage the company requires the founder to be more conscious and formal in balancing personal interests with the interests of the business because they can no longer do this alignment automatically—someone else is involved.
The second situation is when more than one person owns the business and no single person has the power and support of the other owners to determine collective interests. For example, if a founder intends to transfer ownership in the family business to their four children, two of whom work in the business, how do they balance these unequal differences? The four siblings need a system to do this themselves when the founder is no longer involved.
The third situation is when there are multiple owners and some or all of the owners are not in management. Given the situation above, there is a higher chance that the interests of the two off-spring not employed in the family business may be different from the interests of the two who are employed in the business. Their potential for differences does not mean that the interests cannot be aligned, it just means that there is a greater need for the four owners to have a system in place that differences can be identified and balanced.
These three scenarios can be mitigated by following the guidelines of TMP, or "The Maria Principle"
Succession:
There appear to be two main factors affecting the development of family business and succession process: the size of the family, in relative terms the volume of business, and suitability to lead the organization, in terms of managerial ability, technical and commitment (Arieu, 2010).
Arieu proposed a model in order to classify family firms into four scenarios: political, openness, foreign management and natural succession.
Potential successors who had professional experience outside the family business may decide to leave the firm to found a new one, either with or without the support of the family. Instead, successors tend to be characterized by professional experience only within the family business.
The education of potential successors is a critical issue in the succession process because it affects the endowment of managerial capabilities of the firm. If the succession process has been planned in advance, the incumbent and successor usually show higher levels of satisfaction.
Particularly important is the incumbent’s willingness to step down. The incumbent gradually gives away his power to the successor. This happens step by step and may take several years. Eventually, the successor gains all the authority and influence while the incumbent steps down, leaves to company completely, or remains as an advisor (Sharma, Chrisman, & Chua, 2003; Handler, 1990).
One of the largest trends in family business is the number of women who are taking over their family firms. In the past, succession was reserved for the first-born son, then it moved on to any male heir. Now, women account for approx. 11-12% of all family firm leaders, an increase of close to 40% since 1996.
Daughters are now considered to be one of the most underutilized resources in family businesses. To encourage the next generation of women to be valuable members of the business, potential female successors should be nurtured by assimilation into the family firm, mentoring, sharing of important tacit knowledge and having positive role models within the business.
Success:
Successfully balancing the differing interests of family members and/or the interests of one or more family members on the one hand and the interests of the business on the other hand require the people involved to have the competencies, character and commitment to do this work.
Family-owned companies present special challenges to those who run them. They can be quirky, developing unique cultures and procedures as they grow and mature. That is fine, as long as they continue to be managed by people who are steeped in the traditions, or at least able to adapt to them.
Often family members can benefit from involving more than one professional advisor, each having the particular skill set needed by the family. Some of the skill sets that might be needed include communication, conflict resolution, family systems, finance, legal, accounting, insurance, investing, leadership development, management development, and strategic planning.
Ownership in a family business will also show maturity of the business. If all the shares rest with one individual, a family business is still in its infant stage, even if the revenue is strong.
Examples:
See also:
They are closely identified with the firm through leadership or ownership. Owner-manager entrepreneurial firms are not considered to be family businesses because they lack the multi-generational dimension and family influence that create the unique dynamics and relationships of family businesses.
Family business is the oldest and most common model of economic organization. The vast majority of businesses throughout the world—from corner shops to multinational publicly listed organizations with hundreds of thousands of employees—can be considered family businesses.
Based on research of the Forbes 400 richest Americans, 44% of the Forbes 400 member fortunes were derived by being a member of or in association with a family business.
The economic prevalence and importance of this kind of business are often underestimated. Throughout most of the 20th century, academics and economists were intrigued by a newer, “improved” model: large publicly traded companies run in an apparently rational, bureaucratic manner by well trained “organization men.” Entrepreneurial and family firms, with their specific management models and complicated psychological processes, often fell short by comparison.
Privately owned or family-controlled enterprises are not always easy to study. In many cases, they are not subject to financial reporting requirements, and little information is made public about financial performance. Ownership may be distributed through trusts or holding companies, and family members themselves may not be fully informed about the ownership structure of their enterprise.
However, as the 21st-century global economic model replaces the old industrial model, government policy makers, economists, and academics turn to entrepreneurial and family enterprises as a prime source of wealth creation and employment.
In some countries, many of the largest publicly listed firms are family-owned. A firm is said to be family-owned if a person is the controlling shareholder; that is, a person (rather than a state, corporation, management trust, or mutual fund) can garner enough shares to assure at least 20% of the voting rights and the highest percentage of voting rights in comparison to other shareholders.
Some of the world's largest family-run businesses are Walmart (United States), Samsung Group (Korea) and Tata Group (India).
The "Global Family Business Index" comprises the largest 500 family firms around the globe. In this index—published for a first time in 2015 by Center for Family Business University of St. Gallen and EY—for a privately held firm, a firm is classified as a family firm in case a family controls more than 50% of the voting rights. For a publicly listed firm, a firm is classified as a family firm in case the family holds at least 32% of the voting rights.
Family owned businesses account for over 30% of companies with sales over $1 billion.
In a family business, two or more members within the management team are drawn from the owning family. Family businesses can have owners who are not family members. Family businesses may also be managed by individuals who are not members of the family.
However, family members are often involved in the operations of their family business in some capacity and, in smaller companies, usually one or more family members are the senior officers and managers. In India, many businesses that are now public companies were once family businesses.
Family participation as managers and/or owners of a business can strengthen the company because family members are often loyal and dedicated to the family enterprise. However, family participation as managers and/or owners of a business can present unique problems because the dynamics of the family system and the dynamics of the business systems are often not in balance.
Problems:
The interests of a family member may not be aligned with the interest of the business. For example, if a family member wants to be president but is not as competent as a non-family member, the personal interest of the family member and the well being of the business may be in conflict.
The interests of the entire family may not be balanced with the interests of their business. For example, if a family needs its business to distribute funds for living expenses and retirement but the business requires those to stay competitive, the interests of the entire family and the business are not aligned.
Finally, the interest of one family member may not be aligned with another family member.
For example, a family member who is an owner may want to sell the business to maximize their return, but a family member who is an owner and also a manager may want to keep the company because it represents their career and they want their children to have the opportunity to work in the company.
The three circles model:
The challenge for business families is that family, ownership and business roles involve different and sometimes conflicting values, goals, and actions. For example, family members put a high priority on emotional capital—the family success that unites them through consecutive generations.
Executives in the business are concerned about strategy and social capital—the reputation of their firm in the marketplace. Owners are interested in financial capital—performance in terms of wealth creation.
A three-circles model is often used to show the three principal roles in a family-owned or -controlled organization: Family, Ownership and Management. This model shows how the roles may overlap.
Everyone in the family (in all generations) obviously belongs to the Family circle, but some family members will never own shares in the family business, or ever work there. A family member is concerned with social capital (reputation within the community), dividends, and family unity.
The Ownership circle may include family members, investors and/or employee-owners. An owner is concerned with financial capital (business performance and dividends). The Management circle typically includes non-family members who are employed by the family business.
Family members may also be employees. An employee is concerned with social capital (reputation), emotional capital (career opportunities, bonuses and fair performance measures).
A few people—for example, the founder or a senior family member—may hold all three roles: family member, owner and employee. These individuals are intensely connected to the family business, and concerned with any or all of the above sources of value creation.
The genogram:
A genogram is an organization chart for the family. It is an enhanced family tree that shows not only family events like births and deaths, but also indicates the relationships (close, conflicted, cut-off, etc.) among individuals in the family. It is a useful tool for spotting relationship patterns across generations, and decrypting seemingly irrational behavior.
Family myths—sets of beliefs that are shared by the family members—can play important defensive and protective roles in families. Myths help people cope with stress and anxiety and, by prescribing ritualistic behavior patterns, will enable them to establish a common front against the outside world.
They provide a rationale for the way people behave, but because much of what makes up a family myth takes place deep beneath the surface, they also conceal the true issues, problems, and conflicts. Although these family myths can turn into a blueprint for family action, they can also turn into straitjackets, reducing a family's flexibility and capacity to respond to new situations. (See also: Family nexus.)
Parallel planning processes:
All businesses require planning, but business families face the additional planning task of balancing family and business demands. There are five critical issues where the needs of the family and the demands of the business overlap—and require parallel planning action to ensure that business success does not create a family or business disaster:
- Capital How are the firm’s financial resources allocated between different and family demands?
- Control Who has decision-making power in the family and firm?
- Careers How are individuals selected for senior leadership and governance positions in the firm or family?
- Conflict How do we prevent this natural element of human relationships from becoming the default pattern of interaction?
- Culture How are the family and business values sustained and transmitted to owners, employees and younger family members?
Fair Process:
Fairness is a fundamental issue in family business decision-making. Solutions that are perceived as fair by the family and business stakeholders are more likely to be accepted and supported. Fair process helps create organizational justice by engaging family members, whether as owners and employees, in a series of practical steps to address and resolve critical issues. Fair process lays a foundation for continued family participation over generations.
Emotional dimension:
The challenge faced by family businesses and their stakeholders, is to recognise the issues that they face, understand how to develop strategies to address them and more importantly, to create narratives, or family stories that explain the emotional dimension of the issues to the family.
The most intractable family business issues are not the business problems the organisation faces, but the emotional issues that compound them. Many years of achievement through generations can be destroyed by the next, if the family fails to address the psychological issues they face.
Applying psychodynamic concepts will help to explain behaviour and will enable the family to prepare for life cycle transitions and other issues that may arise. Family-run organisations need a new understanding and a broader perspective on the human dynamics of family firms with two complementary frameworks, psychodynamic and family systematic.
Structuring:
When the family business is basically owned and operated by one person, that person usually does the necessary balancing automatically. For example, the founder may decide the business needs to build a new plant and take less money out of the business for a period so the business can accumulate cash needed to expand.
In making this decision, the founder is balancing his personal interests (taking cash out) with the needs of the business (expansion).
Most first generation owner/managers make the majority of the decisions. When the second generation (sibling partnership) is in control, the decision making becomes more consultative. When the larger third generation (cousin consortium) is in control, the decision making becomes more consensual, the family members often take a vote. In this manner, the decision making throughout generations becomes more rational.
The assets that are owned by the family, in most family businesses, are hard to separate from the assets that belong to the business.
Scenarios:
Balancing competing interests often become difficult in three situations:
The first situation is when the founder wants to change the nature of their involvement in the business. Usually the founder begins this transition by involving others to manage the business. Involving someone else to manage the company requires the founder to be more conscious and formal in balancing personal interests with the interests of the business because they can no longer do this alignment automatically—someone else is involved.
The second situation is when more than one person owns the business and no single person has the power and support of the other owners to determine collective interests. For example, if a founder intends to transfer ownership in the family business to their four children, two of whom work in the business, how do they balance these unequal differences? The four siblings need a system to do this themselves when the founder is no longer involved.
The third situation is when there are multiple owners and some or all of the owners are not in management. Given the situation above, there is a higher chance that the interests of the two off-spring not employed in the family business may be different from the interests of the two who are employed in the business. Their potential for differences does not mean that the interests cannot be aligned, it just means that there is a greater need for the four owners to have a system in place that differences can be identified and balanced.
These three scenarios can be mitigated by following the guidelines of TMP, or "The Maria Principle"
Succession:
There appear to be two main factors affecting the development of family business and succession process: the size of the family, in relative terms the volume of business, and suitability to lead the organization, in terms of managerial ability, technical and commitment (Arieu, 2010).
Arieu proposed a model in order to classify family firms into four scenarios: political, openness, foreign management and natural succession.
Potential successors who had professional experience outside the family business may decide to leave the firm to found a new one, either with or without the support of the family. Instead, successors tend to be characterized by professional experience only within the family business.
The education of potential successors is a critical issue in the succession process because it affects the endowment of managerial capabilities of the firm. If the succession process has been planned in advance, the incumbent and successor usually show higher levels of satisfaction.
Particularly important is the incumbent’s willingness to step down. The incumbent gradually gives away his power to the successor. This happens step by step and may take several years. Eventually, the successor gains all the authority and influence while the incumbent steps down, leaves to company completely, or remains as an advisor (Sharma, Chrisman, & Chua, 2003; Handler, 1990).
One of the largest trends in family business is the number of women who are taking over their family firms. In the past, succession was reserved for the first-born son, then it moved on to any male heir. Now, women account for approx. 11-12% of all family firm leaders, an increase of close to 40% since 1996.
Daughters are now considered to be one of the most underutilized resources in family businesses. To encourage the next generation of women to be valuable members of the business, potential female successors should be nurtured by assimilation into the family firm, mentoring, sharing of important tacit knowledge and having positive role models within the business.
Success:
Successfully balancing the differing interests of family members and/or the interests of one or more family members on the one hand and the interests of the business on the other hand require the people involved to have the competencies, character and commitment to do this work.
Family-owned companies present special challenges to those who run them. They can be quirky, developing unique cultures and procedures as they grow and mature. That is fine, as long as they continue to be managed by people who are steeped in the traditions, or at least able to adapt to them.
Often family members can benefit from involving more than one professional advisor, each having the particular skill set needed by the family. Some of the skill sets that might be needed include communication, conflict resolution, family systems, finance, legal, accounting, insurance, investing, leadership development, management development, and strategic planning.
Ownership in a family business will also show maturity of the business. If all the shares rest with one individual, a family business is still in its infant stage, even if the revenue is strong.
Examples:
- Aditya Birla Group
- Avantha Group
- Bombardier Inc.
- BMW AG
- Cargill
- Chic Fil A
- Comcast
- Country-Wide Insurance Company
- Dillard's
- Ford
- Glencore
- Heineken
- Jolly Time
- Koch Industries
- KONE
- Lundberg Family Farms
- Mango
- Mittal Steel
- Nordstrom
- Panda Energy International
- Porsche SE (Volkswagen Group)
- Raymond Group
- Red Bull
- Simon Property Group
- Solaris Bus & Coach
- Swinkels Family Brewers
- Talking Pictures TV
- Tata Group
- Toyota
- Trump Organization
- Utz Quality Foods
- Walmart
- Wawa
- Wegmans
- WWE
- Kingfisher Airlines
See also:
Supply Chain Management,
YouTube Video: What is Supply Chain Management?
Pictured below: "Supply Chain Management is strategic thinking: Effective SCM improves both efficiency and effectiveness in a strategic context (Quiett, 2002)"
YouTube Video: What is Supply Chain Management?
Pictured below: "Supply Chain Management is strategic thinking: Effective SCM improves both efficiency and effectiveness in a strategic context (Quiett, 2002)"
In commerce, supply-chain management (SCM), the management of the flow of goods and services, involves the movement and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to point of consumption. Interconnected or interlinked networks, channels and node businesses combine in the provision of products and services required by end customers in a supply chain.
Supply-chain management has been defined as the "design, planning, execution, control, and monitoring of supply-chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally."
SCM practice draws heavily from the following areas:
SCM strives for an integrated approach. Marketing channels play an important role in supply-chain management. Current research in supply-chain management is concerned with topics related to sustainability and risk management, among others.
Some suggest that the “people dimension” of SCM, ethical issues, internal integration, transparency/visibility, and human capital/talent management are topics that have, so far, been underrepresented on the research agenda.
Mission:
Supply-chain management, techniques with the aim of coordinating all parts of SC from supplying raw materials to delivering and/or resumption of products, tries to minimize total costs with respect to existing conflicts among the chain partners.
An example of these conflicts is the interrelation between the sale department desiring to have higher inventory levels to fulfill demands and the warehouse for which lower inventories are desired to reduce holding costs.
Click on any of the following blue hyperlinks for more about Supply Chain Management:
Supply-chain management has been defined as the "design, planning, execution, control, and monitoring of supply-chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally."
SCM practice draws heavily from the following areas:
- industrial engineering,
- systems engineering,
- operations management,
- logistics,
- procurement,
- information technology,
- and marketing
SCM strives for an integrated approach. Marketing channels play an important role in supply-chain management. Current research in supply-chain management is concerned with topics related to sustainability and risk management, among others.
Some suggest that the “people dimension” of SCM, ethical issues, internal integration, transparency/visibility, and human capital/talent management are topics that have, so far, been underrepresented on the research agenda.
Mission:
Supply-chain management, techniques with the aim of coordinating all parts of SC from supplying raw materials to delivering and/or resumption of products, tries to minimize total costs with respect to existing conflicts among the chain partners.
An example of these conflicts is the interrelation between the sale department desiring to have higher inventory levels to fulfill demands and the warehouse for which lower inventories are desired to reduce holding costs.
Click on any of the following blue hyperlinks for more about Supply Chain Management:
- Origin of the term and definitions
- Functions
- Importance
- Historical developments
- Business-process integration
- Theories
- Supply chain
- Tax-efficient supply-chain management
- Sustainability and social responsibility in supply chains
- Circular supply-chain management
- Components
- Systems and value
- Global applications
- Supply chain consulting
- Certification
- See also:
- Beer distribution game
- Bullwhip effect
- Calculating demand forecast accuracy
- Cold chain
- Customer-driven supply chain
- Customer-relationship management
- Demand-chain management
- Distribution
- Document automation
- Ecodesk
- Enterprise planning systems
- Enterprise resource planning
- Industrial engineering
- Information technology management
- Integrated business planning
- Inventory
- Inventory control system
- Inventory management software
- LARG SCM
- Liquid logistics
- Logistic engineering
- Logistics
- Logistics management
- Logistics Officer
- Management accounting in supply chains
- Management information system
- Master of Science in Supply Chain Management
- Military supply-chain management
- Netchain analysis
- Offshoring Research Network
- Operations management
- Order fulfillment
- Procurement
- Procurement outsourcing
- Radio-frequency identification
- Reverse logistics
- Service management
- Software configuration management (SCM)
- Strategic information system
- Supply-chain-management software
- Supply-chain network
- Supply-chain security
- Supply chain
- Supply management
- Value chain
- Value grid
- Vendor-managed inventory
- Warehouse
- Warehouse management system
- Associations:
United States Chamber of Commerce
- YouTube Video: The Small Business Series | U.S. Chamber of Commerce
- YouTube Video: What Is The Chamber of Commerce Doing For You?
- YouTube Video: Benefits of Chamber Membership for Your Business
The United States Chamber of Commerce (USCC) is a business-oriented American lobbying group.
Politically, the Chamber usually supports Republican political candidates, though it has occasionally supported conservative Democrats.
The Chamber is the largest lobbying group in the U.S., spending more money than any other lobbying organization on a yearly basis.
Click on any of the following blue hyperlinks for more about the United States Chamber of Commerce:
Politically, the Chamber usually supports Republican political candidates, though it has occasionally supported conservative Democrats.
The Chamber is the largest lobbying group in the U.S., spending more money than any other lobbying organization on a yearly basis.
Click on any of the following blue hyperlinks for more about the United States Chamber of Commerce:
- History
- Positions taken
- Lobbying expenditures
- International network
- Electoral activities
- Leadership
- Controversies
- Opposition
- Affiliate organizations
- See also:
- Official website
- Real Clear Politics Portal
- Guide to Chamber of Commerce of the United States of America. Publications. 5332. Kheel Center for Labor-Management Documentation and Archives, Martin P. Catherwood Library, Cornell University.
- Chamber of Commerce of the United States of America. Communications Development Division. Videotape collection, 1988-1992. Schlesinger Library, Radcliffe Institute, Harvard University.
- Advocacy group
- American Green Chamber of Commerce
- Global Intellectual Property Center
- Lobbying in the United States
- National Federation of Independent Business
- U.S. Women's Chamber of Commerce
- United States Hispanic Chamber of Commerce
List of Legal Business Categories Impacting the United States
- YouTube Video: Ten Differences Between LLCs & Corporations to Consider (Beyond Taxation)
- YouTube Video: How to Write and Effective Business Plan in Looking for Investors
- YouTube Video: How to Use AI as a Virtual Assistant
* -- Continuing above picture article below:
7 Steps to Starting Your Own Business Quickly and Effectively
By Mitchell York (Updated on November 21, 2018)
Increasing numbers of people are coming to realize that corporate America has changed. Job security is largely a relic, benefits are not nearly what they used to be, and starting your own business is looking a lot less risky.
If you're amongst the majority of Americans who'd like to attain gainful self-employment, here are our seven key steps to starting your own business without wasting precious time and financial resources.
1) Make Sure Entrepreneurship Is What You Really Want:
If you are thinking of starting a business because you lost your job and are having trouble finding a new one, then think about doing a better job search. Hire a career coach or get some training. Starting a business is much harder than getting a job, so it's worth the extra effort to look for employment in a better way if that's your true preference.
Also, think about whether you have what it takes to start a business in these terms: No one will tell you what to do (except your customers). You have to be self-motivated, willing to make many sacrifices and be able to last for the long term while your business goes from startup to maturity.
2) Decide What Kind of Business You Want:
Franchise or independent? Service or manufacturing? Brick-and-mortar retail or online? Consumer or business-to-business? There are dozens of different types of businesses, each with its own benefits and drawbacks. Like to work with the public? A retail store might be right for you, but you will face the tradeoff of having a lot of overhead (rent and utilities for example).
Note:
Want to keep your business small with low overhead, and sell your expertise? Being a consultant might suit you, but there are only 24 hours in a day and that could limit your income.
3) Research Your Idea:
The most important thing to remember if you are considering starting a business is this: It's not a race. People who rush get penalized in the marketplace much more severely than people who take their time. You may hear the words "first-mover advantage"—the idea that you get a big head start by being out with a product before anyone else. But that idea is overblown, especially for small businesses. Emerge too soon and you could squander precious resources.
It's far better to methodically, diligently research your idea. Is anyone else doing it? What's the competition like? Do consumers and businesses have viable substitutes if they don't choose your product? Does your product really solve a pesky problem? Is the demand going to be great enough in the future, not just for a year or two? Once you're completely convinced you have the virtual better mousetrap, then you can proceed.
4) Write a Business Plan:
With the dozens of business-plan-in-a-box resources available online, there is no longer an excuse not to write (not think, write) a business plan before you launch your business. Why write a plan even if you are the only person who works in the business? Because it forces you to answer critical questions that you must not ignore if you want to have a strong chance of success. It doesn't have to be long.
Make it a single page if you don't have the patience to do more. But it should answer these questions:
5) Choose a Business Structure:
According to small business CPA Michael Hanley, "The foundation for tax planning begins even before your first day of business operations. Of all the decisions a business owner will make, very few will have as great an impact as entity selection.
Deciding whether to become a Sole Proprietorship, a Partnership, a traditional Corporation, an S-Corporation, or a Limited Liability Company (LLC) will have a long-lasting effect on the future tax implications of your business.
Note:
You can learn about the benefits and tradeoffs of each plan in a number of places and there are excellent, brief books on the subject, too.
6) Assemble Your Team:
While your team consists mainly of employees, think more broadly. You will need trusted advisors including an attorney, a tax accountant, an insurance advisor/agent. You may want to consider hiring a Virtual Assistant who's experienced in startups to handle the administrative tasks that come with launching a business.
7) Handle the Paperwork:
Along with starting a business come a variety of paperwork requirements that can't be overlooked, including:
Final Thoughts on Starting Your Own Business:
No matter what type of business you start—selling physical products, offering up your services on a contract basis, building a digital product, or launching a startup—there are going to be ups and downs.
When going into business for yourself, it's incredibly important to set realistic expectations o that you're not winding up disappointed with your progress after the first few months of growing your customer base.
Do your homework on your industry, gain momentum on the side before quitting your full-time job, and launch once you're already generating revenue for your business. Then, you'll be poised to grow from there.
___________________________________________________________________________
List of legal entity types by country (Wikipedia)
A business entity is an entity that is formed and administered as per corporate law in order to engage in business activities, charitable work, or other activities allowable. Most often, business entities are formed to sell a product or a service.
There are many types of business entities defined in the legal systems of various countries. These include:
The specific rules vary by country and by state or province. Some of these types are listed below, by country.
For guidance, approximate equivalents in the company law of English-speaking countries are given in most cases, for example:
However, the regulations governing particular types of entities, even those described as roughly equivalent, differ from jurisdiction to jurisdiction. When creating or restructuring a business, the legal responsibilities will depend on the type of business entity chosen.
In the United States:
In the United States, most legal entities are incorporated under the law of a particular state. The federal government does not generally incorporate entities (the verb "charter" is used instead), with a few narrow exceptions, either government-sponsored corporations or government-owned corporations.
Those entities existing on the state level have two separate identities: their legal entity type, e.g., partnership, corporation, or LLC, and their tax classification, what they are regarded as for federal income tax purposes. A further way to classify an entity is whether it is a for-profit or nonprofit enterprise, each classification with its own taxonomy and implications on federal income tax law. For-profit entities exist for the purpose of producing a profit for their owners whereas nonprofits exist for any purpose other than profit.
Tax classifications:
For federal tax purposes, the Internal Revenue Service has separate entity classification rules, generally depending on whether an entity is a for-profit or non-profit organization. For-profit entities can be collectively regarded as "taxable organizations" while nonprofit entities are collectively regarded as "tax-exempt organizations" or simply "exempt organizations."
Taxable Organizations:
Under the Internal Revenue Code, a for-profit entity may be classified as a corporation, a partnership, a cooperative or a disregarded entity. A corporation is taxed as a C corporation unless it elects and meets the requirements to be taxed as an S Corporation.
A disregarded entity has one owner (or a married couple as owner) that is not recognized for tax purposes as an entity separate from its owner, so the owner is taxed on the individual level. Types of disregarded entities include single-member LLCs; qualified sub-chapter S subsidiaries and qualified real estate investment trust subsidiaries.
A disregarded entity's transparent tax status does not affect its status under state law. For example, for federal tax purposes, a sole-member LLC (SMLLC) is disregarded, so that all its assets and liabilities are treated as owned by its single member. But under state law, an SMLLC can contract in its own name and its owner is generally not personally liable for the debts and obligations of the entity.
To be recognized as a Cooperative for tax purposes Cooperatives must follow certain rules under Sub Chapter T of the Internal Revenue Code.
Tax Exempt Organizations:
Nonprofit organizations on the state level are exempt from federal income taxation for most types of income. There are two main types of tax exempt organizations under the Internal Revenue Code: 501(c) organizations and 527 organizations. Tax exemption has two components: exemption from income taxation and the allowance of a deduction on the tax returns of donors.
Section 501(c) encompasses most types of nonprofit entities other than ones engaged substantially in political activity. There are 29 subtypes of 501(c) organizations. For example, section 501(c)(10) includes "domestic fraternal societies, orders, or associations, operating under the lodge system," while section 501(c)(6) includes "business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues" under certain circumstances.
The most prevalent type of 501(c)s are 501(c)(3) organizations, known broadly as "charitable organizations," those whose purpose is charitable (i.e., relief from poverty), educational, scientific, religious, or advocatory, among others, as long as such organization does not engage in substantial political activity or inure the benefit of net earnings to shareholders or other individuals.
This is the preferred tax status because it is the only 501(c) that obtains both income tax exemption and tax deductible donations. All other 501(c) types only obtain tax exemption. Section 501(c)(3)s can be further divided into private foundations, public charities, and private operating foundations with private foundations given the least favorable deductibility rate.
State-level unincorporated nonprofit associations, charitable trusts, and nonprofit corporations may fall into any one of the 501(c) categories depending on their purpose and the activities they engage in.
Section 527 organizations, also called "political organizations," are any nonprofit substantially engaged in "political activity," such as election campaigning or lobbying. These are organizations like political parties and election campaign committees, which are often called political action committees (PACs) or Super-PACs.
These organizations are subject to more stringent regulations than 501(c) organizations and only receive tax exemption; donations to 527s are not deductible. Any type of nonprofit entity existing on the state level will be regarded as a 527 if it substantially engages in political activity.
Federally chartered:
Of the few types of companies that may exist under a federally issued charter, the bulk are banks, credit unions, and similar depository institutions. Such institutions are distinguished from state-chartered banks by including a key word in their formal names.
For a bank, the key word is "national". A bank chartered by the Office of the Comptroller of the Currency (OCC) must have the word "national" in its name. A bank chartered by a state cannot have "national" in its name.
For a savings bank (formerly called a savings and loan association) or credit union, the key word is "federal", and the same rules apply; a federally chartered savings bank or credit union must have the word "federal" in its name, while a state chartered savings bank or credit union cannot have "federal" in its name.
Many federal governmental units are specially formed public corporations (which, for tax purposes are also generally 501(c)(1) organizations) and government-sponsored enterprises, while some private organizations have received a Congressional charter.
State, territory or commonwealth; unincorporated
The following are the entity structures that can be created without licensure by the government, or in other words are "unincorporated":
Trusts:
Partnerships:
To determine whether a general partnership exists courts analyze a few factors:
Unincorporated Associations:
State, territory or commonwealth; incorporated:
Partnerships:
Limited Liability Companies:
Corporations:
For-profit:
Nonprofit:
Cooperatives:
Others:
See also:
7 Steps to Starting Your Own Business Quickly and Effectively
By Mitchell York (Updated on November 21, 2018)
Increasing numbers of people are coming to realize that corporate America has changed. Job security is largely a relic, benefits are not nearly what they used to be, and starting your own business is looking a lot less risky.
If you're amongst the majority of Americans who'd like to attain gainful self-employment, here are our seven key steps to starting your own business without wasting precious time and financial resources.
1) Make Sure Entrepreneurship Is What You Really Want:
If you are thinking of starting a business because you lost your job and are having trouble finding a new one, then think about doing a better job search. Hire a career coach or get some training. Starting a business is much harder than getting a job, so it's worth the extra effort to look for employment in a better way if that's your true preference.
Also, think about whether you have what it takes to start a business in these terms: No one will tell you what to do (except your customers). You have to be self-motivated, willing to make many sacrifices and be able to last for the long term while your business goes from startup to maturity.
2) Decide What Kind of Business You Want:
Franchise or independent? Service or manufacturing? Brick-and-mortar retail or online? Consumer or business-to-business? There are dozens of different types of businesses, each with its own benefits and drawbacks. Like to work with the public? A retail store might be right for you, but you will face the tradeoff of having a lot of overhead (rent and utilities for example).
Note:
Want to keep your business small with low overhead, and sell your expertise? Being a consultant might suit you, but there are only 24 hours in a day and that could limit your income.
3) Research Your Idea:
The most important thing to remember if you are considering starting a business is this: It's not a race. People who rush get penalized in the marketplace much more severely than people who take their time. You may hear the words "first-mover advantage"—the idea that you get a big head start by being out with a product before anyone else. But that idea is overblown, especially for small businesses. Emerge too soon and you could squander precious resources.
It's far better to methodically, diligently research your idea. Is anyone else doing it? What's the competition like? Do consumers and businesses have viable substitutes if they don't choose your product? Does your product really solve a pesky problem? Is the demand going to be great enough in the future, not just for a year or two? Once you're completely convinced you have the virtual better mousetrap, then you can proceed.
4) Write a Business Plan:
With the dozens of business-plan-in-a-box resources available online, there is no longer an excuse not to write (not think, write) a business plan before you launch your business. Why write a plan even if you are the only person who works in the business? Because it forces you to answer critical questions that you must not ignore if you want to have a strong chance of success. It doesn't have to be long.
Make it a single page if you don't have the patience to do more. But it should answer these questions:
- What is the purpose of the business?
- Who are my customers?
- What problem does my product/service solve?
- Who is my competition and why is my product/service's advantage?
- How will I price, position, market and support my product?
- What are my financial projections for the business for the next 3-5 years?
5) Choose a Business Structure:
According to small business CPA Michael Hanley, "The foundation for tax planning begins even before your first day of business operations. Of all the decisions a business owner will make, very few will have as great an impact as entity selection.
Deciding whether to become a Sole Proprietorship, a Partnership, a traditional Corporation, an S-Corporation, or a Limited Liability Company (LLC) will have a long-lasting effect on the future tax implications of your business.
Note:
You can learn about the benefits and tradeoffs of each plan in a number of places and there are excellent, brief books on the subject, too.
6) Assemble Your Team:
While your team consists mainly of employees, think more broadly. You will need trusted advisors including an attorney, a tax accountant, an insurance advisor/agent. You may want to consider hiring a Virtual Assistant who's experienced in startups to handle the administrative tasks that come with launching a business.
7) Handle the Paperwork:
Along with starting a business come a variety of paperwork requirements that can't be overlooked, including:
- Filing for applicable licenses and registrations from your state's government. Get guidance from your state's Office of Taxation website on which forms you will need to complete.
- If proprietary intellectual property is an important asset to your business, you need to protect it immediately. Even though filing for trademarks and patents is expensive, it's far more costly to battle someone over rights down the line. Also make sure you acquire Internet domain names that may be important to your business (.com, .net and .org at the very least and consider .biz and others, too).
- If you form a minority or women-owned business, you may qualify for special government programs that can provide startup capital.
- Purchase appropriate business insurance before you begin operations.
Final Thoughts on Starting Your Own Business:
No matter what type of business you start—selling physical products, offering up your services on a contract basis, building a digital product, or launching a startup—there are going to be ups and downs.
When going into business for yourself, it's incredibly important to set realistic expectations o that you're not winding up disappointed with your progress after the first few months of growing your customer base.
Do your homework on your industry, gain momentum on the side before quitting your full-time job, and launch once you're already generating revenue for your business. Then, you'll be poised to grow from there.
___________________________________________________________________________
List of legal entity types by country (Wikipedia)
A business entity is an entity that is formed and administered as per corporate law in order to engage in business activities, charitable work, or other activities allowable. Most often, business entities are formed to sell a product or a service.
There are many types of business entities defined in the legal systems of various countries. These include:
- corporations,
- cooperatives,
- partnerships,
- sole traders,
- limited liability companies
- and other specifically permitted and labelled types of entities.
The specific rules vary by country and by state or province. Some of these types are listed below, by country.
For guidance, approximate equivalents in the company law of English-speaking countries are given in most cases, for example:
- private company limited by shares or Ltd. (United Kingdom, Ireland, and the Commonwealth)
- public limited company (United Kingdom, Ireland, and the Commonwealth)
- limited partnership
- general partnership
- chartered company
- statutory corporation
- state-owned enterprise
- holding company
- subsidiary company
- sole proprietorship
- charitable incorporated organisation (UK)
- reciprocal inter-insurance exchange
However, the regulations governing particular types of entities, even those described as roughly equivalent, differ from jurisdiction to jurisdiction. When creating or restructuring a business, the legal responsibilities will depend on the type of business entity chosen.
In the United States:
In the United States, most legal entities are incorporated under the law of a particular state. The federal government does not generally incorporate entities (the verb "charter" is used instead), with a few narrow exceptions, either government-sponsored corporations or government-owned corporations.
Those entities existing on the state level have two separate identities: their legal entity type, e.g., partnership, corporation, or LLC, and their tax classification, what they are regarded as for federal income tax purposes. A further way to classify an entity is whether it is a for-profit or nonprofit enterprise, each classification with its own taxonomy and implications on federal income tax law. For-profit entities exist for the purpose of producing a profit for their owners whereas nonprofits exist for any purpose other than profit.
Tax classifications:
For federal tax purposes, the Internal Revenue Service has separate entity classification rules, generally depending on whether an entity is a for-profit or non-profit organization. For-profit entities can be collectively regarded as "taxable organizations" while nonprofit entities are collectively regarded as "tax-exempt organizations" or simply "exempt organizations."
Taxable Organizations:
Under the Internal Revenue Code, a for-profit entity may be classified as a corporation, a partnership, a cooperative or a disregarded entity. A corporation is taxed as a C corporation unless it elects and meets the requirements to be taxed as an S Corporation.
A disregarded entity has one owner (or a married couple as owner) that is not recognized for tax purposes as an entity separate from its owner, so the owner is taxed on the individual level. Types of disregarded entities include single-member LLCs; qualified sub-chapter S subsidiaries and qualified real estate investment trust subsidiaries.
A disregarded entity's transparent tax status does not affect its status under state law. For example, for federal tax purposes, a sole-member LLC (SMLLC) is disregarded, so that all its assets and liabilities are treated as owned by its single member. But under state law, an SMLLC can contract in its own name and its owner is generally not personally liable for the debts and obligations of the entity.
To be recognized as a Cooperative for tax purposes Cooperatives must follow certain rules under Sub Chapter T of the Internal Revenue Code.
Tax Exempt Organizations:
Nonprofit organizations on the state level are exempt from federal income taxation for most types of income. There are two main types of tax exempt organizations under the Internal Revenue Code: 501(c) organizations and 527 organizations. Tax exemption has two components: exemption from income taxation and the allowance of a deduction on the tax returns of donors.
Section 501(c) encompasses most types of nonprofit entities other than ones engaged substantially in political activity. There are 29 subtypes of 501(c) organizations. For example, section 501(c)(10) includes "domestic fraternal societies, orders, or associations, operating under the lodge system," while section 501(c)(6) includes "business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues" under certain circumstances.
The most prevalent type of 501(c)s are 501(c)(3) organizations, known broadly as "charitable organizations," those whose purpose is charitable (i.e., relief from poverty), educational, scientific, religious, or advocatory, among others, as long as such organization does not engage in substantial political activity or inure the benefit of net earnings to shareholders or other individuals.
This is the preferred tax status because it is the only 501(c) that obtains both income tax exemption and tax deductible donations. All other 501(c) types only obtain tax exemption. Section 501(c)(3)s can be further divided into private foundations, public charities, and private operating foundations with private foundations given the least favorable deductibility rate.
State-level unincorporated nonprofit associations, charitable trusts, and nonprofit corporations may fall into any one of the 501(c) categories depending on their purpose and the activities they engage in.
Section 527 organizations, also called "political organizations," are any nonprofit substantially engaged in "political activity," such as election campaigning or lobbying. These are organizations like political parties and election campaign committees, which are often called political action committees (PACs) or Super-PACs.
These organizations are subject to more stringent regulations than 501(c) organizations and only receive tax exemption; donations to 527s are not deductible. Any type of nonprofit entity existing on the state level will be regarded as a 527 if it substantially engages in political activity.
Federally chartered:
Of the few types of companies that may exist under a federally issued charter, the bulk are banks, credit unions, and similar depository institutions. Such institutions are distinguished from state-chartered banks by including a key word in their formal names.
For a bank, the key word is "national". A bank chartered by the Office of the Comptroller of the Currency (OCC) must have the word "national" in its name. A bank chartered by a state cannot have "national" in its name.
For a savings bank (formerly called a savings and loan association) or credit union, the key word is "federal", and the same rules apply; a federally chartered savings bank or credit union must have the word "federal" in its name, while a state chartered savings bank or credit union cannot have "federal" in its name.
- Federal Savings Bank (FSB): formerly called federal savings and loan association
- National Association (NA): a designation used by banks chartered by the Office of the Comptroller of the Currency (OCC)
- National Trust and Savings Association (NT&SA): a less common designation used by national banks
- Federal Credit Union: chartered by the National Credit Union Association (NCUA)
Many federal governmental units are specially formed public corporations (which, for tax purposes are also generally 501(c)(1) organizations) and government-sponsored enterprises, while some private organizations have received a Congressional charter.
State, territory or commonwealth; unincorporated
The following are the entity structures that can be created without licensure by the government, or in other words are "unincorporated":
- Sole proprietorship: a business consisting of a single owner (which may in turn be a business entity), not in a separately recognized business form.
Trusts:
- Trust: a legal relationship wherein one person (a "settlor") grants another property to another (a "trustee") for the benefit of a single or limited amount of third-parties ("beneficiaries").
- Charitable trust: a trust wherein the beneficiary is the general public.
Partnerships:
- General partnership: an association of two or more persons for the purpose of producing a profit for the members of the partnership (called "general partners" or simply "partners"). All partners jointly and separately liable for the debts of the partnership. In most U.S. states, it can be created by agreement without requiring a public filing or any written agreement, as long as all parties must have an intend to establish a business relationship with one another. The partners may themselves be individuals or legal entities (in which case it is generally called a joint venture).
To determine whether a general partnership exists courts analyze a few factors:
- intention of the parties,
- sharing of profits and losses
- joint administration and control of business operation,
- capital investment by each partner,
- common ownership of property.
Unincorporated Associations:
- Unincorporated nonprofit association: an association of two or more persons for the purpose of accomplishing a common goal other than profit; this is the nonprofit equivalent to general partnerships.
State, territory or commonwealth; incorporated:
Partnerships:
- Limited partnership (LP): a partnership where at least one partner (the general partner, which may itself be an entity or an individual) has unlimited liability for the LP's debts and one or more partners (the limited partners) have limited liability (which means that they are not responsible for the LP's debts beyond the amount they agreed to invest). Limited partners generally do not participate in the management of the entity or its business.
- Limited liability partnership (LLP): a partnership where a partner's liability for the debts of the partnership is limited except in the case of liability for acts of professional negligence or malpractice. In some states, LLPs may only be formed for purposes of practicing a licensed profession, typically attorneys, accountants and architects. This is often the only form of limited partnership allowed for law firms (as opposed to general partnerships).
- Limited liability limited partnership (LLLP): a combination of LP and LLP, available in some states.
Limited Liability Companies:
- Limited liability company (LLC, LC, Ltd., or Co.): a form of business whose owners enjoy limited liability, but which is not a corporation. Allowable abbreviations vary by state. Note that in some states Ltd. by itself is not a valid abbreviation for an LLC, because in some states (e.g. Texas), it may denote a corporation instead. See also Series LLC. For U.S. federal tax purposes, in general, an LLC with two or more members is treated as a partnership, and an LLC with one member is treated as a sole proprietorship.
- Professional limited liability company (PLLC): some states do not allow certain professionals to form an LLC that would limit the liability that results from the services professionals provide such as doctors, medical care; lawyers, legal advice; and accountants, accounting services; architects, architectural services; when the company formed offers the services of the professionals. Instead those states allow a PLLC or in the LLC statutes, the liability limitation only applies to the business side, such as creditors of the company, as opposed to the client/customer service side, the level of medical care, legal services, or accounting provided to clients. This is meant to maintain the higher ethical standards that these professionals have committed themselves to by becoming licensed in their profession and to prevent them from being immune (or at least limit their immunity) to malpractice suits.
- Low-profit limited liability company (L3C): a hybrid for-profit and nonprofit entity available in some states. It is an LLC that is allowed to have a primary nonprofit purpose, and a secondary for-profit purpose.
Corporations:
For-profit:
- Corporation (Corp., Inc., or Incorporated): a legal entity that is owned by shareholders and managed by directors and officers, all of which enjoy limited liability. A corporation can be a public or private company. In some states other suffixes may be used to identify a corporation, such as Ltd., Co./Company, or the Italian term S.p.A. (in Connecticut; see under Italy). Some states that allow the use of "Company" prohibit the use of "and Company", "and Co.", "& Company" or "& Co.". In most states sole proprietorships and partnerships may register a fictitious "doing business as" name with the word "Company" in it. For a full list of allowed designations by state, see the table referenced below.
- Benefit corporation (PBC): a for-profit corporation that includes positive impact on society, workers, the community, and the environment in addition to profit as its legally defined goals, in that the definition of "best interest of the corporation" is specified to include those impacts. Some states require the corporation to have "Public Benefit Corporation" or "PBC" in its name (or a similar designation), while others allow any prefix allowed by a corporation (such as Corp. or Inc.), but require that shareholders, investors, and other parties be informed that the company is a public benefit corporation.
- Professional corporation (PC or P.C.): those corporate entities for which many corporation statutes make special provision, regulating the use of the corporate form by licensed professionals such as attorneys, architects, accountants, and doctors.
Nonprofit:
- Nonprofit corporation: a corporation whose primary purpose is to serve a social goal instead of producing a profit for shareholders. As such, nonprofit corporations do not have shareholders but may still have directors and officers which still enjoy limited liability. The naming conventions for nonprofit corporations vary, with naming requirements similar to those of other corporate entities, with some states forbidding names that might mislead the public. Nonprofit corporations are generally divided into three subcategories:
- Public-benefit nonprofit corporation: a nonprofit corporation formed for the purpose of benefitting the public at large, such as charities, educational and research institutions, and hospitals.
- Mutual-benefit nonprofit corporation: a nonprofit corporation formed for the purpose of benefitting its members, such as unions, professional or homeowner's associations, and social clubs.
- Religious corporation: a nonprofit corporation formed for the purpose of practicing or proselytizing a religion, such as an organized congregation or missionary organization.
Cooperatives:
- Cooperative (Co-Op, Coop, or CP): a for-profit entity owned and democratically operated by a group of people who share a common economic goal, such as worker cooperatives, agricultural cooperatives, or a utility cooperatives. In most states, a cooperative must have a signifier in its name indicating that it is a cooperative, such as coop, co-op, CP, or cooperative.
Others:
- Doing Business As (DBA or Fictitious Name): a business name used by a person or entity that is different from the person's or entity's true legal name. DBAs are not separate entities and do not shield the person or entity who uses the DBA as a business name from liability for debts or lawsuits. Filing requirements vary and are not permitted for some types of businesses or professional practices.
See also:
- ISO 20275
- List of official business registers
- "Company Extensions and Security Identifiers". CorporateInformation.com. The Winthrop Corporation.
Marketing including Types of Marketing Companies
- YouTube: 6 HIGHLY EFFECTIVE Marketing Tactics To Promote A Product
- YouTube Video: The 4 Ps of The Marketing Mix Simplified
- YouTube Video: The #1 Marketing Strategy To Grow Your Online Business (UPDATED FOR 2022)
Click here for a List of Different Types of Marketing
Marketing is the process of exploring, creating, and delivering value to meet the needs of:
Marketing is typically done by the seller, typically a retailer or manufacturer. Sometimes tasks are contracted to a dedicated marketing firm or advertising agency. More rarely, a trade association or government agency (such as the Agricultural Marketing Service) advertises on behalf of an entire industry or locality, often a specific type of food (e.g. Got Milk?), food from a specific area, or a city or region as a tourism destination.
It is one of the primary components of business management and commerce. Marketers can direct their product to other businesses (B2B marketing) or directly to consumers (B2C marketing). Regardless of who is being marketed to, several factors apply, including the perspective the marketers will use. Known as market orientations, they determine how marketers approach the planning stage of marketing.
The marketing mix, which outlines the specifics of the product and how it will be sold, is affected by the environment surrounding the product, the results of marketing research, and the characteristics of the product's target market. Once these factors are determined, marketers must then decide what methods of promoting the product, including use of coupons and other price inducements.
The term marketing, what is commonly known as attracting customers, incorporates knowledge gained by studying the management of exchange relationships and is the business process of identifying, anticipating and satisfying customers' needs and wants.
Definition:
Marketing is currently defined by the American Marketing Association (AMA) as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large".
However, the definition of marketing has evolved over the years. The AMA reviews this definition and its definition for "marketing research" every three years. The interests of "society at large" were added into the definition in 2008.
The development of the definition may be seen by comparing the 2008 definition with the AMA's 1935 version: "Marketing is the performance of business activities that direct the flow of goods, and services from producers to consumers". The newer definition highlights the increased prominence of other stakeholders in the new conception of marketing.
Recent definitions of marketing place more emphasis on the consumer relationship, as opposed to a pure exchange process. For instance, prolific marketing author and educator, Philip Kotler has evolved his definition of marketing. In 1980, he defined marketing as "satisfying needs and wants through an exchange process", and in 2018 defined it as "the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return".
A related definition, from the sales process engineering perspective, defines marketing as "a set of processes that are interconnected and interdependent with other functions of a business aimed at achieving customer interest and satisfaction".
Some definitions of marketing highlight marketing's ability to produce value to shareholders of the firm as well. In this context, marketing can be defined as "the management process that seeks to maximize returns to shareholders by developing relationships with valued customers and creating a competitive advantage".
For instance, the Chartered Institute of Marketing defines marketing from a customer-centric perspective, focusing on "the management process responsible for identifying, anticipating and satisfying customer requirements profitably".
In the past, marketing practice tended to be seen as a creative industry, which included advertising, distribution and selling, and even today many parts of the marketing process (e.g. product design, art director, brand management, advertising, inbound marketing, copywriting etc.) involve the use of the creative arts. However, because marketing also makes extensive use of the following:
Marketing science has developed a concrete process that can be followed to create a marketing plan.
Concept:
The "marketing concept" proposes that to complete its organizational objectives, an organization should anticipate the needs and wants of potential consumers and satisfy them more effectively than its competitors. This concept originated from Adam Smith's book The Wealth of Nations but would not become widely used until nearly 200 years later.
Marketing and Marketing Concepts are directly related. Given the centrality of customer needs, and wants in marketing, a rich understanding of the following concepts is essential:
Marketing research, conducted for the purpose of new product development or product improvement, is often concerned with identifying the consumer's unmet needs. Customer needs are central to market segmentation which is concerned with dividing markets into distinct groups of buyers on the basis of "distinct needs, characteristics, or behaviors who might require separate products or marketing mixes."
Needs-based segmentation (also known as benefit segmentation) "places the customers' desires at the forefront of how a company designs and markets products or services."
Although needs-based segmentation is difficult to do in practice, it has been proved to be one of the most effective ways to segment a market. In addition, a great deal of advertising and promotion is designed to show how a given product's benefits meet the customer's needs, wants or expectations in a unique way.
B2B and B2C marketing:
The two major segments of marketing are business-to-business (B2B) marketing and business-to-consumer (B2C) marketing.
B2B marketing:
B2B (business-to-business) marketing refers to any marketing strategy or content that is geared towards a business or organization. Any company that sells products or services to other businesses or organizations (vs. consumers) typically uses B2B marketing strategies.
Examples of products sold through B2B marketing include:
The four major categories of B2B product purchasers are:
B2C marketing:
Business-to-consumer marketing, or B2C marketing, refers to the tactics and strategies in which a company promotes its products and services to individual people.
Traditionally, this could refer to individuals shopping for personal products in a broad sense.
More recently the term B2C refers to the online selling of consumer products.
C2B marketing
Consumer-to-business marketing or C2B marketing is a business model where the end consumers create products and services which are consumed by businesses and organizations. It is diametrically opposed to the popular concept of B2C or Business- to- Consumer where the companies make goods and services available to the end consumers.
In this type of business model, businesses profit from consumers' willingness to name their own price or contribute data or marketing to the company, while consumers benefit from flexibility, direct payment, or free or reduced-price products and services. One of the major benefit of this type of business model is that it offers a company a competitive advantage in the market.
C2C marketing:
Customer to customer marketing or C2C marketing represents a market environment where one customer purchases goods from another customer using a third-party business or platform to facilitate the transaction. C2C companies are a new type of model that has emerged with e-commerce technology and the sharing economy.
Differences in B2B and B2C marketing:
The different goals of B2B and B2C marketing lead to differences in the B2B and B2C markets. The main differences in these markets are as follows:
Reasons follow:
Marketing management orientations:
Main article: History of marketing § Orientations or philosophies that inform marketing practice
A marketing orientation has been defined as a "philosophy of business management." or "a corporate state of mind" or as an "organizational culture". Although scholars continue to debate the precise nature of specific concepts that inform marketing practice, the most commonly cited orientations are as follows:
The marketing mix:
Main article: Marketing mix
A marketing mix is a foundational tool used to guide decision making in marketing. The marketing mix represents the basic tools that marketers can use to bring their products or services to the market. They are the foundation of managerial marketing and the marketing plan typically devotes a section to the marketing mix.
The 4Ps:
The traditional marketing mix refers to four broad levels of marketing decision, namely:
Outline follows:
Product
The product aspects of marketing deal with the specifications of the actual goods or services, and how it relates to the end-user's needs and wants. The product element consists of:
The scope of a product generally includes supporting elements such as warranties, guarantees, and support. Branding, a key aspect of the product management, refers to the various methods of communicating a brand identity for the product, brand, or company.
Pricing
This refers to the process of setting a price for a product, including discounts. The price need not be monetary; it can simply be what is exchanged for the product or services, e.g. time, energy, or attention or any sacrifices consumers make in order to acquire a product or service.
The price is the cost that a consumer pays for a product—monetary or not. Methods of setting prices are in the domain of pricing science.
Place (or distribution)
This refers to how the product gets to the customer; the distribution channels and intermediaries such as wholesalers and retailers who enable customers to access products or services in a convenient manner.
This third P has also sometimes been called Place or Placement, referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc. also referring to how the environment in which the product is sold in can affect sales.
Promotion
This includes all aspects of marketing communications:
This fourth P is focused on providing a message to get a response from consumers. The message is designed to persuade or tell a story to create awareness.
Criticisms:
One of the limitations of the 4Ps approach is its emphasis on an inside-out view. An inside-out approach is the traditional planning approach where the organization identifies its desired goals and objectives, which are often based around what has always been done.
Marketing's task then becomes one of "selling" the organization's products and messages to the "outside" or external stakeholders. In contrast, an outside-in approach first seeks to understand the needs and wants of the consumer.
From a model-building perspective, the 4 Ps has attracted a number of criticisms. Well-designed models should exhibit clearly defined categories that are mutually exclusive, with no overlap.
Yet, the 4 Ps model has extensive overlapping problems. Several authors stress the hybrid nature of the fourth P, mentioning the presence of two important dimensions, "communication" (general and informative communications such as public relations and corporate communications) and "promotion" (persuasive communications such as advertising and direct selling).
Certain marketing activities, such as personal selling, may be classified as either promotion or as part of the place (i.e., distribution) element. Some pricing tactics, such as promotional pricing, can be classified as price variables or promotional variables and, therefore, also exhibit some overlap.
Other important criticisms include that the marketing mix lacks a strategic framework and is, therefore, unfit to be a planning instrument, particularly when uncontrollable, external elements are an important aspect of the marketing environment.
Modifications and extensions:
To overcome the deficiencies of the 4P model, some authors have suggested extensions or modifications to the original model. Extensions of the four P's are often included in cases such as services marketing where unique characteristics (i.e. intangibility, perishability, heterogeneity and the inseparability of production and consumption) warrant additional consideration factors.
Other extensions have been found necessary for retail marketing, industrial marketing, and internet marketing include "people", "process", and "physical evidence" and are often applied in the case of services marketing.
Other extensions have been found necessary in retail marketing, industrial marketing and internet marketing.
The 4Cs:
In response to environmental and technological changes in marketing, as well as criticisms towards the 4Ps approach, the 4Cs has emerged as a modern marketing mix model.
Outline: Consumer (or client)
The consumer refers to the person or group that will acquire the product. This aspect of the model focuses on fulfilling the wants or needs of the consumer.
Cost:
Cost refers to what is exchanged in return for the product. Cost mainly consists of the monetary value of the product. Cost also refers to anything else the consumer must sacrifice to attain the product, such as time or money spent on transportation to acquire the product.
Convenience:
Like "Place" in the 4Ps model, convenience refers to where the product will be sold. This, however, not only refers to physical stores but also whether the product is available in person or online. The convenience aspect emphasizes making it as easy as possible for the consumer to attain the product, thus making them more likely to do so.
Communication:
Like "Promotion" in the 4Ps model, communication refers to how consumers find out about a product. Unlike promotion, communication not only refers to the one-way communication of advertising, but also the two-way communication available through social media.
Environment:
Main article: Market environment
The term "marketing environment" relates to all of the factors (whether internal, external, direct or indirect) that affect a firm's marketing decision-making/planning. A firm's marketing environment consists of three main areas, which are:
Research:
Main article: Marketing research
Marketing research is a systematic process of analyzing data that involves conducting research to support marketing activities and the statistical interpretation of data into information. This information is then used by managers to plan marketing activities, gauge the nature of a firm's marketing environment and to attain information from suppliers.
A distinction should be made between marketing research and market research. Market research involves gathering information about a particular target market. As an example, a firm may conduct research in a target market, after selecting a suitable market segment. In contrast, marketing research relates to all research conducted within marketing.
Market research is a subset of marketing research. (Avoiding the word "consumer", which shows up in both, market research is about distribution, while marketing research encompasses distribution, advertising effectiveness, and salesforce effectiveness).
The stages of research include:
Segmentation:
Main article: Market segmentation
Market segmentation consists of taking the total heterogeneous market for a product and dividing it into several sub-markets or segments, each of which tends to be homogeneous in all significant aspects.
The process is conducted for two main purposes: better allocation of a firm's finite resources and to better serve the more diversified tastes of contemporary consumers. A firm only possesses a certain amount of resources. Thus, it must make choices (and appreciate the related costs) in servicing specific groups of consumers. Moreover, with more diversity in the tastes of modern consumers, firms are noting the benefit of servicing a multiplicity of new markets.
Market segmentation can be defined in terms of the STP acronym, meaning Segmentation, Targeting, and Positioning.
Segmentation involves the initial splitting up of consumers into persons of like needs/wants/tastes. Commonly used criteria include:
Once a segment has been identified to target, a firm must ascertain whether the segment is beneficial for them to service. The DAMP acronym is used as criteria to gauge the viability of a target market. The elements of DAMP are:
The next step in the targeting process is the level of differentiation involved in a segment serving. Three modes of differentiation exist, which are commonly applied by firms. These are:
Positioning concerns how to position a product in the minds of consumers and inform what attributes differentiate it from the competitor's products. A firm often performs this by producing a perceptual map, which denotes similar products produced in the same industry according to how consumers perceive their price and quality.
From a product's placing on the map, a firm would tailor its marketing communications to meld with the product's perception among consumers and its position among competitors' offering.
Promotional mix:
See also: Integrated marketing communications and Promotional mix
The promotional mix outlines how a company will market its product. It consists of five tools: personal selling, sales promotion, public relations, advertising and social media:
The marketing plan:
Main article: Marketing plan
The area of marketing planning involves forging a plan for a firm's marketing activities. A marketing plan can also pertain to a specific product, as well as to an organization's overall marketing strategy.
An organization's marketing planning process is derived from its overall business strategy. Thus, when top management is devising the firm's strategic direction/mission, the intended marketing activities are incorporated into this plan.
Outline of the marketing plan:
Within the overall strategic marketing plan, the stages of the process are listed as thus:
Levels of marketing objectives within an organization:
As stated previously, the senior management of a firm would formulate a general business strategy for a firm. However, this general business strategy would be interpreted and implemented in different contexts throughout the firm.
At the corporate level, marketing objectives are typically broad-based in nature, and pertain to the general vision of the firm in the short, medium or long-term. As an example, if one pictures a group of companies (or a conglomerate), top management may state that sales for the group should increase by 25% over a ten-year period.
A strategic business unit (SBU) is a subsidiary within a firm, which participates within a given market/industry. The SBU would embrace the corporate strategy, and attune it to its own particular industry. For instance, an SBU may partake in the sports goods industry. It thus would ascertain how it would attain additional sales of sports goods, in order to satisfy the overall business strategy.
The functional level relates to departments within the SBUs, such as marketing, finance, HR, production, etc. The functional level would adopt the SBU's strategy and determine how to accomplish the SBU's own objectives in its market. To use the example of the sports goods industry again, the marketing department would draw up marketing plans, strategies and communications to help the SBU achieve its marketing aims.
Product life cycle:
Further information: Product life-cycle management (marketing)
The product life cycle (PLC) is a tool used by marketing managers to gauge the progress of a product, especially relating to sales or revenue accrued over time. The PLC is based on a few key assumptions, including:
In the introduction stage, a product is launched onto the market. To stimulate the growth of sales/revenue, use of advertising may be high, in order to heighten awareness of the product in question.
During the growth stage, the product's sales/revenue is increasing, which may stimulate more marketing communications to sustain sales. More entrants enter into the market, to reap the apparent high profits that the industry is producing.
When the product hits maturity, its starts to level off, and an increasing number of entrants to a market produce price falls for the product. Firms may use sales promotions to raise sales.
During decline, demand for a good begins to taper off, and the firm may opt to discontinue the manufacture of the product. This is so, if revenue for the product comes from efficiency savings in production, over actual sales of a good/service. However, if a product services a niche market, or is complementary to another product, it may continue the manufacture of the product, despite a low level of sales/revenue being accrued.
See also:
Main article: Outline of marketing
Types of marketing
Marketing orientations or philosophies
Marketing is the process of exploring, creating, and delivering value to meet the needs of:
- target market in terms of goods and services;
- potentially including selection of a target audience;
- selection of certain attributes or themes to emphasize in advertising;
- operation of advertising campaigns;
- attendance at trade shows and public events;
- design of products and packaging attractive to buyers;
- defining the terms of sale, such as price, discounts, warranty, and return policy;
- product placement in media or with people believed to influence the buying habits of others;
- agreements with:
- retailers,
- wholesale distributors,
- or resellers;
- and attempts to create awareness of, loyalty to, and positive feelings about a brand.
Marketing is typically done by the seller, typically a retailer or manufacturer. Sometimes tasks are contracted to a dedicated marketing firm or advertising agency. More rarely, a trade association or government agency (such as the Agricultural Marketing Service) advertises on behalf of an entire industry or locality, often a specific type of food (e.g. Got Milk?), food from a specific area, or a city or region as a tourism destination.
It is one of the primary components of business management and commerce. Marketers can direct their product to other businesses (B2B marketing) or directly to consumers (B2C marketing). Regardless of who is being marketed to, several factors apply, including the perspective the marketers will use. Known as market orientations, they determine how marketers approach the planning stage of marketing.
The marketing mix, which outlines the specifics of the product and how it will be sold, is affected by the environment surrounding the product, the results of marketing research, and the characteristics of the product's target market. Once these factors are determined, marketers must then decide what methods of promoting the product, including use of coupons and other price inducements.
The term marketing, what is commonly known as attracting customers, incorporates knowledge gained by studying the management of exchange relationships and is the business process of identifying, anticipating and satisfying customers' needs and wants.
Definition:
Marketing is currently defined by the American Marketing Association (AMA) as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large".
However, the definition of marketing has evolved over the years. The AMA reviews this definition and its definition for "marketing research" every three years. The interests of "society at large" were added into the definition in 2008.
The development of the definition may be seen by comparing the 2008 definition with the AMA's 1935 version: "Marketing is the performance of business activities that direct the flow of goods, and services from producers to consumers". The newer definition highlights the increased prominence of other stakeholders in the new conception of marketing.
Recent definitions of marketing place more emphasis on the consumer relationship, as opposed to a pure exchange process. For instance, prolific marketing author and educator, Philip Kotler has evolved his definition of marketing. In 1980, he defined marketing as "satisfying needs and wants through an exchange process", and in 2018 defined it as "the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return".
A related definition, from the sales process engineering perspective, defines marketing as "a set of processes that are interconnected and interdependent with other functions of a business aimed at achieving customer interest and satisfaction".
Some definitions of marketing highlight marketing's ability to produce value to shareholders of the firm as well. In this context, marketing can be defined as "the management process that seeks to maximize returns to shareholders by developing relationships with valued customers and creating a competitive advantage".
For instance, the Chartered Institute of Marketing defines marketing from a customer-centric perspective, focusing on "the management process responsible for identifying, anticipating and satisfying customer requirements profitably".
In the past, marketing practice tended to be seen as a creative industry, which included advertising, distribution and selling, and even today many parts of the marketing process (e.g. product design, art director, brand management, advertising, inbound marketing, copywriting etc.) involve the use of the creative arts. However, because marketing also makes extensive use of the following:
- social sciences,
- psychology,
- sociology,
- mathematics,
- economics,
- anthropology and neuroscience,
- the profession is now widely recognized as a science.
Marketing science has developed a concrete process that can be followed to create a marketing plan.
Concept:
The "marketing concept" proposes that to complete its organizational objectives, an organization should anticipate the needs and wants of potential consumers and satisfy them more effectively than its competitors. This concept originated from Adam Smith's book The Wealth of Nations but would not become widely used until nearly 200 years later.
Marketing and Marketing Concepts are directly related. Given the centrality of customer needs, and wants in marketing, a rich understanding of the following concepts is essential:
- Needs: Something necessary for people to live a healthy, stable and safe life. When needs remain unfulfilled, there is a clear adverse outcome: a dysfunction or death. Needs can be objective and physical, such as the need for food, water, and shelter; or subjective and psychological, such as the need to belong to a family or social group and the need for self-esteem.
- Wants: Something that is desired, wished for or aspired to. Wants are not essential for basic survival and are often shaped by culture or peer-groups.
- Demands: When needs and wants are backed by the ability to pay, they have the potential to become economic demands.
Marketing research, conducted for the purpose of new product development or product improvement, is often concerned with identifying the consumer's unmet needs. Customer needs are central to market segmentation which is concerned with dividing markets into distinct groups of buyers on the basis of "distinct needs, characteristics, or behaviors who might require separate products or marketing mixes."
Needs-based segmentation (also known as benefit segmentation) "places the customers' desires at the forefront of how a company designs and markets products or services."
Although needs-based segmentation is difficult to do in practice, it has been proved to be one of the most effective ways to segment a market. In addition, a great deal of advertising and promotion is designed to show how a given product's benefits meet the customer's needs, wants or expectations in a unique way.
B2B and B2C marketing:
The two major segments of marketing are business-to-business (B2B) marketing and business-to-consumer (B2C) marketing.
B2B marketing:
B2B (business-to-business) marketing refers to any marketing strategy or content that is geared towards a business or organization. Any company that sells products or services to other businesses or organizations (vs. consumers) typically uses B2B marketing strategies.
Examples of products sold through B2B marketing include:
- Major equipment
- Accessory equipment
- Raw materials
- Component parts
- Processed materials
- Supplies
- Venues
- Business services
The four major categories of B2B product purchasers are:
- Producers- use products sold by B2B marketing to make their own goods (e.g.: Mattel buying plastics to make toys)
- Resellers- buy B2B products to sell through retail or wholesale establishments (e.g.: Walmart buying vacuums to sell in stores)
- Governments- buy B2B products for use in government projects (e.g.: purchasing weather monitoring equipment for a wastewater treatment plant)
- Institutions- use B2B products to continue operation (e.g.: schools buying printers for office use)
B2C marketing:
Business-to-consumer marketing, or B2C marketing, refers to the tactics and strategies in which a company promotes its products and services to individual people.
Traditionally, this could refer to individuals shopping for personal products in a broad sense.
More recently the term B2C refers to the online selling of consumer products.
C2B marketing
Consumer-to-business marketing or C2B marketing is a business model where the end consumers create products and services which are consumed by businesses and organizations. It is diametrically opposed to the popular concept of B2C or Business- to- Consumer where the companies make goods and services available to the end consumers.
In this type of business model, businesses profit from consumers' willingness to name their own price or contribute data or marketing to the company, while consumers benefit from flexibility, direct payment, or free or reduced-price products and services. One of the major benefit of this type of business model is that it offers a company a competitive advantage in the market.
C2C marketing:
Customer to customer marketing or C2C marketing represents a market environment where one customer purchases goods from another customer using a third-party business or platform to facilitate the transaction. C2C companies are a new type of model that has emerged with e-commerce technology and the sharing economy.
Differences in B2B and B2C marketing:
The different goals of B2B and B2C marketing lead to differences in the B2B and B2C markets. The main differences in these markets are as follows:
- demand,
- purchasing volume,
- number of customers,
- customer concentration,
- distribution,
- buying nature,
- buying influences,
- negotiations,
- reciprocity,
- leasing and promotional methods.
Reasons follow:
- Demand: B2B demand is derived because businesses buy products based on how much demand there is for the final consumer product. Businesses buy products based on customer's wants and needs. B2C demand is primarily because customers buy products based on their own wants and needs.
- Purchasing volume: Businesses buy products in large volumes to distribute to consumers. Consumers buy products in smaller volumes suitable for personal use.[4]
- Number of customers: There are relatively fewer businesses to market to than direct consumers.
- Customer concentration: Businesses that specialize in a particular market tend to be geographically concentrated while customers that buy products from these businesses are not concentrated.
- Distribution: B2B products pass directly from the producer of the product to the business while B2C products must additionally go through a wholesaler or retailer.
- Buying nature: B2B purchasing is a formal process done by professional buyers and sellers, while B2C purchasing is informal.
- Buying influences: B2B purchasing is influenced by multiple people in various departments such as quality control, accounting, and logistics while B2C marketing is only influenced by the person making the purchase and possibly a few others.
- Negotiations: In B2B marketing, negotiating for lower prices or added benefits is commonly accepted while in B2C marketing (particularly in Western cultures) prices are fixed.
- Reciprocity: Businesses tend to buy from businesses they sell to. For example, a business that sells printer ink is more likely to buy office chairs from a supplier that buys the business's printer ink. In B2C marketing, this does not occur because consumers are not also selling products.
- Leasing: Businesses tend to lease expensive items while consumers tend to save up to buy expensive items.
- Promotional methods: In B2B marketing, the most common promotional method is personal selling. B2C marketing mostly uses sales promotion, public relations, advertising, and social media.
Marketing management orientations:
Main article: History of marketing § Orientations or philosophies that inform marketing practice
A marketing orientation has been defined as a "philosophy of business management." or "a corporate state of mind" or as an "organizational culture". Although scholars continue to debate the precise nature of specific concepts that inform marketing practice, the most commonly cited orientations are as follows:
- Product concept: mainly concerned with the quality of its product. It has largely been supplanted by the marketing orientation, except for haute couture and arts marketing.
- Production concept: specializes in producing as much as possible of a given product or service in order to achieve economies of scale or economies of scope. It dominated marketing practice from the 1860s to the 1930s, yet can still be found in some companies or industries. Specifically, Kotler and Armstrong note that the production philosophy is "one of the oldest philosophies that guides sellers... [and] is still useful in some situations."
- Selling concept: focuses on the selling/promotion of the firm's existing products, rather than developing new products to satisfy unmet needs or wants primarily through promotion and direct sales techniques, largely for "unsought goods" in industrial companies. A 2011 meta analyses found that the factors with the greatest impact on sales performance are a salesperson's sales related knowledge (market segments, presentation skills, conflict resolution, and products), degree of adaptiveness, role clarity, cognitive aptitude, motivation and interest in a sales role).
- Marketing concept: This is the most common concept used in contemporary marketing, and is a customer-centric approach based on products that suit new consumer tastes. These firm engage in extensive market research, use R&D (Research & Development), and then use promotion techniques. The marketing orientation includes:
- Customer orientation: A firm in the market economy can survive by producing goods that people are willing and able to buy. Consequently, ascertaining consumer demand is vital for a firm's future viability and even existence as a going concern.
- Organizational orientation: The marketing department is of prime importance within the functional level of an organization. Information from the marketing department is used to guide the actions of a company's other departments. A marketing department could ascertain (via marketing research) that consumers desired a new type of product, or a new usage for an existing product. With this in mind, the marketing department would inform the R&D department to create a prototype of a product/service based on consumers' new desires. The production department would then start to manufacture the product. The finance department may oppose required capital expenditures since it could undermine a healthy cash flow for the organization.
- Societal marketing concept: Social responsibility that goes beyond satisfying customers and providing superior value embraces societal stakeholders such as employees, customers, and local communities. Companies that adopt this perspective typically practice triple bottom line reporting and publish financial, social and environmental impact reports. Sustainable marketing or green marketing is an extension of societal marketing.
The marketing mix:
Main article: Marketing mix
A marketing mix is a foundational tool used to guide decision making in marketing. The marketing mix represents the basic tools that marketers can use to bring their products or services to the market. They are the foundation of managerial marketing and the marketing plan typically devotes a section to the marketing mix.
The 4Ps:
The traditional marketing mix refers to four broad levels of marketing decision, namely:
- product,
- price,
- promotion,
- and place.
Outline follows:
Product
The product aspects of marketing deal with the specifications of the actual goods or services, and how it relates to the end-user's needs and wants. The product element consists of:
- product design,
- new product innovation,
- branding,
- packaging,
- labeling.
The scope of a product generally includes supporting elements such as warranties, guarantees, and support. Branding, a key aspect of the product management, refers to the various methods of communicating a brand identity for the product, brand, or company.
Pricing
This refers to the process of setting a price for a product, including discounts. The price need not be monetary; it can simply be what is exchanged for the product or services, e.g. time, energy, or attention or any sacrifices consumers make in order to acquire a product or service.
The price is the cost that a consumer pays for a product—monetary or not. Methods of setting prices are in the domain of pricing science.
Place (or distribution)
This refers to how the product gets to the customer; the distribution channels and intermediaries such as wholesalers and retailers who enable customers to access products or services in a convenient manner.
This third P has also sometimes been called Place or Placement, referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc. also referring to how the environment in which the product is sold in can affect sales.
Promotion
This includes all aspects of marketing communications:
- advertising,
- sales promotion,
- including promotional education,
- public relations,
- personal selling,
- product placement,
- branded entertainment,
- event marketing,
- trade shows,
- and exhibitions.
This fourth P is focused on providing a message to get a response from consumers. The message is designed to persuade or tell a story to create awareness.
Criticisms:
One of the limitations of the 4Ps approach is its emphasis on an inside-out view. An inside-out approach is the traditional planning approach where the organization identifies its desired goals and objectives, which are often based around what has always been done.
Marketing's task then becomes one of "selling" the organization's products and messages to the "outside" or external stakeholders. In contrast, an outside-in approach first seeks to understand the needs and wants of the consumer.
From a model-building perspective, the 4 Ps has attracted a number of criticisms. Well-designed models should exhibit clearly defined categories that are mutually exclusive, with no overlap.
Yet, the 4 Ps model has extensive overlapping problems. Several authors stress the hybrid nature of the fourth P, mentioning the presence of two important dimensions, "communication" (general and informative communications such as public relations and corporate communications) and "promotion" (persuasive communications such as advertising and direct selling).
Certain marketing activities, such as personal selling, may be classified as either promotion or as part of the place (i.e., distribution) element. Some pricing tactics, such as promotional pricing, can be classified as price variables or promotional variables and, therefore, also exhibit some overlap.
Other important criticisms include that the marketing mix lacks a strategic framework and is, therefore, unfit to be a planning instrument, particularly when uncontrollable, external elements are an important aspect of the marketing environment.
Modifications and extensions:
To overcome the deficiencies of the 4P model, some authors have suggested extensions or modifications to the original model. Extensions of the four P's are often included in cases such as services marketing where unique characteristics (i.e. intangibility, perishability, heterogeneity and the inseparability of production and consumption) warrant additional consideration factors.
Other extensions have been found necessary for retail marketing, industrial marketing, and internet marketing include "people", "process", and "physical evidence" and are often applied in the case of services marketing.
Other extensions have been found necessary in retail marketing, industrial marketing and internet marketing.
The 4Cs:
In response to environmental and technological changes in marketing, as well as criticisms towards the 4Ps approach, the 4Cs has emerged as a modern marketing mix model.
Outline: Consumer (or client)
The consumer refers to the person or group that will acquire the product. This aspect of the model focuses on fulfilling the wants or needs of the consumer.
Cost:
Cost refers to what is exchanged in return for the product. Cost mainly consists of the monetary value of the product. Cost also refers to anything else the consumer must sacrifice to attain the product, such as time or money spent on transportation to acquire the product.
Convenience:
Like "Place" in the 4Ps model, convenience refers to where the product will be sold. This, however, not only refers to physical stores but also whether the product is available in person or online. The convenience aspect emphasizes making it as easy as possible for the consumer to attain the product, thus making them more likely to do so.
Communication:
Like "Promotion" in the 4Ps model, communication refers to how consumers find out about a product. Unlike promotion, communication not only refers to the one-way communication of advertising, but also the two-way communication available through social media.
Environment:
Main article: Market environment
The term "marketing environment" relates to all of the factors (whether internal, external, direct or indirect) that affect a firm's marketing decision-making/planning. A firm's marketing environment consists of three main areas, which are:
- The macro-environment (Macromarketing), over which a firm holds little control, consists of a variety of external factors that manifest on a large (or macro) scale. These include: economic, social, political and technological factors. A common method of assessing a firm's macro-environment is via a PESTLE (Political, Economic, Social, Technological, Legal, Ecological) analysis. Within a PESTLE analysis, a firm would analyze:
- national political issues,
- culture and climate,
- key macroeconomic conditions,
- health and indicators such as:
- economic growth,
- inflation,
- unemployment
- social trends/attitudes,
- and the nature of technology's impact on its society
- and the business processes within the society.
- The micro-environment, over which a firm holds a greater amount (though not necessarily total) control, typically includes:
- In contrast to the macro-environment, an organization holds a greater (though not complete) degree of control over these factors.
- The internal environment, which includes the factors inside of the company itself A firm's internal environment consists of:
- Labor,
- Inventory,
- Company Policy,
- Logistics,
- Budget,
- and Capital Assets.
Research:
Main article: Marketing research
Marketing research is a systematic process of analyzing data that involves conducting research to support marketing activities and the statistical interpretation of data into information. This information is then used by managers to plan marketing activities, gauge the nature of a firm's marketing environment and to attain information from suppliers.
A distinction should be made between marketing research and market research. Market research involves gathering information about a particular target market. As an example, a firm may conduct research in a target market, after selecting a suitable market segment. In contrast, marketing research relates to all research conducted within marketing.
Market research is a subset of marketing research. (Avoiding the word "consumer", which shows up in both, market research is about distribution, while marketing research encompasses distribution, advertising effectiveness, and salesforce effectiveness).
The stages of research include:
- Define the problem
- Plan research
- Research
- Interpret data
- Implement findings
Segmentation:
Main article: Market segmentation
Market segmentation consists of taking the total heterogeneous market for a product and dividing it into several sub-markets or segments, each of which tends to be homogeneous in all significant aspects.
The process is conducted for two main purposes: better allocation of a firm's finite resources and to better serve the more diversified tastes of contemporary consumers. A firm only possesses a certain amount of resources. Thus, it must make choices (and appreciate the related costs) in servicing specific groups of consumers. Moreover, with more diversity in the tastes of modern consumers, firms are noting the benefit of servicing a multiplicity of new markets.
Market segmentation can be defined in terms of the STP acronym, meaning Segmentation, Targeting, and Positioning.
Segmentation involves the initial splitting up of consumers into persons of like needs/wants/tastes. Commonly used criteria include:
- Geographic (such as a country, region, city, town)
- Psychographic (e.g. personality traits or lifestyle traits which influence consumer behaviour)
- Demographic (e.g. age, gender, socio-economic class, education)
- Gender
- Income
- Life-Cycle (e.g. Baby Boomer, Generation X, Millennial, Generation Z)
- Lifestyle (e.g. tech savvy, active)
- Behavioral (e.g. brand loyalty, usage rate)
Once a segment has been identified to target, a firm must ascertain whether the segment is beneficial for them to service. The DAMP acronym is used as criteria to gauge the viability of a target market. The elements of DAMP are:
- Discernable – how a segment can be differentiated from other segments.
- Accessible – how a segment can be accessed via Marketing Communications produced by a firm
- Measurable – can the segment be quantified and its size determined?
- Profitable – can a sufficient return on investment be attained from a segment's servicing?
The next step in the targeting process is the level of differentiation involved in a segment serving. Three modes of differentiation exist, which are commonly applied by firms. These are:
- Undifferentiated – where a company produces a like product for all of a market segment
- Differentiated – in which a firm produced slight modifications of a product within a segment
- Niche – in which an organization forges a product to satisfy a specialized target market
Positioning concerns how to position a product in the minds of consumers and inform what attributes differentiate it from the competitor's products. A firm often performs this by producing a perceptual map, which denotes similar products produced in the same industry according to how consumers perceive their price and quality.
From a product's placing on the map, a firm would tailor its marketing communications to meld with the product's perception among consumers and its position among competitors' offering.
Promotional mix:
See also: Integrated marketing communications and Promotional mix
The promotional mix outlines how a company will market its product. It consists of five tools: personal selling, sales promotion, public relations, advertising and social media:
- Personal selling involves a presentation given by a salesperson to an individual or a group of potential customers. It enables two-way communication and relationship building, and is most commonly seen in business-to-business marketing but can also be found in business-to-consumer marketing (e.g.: selling cars at a dealership)
- Sales promotion involves short-term incentives to encourage the buying of products. Examples of these incentives include free samples, contests, premiums, trade shows, giveaways, coupons, sweepstakes and games. Depending on the incentive, one or more of the other elements of the promotional mix may be used in conjunction with sales promotion to inform customers of the incentives.
- Public relations is the use of media tools to promote and monitor for a positive view of a company or product in the public's eye. The goal is to either sustain a positive opinion or lessen or change a negative opinion. It can include:
- interviews,
- speeches/presentations,
- corporate literature,
- social media,
- news releases
- and special events.
- Advertising occurs when a firm directly pays a media channel, directly via an in-house agency[ or via an advertising agency or media buying service, to publicize its product, service or message. Common examples of advertising media include:
- TV
- Radio
- Magazines
- Online
- Billboards
- Event sponsorship
- Direct mail
- Transit ads
- Social media is used to facilitate two-way communication between companies and their customers. Outlets such as the following allow brands to start a conversation with regular and prospective customers:
- Viral marketing can be greatly facilitated by social media and if successful, allows key marketing messages and content in reaching a large number of target audiences within a short time frame. These platforms can also house advertising and public relations content.
The marketing plan:
Main article: Marketing plan
The area of marketing planning involves forging a plan for a firm's marketing activities. A marketing plan can also pertain to a specific product, as well as to an organization's overall marketing strategy.
An organization's marketing planning process is derived from its overall business strategy. Thus, when top management is devising the firm's strategic direction/mission, the intended marketing activities are incorporated into this plan.
Outline of the marketing plan:
Within the overall strategic marketing plan, the stages of the process are listed as thus:
- Executive Summary
- Current marketing situation
- Threats and opportunities analysis
- Objectives and issues
- Marketing Strategy
- Action programs
- Budgets
- Control
Levels of marketing objectives within an organization:
As stated previously, the senior management of a firm would formulate a general business strategy for a firm. However, this general business strategy would be interpreted and implemented in different contexts throughout the firm.
At the corporate level, marketing objectives are typically broad-based in nature, and pertain to the general vision of the firm in the short, medium or long-term. As an example, if one pictures a group of companies (or a conglomerate), top management may state that sales for the group should increase by 25% over a ten-year period.
A strategic business unit (SBU) is a subsidiary within a firm, which participates within a given market/industry. The SBU would embrace the corporate strategy, and attune it to its own particular industry. For instance, an SBU may partake in the sports goods industry. It thus would ascertain how it would attain additional sales of sports goods, in order to satisfy the overall business strategy.
The functional level relates to departments within the SBUs, such as marketing, finance, HR, production, etc. The functional level would adopt the SBU's strategy and determine how to accomplish the SBU's own objectives in its market. To use the example of the sports goods industry again, the marketing department would draw up marketing plans, strategies and communications to help the SBU achieve its marketing aims.
Product life cycle:
Further information: Product life-cycle management (marketing)
The product life cycle (PLC) is a tool used by marketing managers to gauge the progress of a product, especially relating to sales or revenue accrued over time. The PLC is based on a few key assumptions, including:
- A given product would possess introduction, growth, maturity, and decline stage
- No product lasts perpetually on the market
- A firm must employ differing strategies, according to where a product is on the PLC
In the introduction stage, a product is launched onto the market. To stimulate the growth of sales/revenue, use of advertising may be high, in order to heighten awareness of the product in question.
During the growth stage, the product's sales/revenue is increasing, which may stimulate more marketing communications to sustain sales. More entrants enter into the market, to reap the apparent high profits that the industry is producing.
When the product hits maturity, its starts to level off, and an increasing number of entrants to a market produce price falls for the product. Firms may use sales promotions to raise sales.
During decline, demand for a good begins to taper off, and the firm may opt to discontinue the manufacture of the product. This is so, if revenue for the product comes from efficiency savings in production, over actual sales of a good/service. However, if a product services a niche market, or is complementary to another product, it may continue the manufacture of the product, despite a low level of sales/revenue being accrued.
See also:
Main article: Outline of marketing
- Account-based marketing
- Advertising
- Advertising management
- Affinity marketing
- American business historyB2B Marketing
- Brand awareness
- Consumer confusion
- Consumer behaviour
- Content marketing
- Database marketing
- Demand chain
- Email remarketing
- Family in advertising
- Guerrilla Marketing
- History of marketing
- Internet marketing
- List of marketing terms
- Loyalty marketing
- Macromarketing
- Marketing management
- Marketing mix
- Marketing science
- Marketing strategy
- Micromarketing
- Media manipulation
- Meta marketing
- Mobile marketing
- Multicultural marketing
- Product management
- Product marketing
- Production orientation
- Public Sector Marketing
- Real-time marketing
- Return on marketing investment (ROMI)
- Relationship marketing
- Search Engine Marketing
- Services marketing
- Smarketing
- Societal marketing
- Social media marketing
- Sustainable market orientation
- Visual marketing
- Viral Marketing
- Web marketing
- Word-of-mouth marketing
Types of marketing
- Agricultural marketing
- Business marketing and industrial marketing
- Destination marketing
- Global marketing
- Influencer marketing
- Relationship marketing
- Services marketing
- Social marketing
Marketing orientations or philosophies
- Marketing orientation
- Production orientation
- Selling orientation
- Socially responsible marketing and corporate social responsibility
- Relationship marketing and customer relationship management
Digital Marketing
- YouTube Video: Digital Marketing In 5 Minutes | What Is Digital Marketing? | Learn Digital Marketing | Simplilearn
- YouTube Video: Digital Marketing Course Part - 1 🔥| Digital Marketing Tutorial For Beginners | Simplilearn
- YouTube Video: Digital Marketing Course Part - 2 🔥 | Digital Marketing Tutorial For Beginners | Simplilearn
* -- Expands on above Image from "Effective Digital Marketing for Small Businesses is More than a Website" by Fortune Marketing:
Lately, in speaking with small business owners I’m hearing a pretty common theme about their marketing frustrations and plans.
The owner knows the business needs to be online to generate leads from online marketing initiatives, they understand that a website is crucial to those efforts, and that’s where the conversation screeches to an abrupt halt. “That’s it, right? All I need is a website and my business will suddenly be going gangbusters!” Well, if you look online at the millions of websites out there that have failed, you’ll quickly realize that just having a website isn’t the key to success at all. Not by a longshot.
Building a website and just leaving it to sit there, hoping new customers will magically flock to it, is basically like buying a new, high-performance car, putting one gallon of gas in it, and then never filling it up again. That car is going to run like a champ – until the gas runs out.
Having a total online presence is your company’s marketing fuelThe concept of having a total online presence is where small business owners get confused and frustrated with trying to make online/digital marketing work for them.
The fuel for online marketing success is composed of a number of tactics, but it all starts with content. Content can include a whole range of communication mechanisms such as:
What do I mean by making digital marketing work?
Digital marketing isn’t just about generating leads, although this is the most important aspect of a marketing program for nearly all small businesses. In most situations, getting a direct lead isn’t the typical outcome of successful digital marketing.
The desired outcome should be focused on creating or increasing company awareness, and building engagement on a pre-sale basis (enabling the prospect to opt in for more information, attend a webinar, view a video, etc.)
Today, the consumer is in control of the information they want to see. Interruption, or outbound, marketing is not the most effective ways to reach your market, nor is it the most cost effective.
Think of your customers as being on a journey to solve their problems. On the road to becoming customers, they will go through stages in their process including Know > Like > Trust > Try > Buy > Repeat > Refer during their relationship with your business… or with your competition.
Your customers are looking for you:
The relationship with new customers begins before you have any inkling they’re in the market for what you’re selling. Prospects are learning about your company when they look for your product or services on search engines, social media, word-of-mouth referrals, digital referrals (reviews and ratings), and all the other channels consumers use to find information.
Here’s the deal: Your digital marketing isn’t just about you providing prospective clients the best information about your services once they’re already on your website. Your digital marketing process is all about attracting prospects to your site in the first place! That means you need to show up where people congregate, which primarily means search engines and social media.
Building a great website is only the first step in the digital marketing process. Of course, it’s a vitally important step, but it’s the beginning, not the end game. Once potential customers have found your website, you need to encourage them to stick around because they find value there. I’m not talking about a 10% off coupon for joining your mailing list (although that’s a good tactic). I’m talking about content.
You need to maintain a blog on your website that engages prospects and feeds them information that only you can provide. If you’re sitting there thinking, “No one would read a blog about my business,” then I have a challenge for you:
People are looking for answers to the problems you solve. But if they don’t know how to, or can’t find you, they’re headed to your competition. Your static, never-updated website that provides your phone number and address won’t get you to where you’re answering these questions. It takes consistent, high-quality content addressing the questions your customers have to make your website a digital marketing machine.
That’s what effective content marketing is – the fuel to keep your car running fast and smooth helping you better serve and grow your target market. Digital brochures won’t get the job done, your website should be a living/breathing, 24×7 sales representative for your company, engaging visitors to connect with you and educating them about how your company can solve their problems.
If you’re in a service business (attorney, CPA, electrician, roofers, etc.), look closer at the search results and see how many of them come from directory sites such as Avvo, Angie’s List, Houzz, Yelp, BBB. I’m willing to bet that at least a third, if not more, of the results for common searches in your area (e.g., “best roofer in [your city]”) are from these aggregation sites. These lists are another valuable avenue for you to build a relationship with customers.
So where do you start?:
First, you have to know who you’re targeting (your potential best customers). Then you must know which problems you can solve for these markets and tell the story of why your business is the one they should choose (differentiation and messaging). Then you need a strategy for creating a Total Online Presence that includes your website as the hub of a wheel with spokes that drive customers and prospects to your “digital doorway” – blogs, directory listings, optimized web pages, search engine optimization, email marketing, social media marketing.
Finally, you need analytics and metrics to measure progress and plan for the consistent expansion of your successful efforts.
None of these tactics can stand alone anymore – the digital space is just too competitive to not take care of all the spokes of the wheel.
It never really ends:
So yeah, there’s no, “one and done” in effective small business marketing. Even if you’re doing a great job ranking for the search terms you want and generating high-quality online leads, you can always do better: expanded search terms to rank for, more products and services to promote, new target markets to expand to.
A word of caution, however: Your competition will come after you once they see your success, so you have to keep the tank full in your shiny new car to keep the other guys from catching you.
The good news:
Lest I make you even more frustrated or confused about how to get ahead of your competition online, I have a couple of pieces of good news:
First, you don’t have to be on every social media site, blog three times a week, and run thousands of dollars of digital advertising to get ahead. You need to focus on your strengths, your core target markets, and the channels that make the most sense for your business (there’s a good chance right now that Snapchat probably isn’t one of them).
Do less and do it better, is key to getting off to a good start.
Second, there’s lots of help out there. I’ve discussed how to hire the help you need, but there is no shortage of information online teaching you how to improve your online marketing.
And, I can help you, too. If you’d like to discuss a complete audit of your existing online presence, including a roadmap for what to do next that you can take to anyone to implement, then let’s talk.
February 7, 2018 / Small Business Marketing / By Mark Fortune
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Click here for a List of U.S. Digital Marketing Companies
Digital marketing is the component of marketing that uses the Internet and online-based digital technologies such as desktop computers, mobile phones and other digital media and platforms to promote products and services. Its development during the 1990s and 2000s changed the way brands and businesses use technology for marketing.
As digital platforms became increasingly incorporated into marketing plans and everyday life, and as people increasingly used digital devices instead of visiting physical shops, digital marketing campaigns have become prevalent, employing combinations of the following:
Digital marketing extends to non-Internet channels that provide digital media, such as television, mobile phones (SMS and MMS), callbacks, and on-hold mobile ring tones. The extension to non-Internet channels differentiates digital marketing from online marketing.
History:
Digital marketing effectively began in 1990 when the Archie search engine was created as an index for FTP sites. In the 1980s, the storage capacity of computers was already large enough to store huge volumes of customer information.
Companies started choosing online techniques, such as database marketing, rather than limited list broker. Databases allowed companies to track customers' information more effectively, transforming the relationship between buyer and seller.
In the 1990s, the term digital marketing was coined. With the development of server/client architecture and the popularity of personal computers, Customer Relationship Management (CRM) applications became a significant factor in marketing technology.
Fierce competition forced vendors to include more services into their software, for example, marketing, sales and service applications. Marketers were also able to own online customer data through eCRM software after the Internet was born.
This led to the first clickable banner ad going live in 1994, which was the "You Will" campaign by AT&T and over the first four months of it going live, 44% of all people who saw it clicked on the ad.
In the 2000s, with increasing numbers of Internet users and the birth of the iPhone, customers began searching for products and making decisions about their needs online first, instead of consulting a salesperson, which created a new problem for the marketing department of a company.
In addition, a survey in 2000 in the United Kingdom found that most retailers had not registered their own domain address. These problems encouraged marketers to find new ways to integrate digital technology into market development.
In 2007, marketing automation was developed as a response to the ever-evolving marketing climate. Marketing automation is the process by which software is used to automate conventional marketing processes.
Marketing automation helped companies segment customers, launch multichannel marketing campaigns, and provide personalized information for customers., based on their specific activities. In this way, users' activity (or lack thereof) triggers a personal message that is customized to the user in their preferred platform. However, despite the benefits of marketing automation many companies are struggling to adopt it to their everyday uses correctly.
Digital marketing became more sophisticated in the 2000s and the 2010s, when the proliferation of devices' capable of accessing digital media led to sudden growth.
Statistics produced in 2012 and 2013 showed that digital marketing was still growing.
With the development of social media in the 2000s, such as LinkedIn, Facebook, YouTube and Twitter, consumers became highly dependent on digital electronics in daily lives. Therefore, they expected a seamless user experience across different channels for searching product's information.
The change of customer behavior improved the diversification of marketing technology.
The term "Digital Marketing" was coined in the 1990's. Digital marketing was formally known as and referred to as 'online marketing', 'internet marketing' or 'web marketing'.
Worldwide digital marketing has become the most common used term and took off in the business industry, especially after the year 2013. But in other countries like Italy, digital marketing is still known as web marketing.
Digital media growth was estimated at 4.5 trillion online ads served annually with digital media spend at 48% growth in 2010. An increasing portion of advertising stems from businesses employing Online Behavioural Advertising (OBA) to tailor advertising for internet users, but OBA raises concern of consumer privacy and data protection.
New non-linear marketing approach:
Nonlinear marketing, a type of interactive marketing, is a long-term marketing approach which builds on businesses collecting information about an Internet user's online activities and trying to be visible in multiple areas.
Unlike traditional marketing techniques, which involve direct, one-way messaging to consumers (via print, television, and radio advertising), nonlinear digital marketing strategies are centered on reaching prospective customers across multiple online channels.
Combined with higher consumer knowledge and the demand for more sophisticated consumer offerings, this change has forced many businesses to rethink their outreach strategy and adopt or incorporate omnichannel, nonlinear marketing techniques to maintain sufficient brand exposure, engagement, and reach.
Nonlinear marketing strategies involve efforts to adapt the advertising to different platforms and to tailor the advertising to different individual buyers rather than a large coherent audience.
Tactics may include:
Some studies indicate that consumer responses to traditional marketing approaches are becoming less predictable for businesses. According to a 2018 study, nearly 90% of online consumers in the United States researched products and brands online before visiting the store or making a purchase.
The Global Web Index estimated that in 2018, a little more than 50% of consumers researched products on social media. Businesses often rely on individuals portraying their products in a positive light on social media, and may adapt their marketing strategy to target people with large social media followings in order to generate such comments.
In this manner, businesses can use consumers to advertise their products or services, decreasing the cost for the company.
Brand awareness:
Main article: Brand awareness
One of the key objectives of modern digital marketing is to raise brand awareness, the extent to which customers and the general public are familiar with and recognize a particular brand.
Enhancing brand awareness is important in digital marketing, and marketing in general, because of its impact on brand perception and consumer decision-making. According to the 2015 essay, "Impact of Brand on Consumer Behavior":
"Brand awareness, as one of the fundamental dimensions of brand equity, is often considered to be a prerequisite of consumers’ buying decision, as it represents the main factor for including a brand in the consideration set.
Brand awareness can also influence consumers’ perceived risk assessment and their confidence in the purchase decision, due to familiarity with the brand and its characteristics."
Recent trends show that businesses and digital marketers are prioritizing brand awareness, focusing more on their digital marketing efforts on cultivating brand recognition and recall than in previous years. This is evidenced by a 2019 Content Marketing Institute study, which found that 81% of digital marketers have worked on enhancing brand recognition over the past year.
Another Content Marketing Institute survey revealed 89% of B2B marketers now believe improving brand awareness to be more important than efforts directed at increasing sales.
Increasing brand awareness is a focus of digital marketing strategy for a number of reasons:
Online methods used to build brand awareness:
Digital marketing strategies may include the use of one or more online channels and techniques (omnichannel) to increase brand awareness among consumers.
Building brand awareness may involve such methods/tools as:
Search engine optimization (SEO):
Search engine optimization techniques may be used to improve the visibility of business websites and brand-related content for common industry-related search queries.
The importance of SEO to increase brand awareness is said to correlate with the growing influence of search results and search features like featured snippets, knowledge panels, and local SEO on customer behavior.
Search engine marketing (SEM):
SEM, also known as PPC advertising, involves the purchase of ad space in prominent, visible positions atop search results pages and websites. Search ads have been shown to have a positive impact on brand recognition, awareness and conversions.
Further information: Conversion as a service
33% of searchers who click on paid ads do so because they directly respond to their particular search query.
Social media marketing:
Social media marketing has the characteristics of being in the marketing state and interacting with consumers all the time, emphasizing content and interaction skills. The marketing process needs to be monitored, analyzed, summarized and managed in real-time, and the marketing target needs to be adjusted according to the real-time feedback from the market and consumers.
70% of marketers list increasing brand awareness as their number one goal for marketing on social media platforms. Facebook, Instagram, Twitter, and YouTube are listed as the top platforms currently used by social media marketing teams.
As of 2021, LinkedIn has been added as one of the most-used social media platforms by business leaders for its professional networking capabilities.
Content marketing:
56% of marketers believe personalization content – brand-centered blogs, articles, social updates, videos, landing pages – improves brand recall and engagement.
Developments and strategies:
One of the major changes that occurred in traditional marketing was the "emergence of digital marketing", this led to the reinvention of marketing strategies in order to adapt to this major change in traditional marketing.
As digital marketing is dependent on technology which is ever-evolving and fast-changing, the same features should be expected from digital marketing developments and strategies.
This portion is an attempt to qualify or segregate the notable highlights existing and being used.
To summarize, Pull digital marketing is characterized by consumers actively seeking marketing content while Push digital marketing occurs when marketers send messages without that content being actively sought by the recipients:
Online behavioral advertising:
This is the practice of collecting information about a user's online activity over time, "on a particular device and across different, unrelated websites, in order to deliver advertisements tailored to that user's interests and preferences." Such Advertisements are based on site retargeting are customized based on each user behavior and pattern.
Collaborative Environment:
A collaborative environment can be set up between the organization, the technology service provider, and the digital agencies to optimize effort, resource sharing, reusability and communications.
Additionally, organizations are inviting their customers to help them better understand how to service them. This source of data is called user-generated content. Much of this is acquired via company websites where the organization invites people to share ideas that are then evaluated by other users of the site.
The most popular ideas are evaluated and implemented in some form. Using this method of acquiring data and developing new products can foster the organization's relationship with its customer as well as spawn ideas that would otherwise be overlooked. UGC is low-cost advertising as it is directly from the consumers and can save advertising costs for the organization.
Data-driven advertising:
Users generate a lot of data in every step they take on the path of customer journey and brands can now use that data to activate their known audience with data-driven programmatic media buying.
Without exposing customers' privacy, users' data can be collected from digital channels (e.g.: when the customer visits a website, reads an e-mail, or launches and interact with a brand's mobile app), brands can also collect data from real-world customer interactions, such as brick and mortar stores visits and from CRM and sales engines datasets.
Also known as people-based marketing or addressable media, data-driven advertising is empowering brands to find their loyal customers in their audience and deliver in real time a much more personal communication, highly relevant to each customers' moment and actions.
An important consideration today while deciding on a strategy is that the digital tools have democratized the promotional landscape.
Remarketing:
Remarketing plays a major role in digital marketing. This tactic allows marketers to publish targeted ads in front of an interest category or a defined audience, generally called searchers in web speak, they have either searched for particular products or services or visited a website for some purpose.
Game advertising:
Game ads are advertisements that exist within computer or video games. One of the most common examples of in-game advertising is billboards appearing in sports games. In-game ads also might appear as brand-name products like guns, cars, or clothing that exist as gaming status symbols.
Six principles for building online brand content:
The new digital era has enabled brands to selectively target their customers that may potentially be interested in their brand or based on previous browsing interests. Businesses can now use social media to select the age range, location, gender, and interests of whom they would like their targeted post to be seen.
Furthermore, based on a customer's recent search history they can be ‘followed’ on the internet so they see advertisements from similar brands, products, and services, This allows businesses to target the specific customers that they know and feel will most benefit from their product or service, something that had limited capabilities up until the digital era.
Tourism marketing:
Advanced tourism, responsible and sustainable tourism, social media and online tourism marketing, and geographic information systems. As a broader research field matures and attracts more diverse and in-depth academic research.
Ineffective forms of digital marketing:
Digital marketing activity is still growing across the world according to the headline global marketing index. A study published in September 2018, found that global outlays on digital marketing tactics are approaching $100 billion. Digital media continues to rapidly grow.
While the marketing budgets are expanding, traditional media is declining. Digital media helps brands reach consumers to engage with their product or service in a personalized way.
Five areas, which are outlined as current industry practices that are often ineffective are:
Why these practices are ineffective and some ways around making these aspects effective are discussed surrounding the following points.
1) Prioritizing clicks:
Prioritizing clicks refers to display click ads, although advantageous by being ‘simple, fast and inexpensive’ rates for display ads in 2016 is only 0.10 percent in the United States. This means one in a thousand click ads is relevant therefore having little effect. This displays that marketing companies should not just use click ads to evaluate the effectiveness of display advertisements.
2) Balancing search and display:
Balancing search and display for digital display ads is important. marketers tend to look at the last search and attribute all of the effectiveness of this. This, in turn, disregards other marketing efforts, which establish brand value within the consumer's mind.
ComScore determined through drawing on data online, produced by over one hundred multichannel retailers that digital display marketing poses strengths when compared with or positioned alongside, paid search. This is why it is advised that when someone clicks on a display ad the company opens a landing page, not its home page.
A landing page typically has something to draw the customer in to search beyond this page. Commonly marketers see increased sales among people exposed to a search ad. But the fact of how many people you can reach with a display campaign compared to a search campaign should be considered.
Multichannel retailers have an increased reach if the display is considered in synergy with search campaigns. Overall, both search and display aspects are valued as display campaigns build awareness for the brand so that more people are likely to click on these digital ads when running a search campaign.
3) Understanding Mobiles:
Understanding mobile devices is a significant aspect of digital marketing because smartphones and tablets are now responsible for 64% of the time US consumers are online.
Apps provide a big opportunity as well as challenge for the marketers because firstly the app needs to be downloaded and secondly the person needs to actually use it. This may be difficult as ‘half the time spent on smartphone apps occurs on the individuals single most used app, and almost 85% of their time on the top four rated apps’.
Mobile advertising can assist in achieving a variety of commercial objectives and it is effective due to taking over the entire screen, and voice or status is likely to be considered highly. However, the message must not be seen or thought of as intrusive. Disadvantages of digital media used on mobile devices also include limited creative capabilities, and reach.
Although there are many positive aspects including the user's entitlement to select product information, digital media creating a flexible message platform and there is potential for direct selling.
4) Cross-platform measurement:
The number of marketing channels continues to expand, as measurement practices are growing in complexity. A cross-platform view must be used to unify audience measurement and media planning.
Market researchers need to understand how the Omni-channel affects consumer's behavior, although when advertisements are on a consumer's device this does not get measured.
Significant aspects to cross-platform measurement involve deduplication and understanding that you have reached an incremental level with another platform, rather than delivering more impressions against people that have previously been reached.
An example is ‘ESPN and comScore partnered on Project Blueprint discovering the sports broadcaster achieved a 21% increase in unduplicated daily reach thanks to digital advertising’.
Television and radio industries are the electronic media, which competes with digital and other technological advertising. Yet television advertising is not directly competing with online digital advertising due to being able to cross platform with digital technology. Radio also gains power through cross platforms, in online streaming content. Television and radio continue to persuade and affect the audience, across multiple platforms.
5) Targeting, viewability, brand safety, and invalid traffic:
Targeting, viewability, brand safety, and invalid traffic all are aspects used by marketers to help advocate digital advertising. Cookies are a form of digital advertising, which are tracking tools within desktop devices, causing difficulty, with shortcomings including deletion by web browsers, the inability to sort between multiple users of a device, inaccurate estimates for unique visitors, overstating reach, understanding frequency, problems with ad servers, which cannot distinguish between when cookies have been deleted and when consumers have not previously been exposed to an ad.
Due to the inaccuracies influenced by cookies, demographics in the target market are low and vary. Another element, which is affected by digital marketing, is ‘viewability’ or whether the ad was actually seen by the consumer. Many ads are not seen by a consumer and may never reach the right demographic segment. Brand safety is another issue of whether or not the ad was produced in the context of being unethical or having offensive content.
Recognizing fraud when an ad is exposed is another challenge marketers face. This relates to invalid traffic as premium sites are more effective at detecting fraudulent traffic, although non-premium sites are more so the problem.
Channels:
Digital Marketing Channels are systems based on the Internet that can create, accelerate, and transmit product value from producer to a consumer terminal, through digital networks.
Digital marketing is facilitated by multiple Digital Marketing channels, as an advertiser one's core objective is to find channels which result in maximum two-way communication and a better overall ROI for the brand. There are multiple digital marketing channels available namely:
Affiliate marketing:
Affiliate marketing is perceived to not be considered a safe, reliable, and easy means of marketing through online platforms. This is due to a lack of reliability in terms of affiliates that can produce the demanded number of new customers. As a result of this risk and bad affiliates, it leaves the brand prone to exploitation in terms of claiming commission that isn't honestly acquired.
Legal means may offer some protection against this, yet there are limitations in recovering any losses or investment. Despite this, affiliate marketing allows the brand to market towards smaller publishers and websites with smaller traffic.
Brands that choose to use this marketing often should beware of such risks involved and look to associate with affiliates in which rules are laid down between the parties involved to assure and minimize the risk involved.
Display advertising:
As the term implies, online display advertising deals with showcasing promotional messages or ideas to the consumer on the internet. This includes a wide range of advertisements like advertising blogs, networks, interstitial ads, contextual data, ads on search engines, classified or dynamic advertisements, etc.
The method can target specific audience tuning in from different types of locals to view a particular advertisement, the variations can be found as the most productive element of this method.
Email marketing:
Email marketing in comparison to other forms of digital marketing is considered cheap. It is also a way to rapidly communicate a message such as their value proposition to existing or potential customers. Yet this channel of communication may be perceived by recipients to be bothersome and irritating especially to new or potential customers, therefore the success of email marketing is reliant on the language and visual appeal applied.
In terms of visual appeal, there are indications that using graphics/visuals that are relevant to the message which is attempting to be sent, yet less visual graphics to be applied with initial emails are more effective in-turn creating a relatively personal feel to the email.
In terms of language, the style is the main factor in determining how captivating the email is. Using a casual tone invokes a warmer, gentler and more inviting feel to the email, compared to a more formal tone.
Search engine marketing:
Search engine marketing (SEM) is a form of Internet marketing that involves the promotion of websites by increasing their visibility in search engine results pages (SERPs) primarily through paid advertising. SEM may incorporate Search engine optimization, which adjusts or rewrites website content and site architecture to achieve a higher ranking in search engine results pages to enhance pay per click (PPC) listings.
Social Media Marketing:
The term 'Digital Marketing' has a number of marketing facets as it supports different channels used in and among these, comes the Social Media.
When we use social media channels (Facebook, Twitter, Pinterest, Instagram, Google+, etc.) to market a product or service, the strategy is called Social Media Marketing. It is a procedure wherein strategies are made and executed to draw in traffic for a website or to gain the attention of buyers over the web using different social media platforms.
Social networking service:
A social networking service is an online platform which people use to build social networks or social relations with other people who share similar personal or career interests, activities, backgrounds or real-life connections
In-game advertising:
In-Game advertising is defined as the "inclusion of products or brands within a digital game." The game allows brands or products to place ads within their game, either in a subtle manner or in the form of an advertisement banner.
There are many factors that exist in whether brands are successful in the advertising of their brand/product, these being:
Individual factors consist of:
The attitude towards the advertising also takes into account not only the message shown but also the attitude towards the game. Dependent on how enjoyable the game is will determine how the brand is perceived, meaning if the game isn't very enjoyable the consumer may subconsciously have a negative attitude towards the brand/product being advertised.
In terms of Integrated Marketing Communication "integration of advertising in digital games into the general advertising, communication, and marketing strategy of the firm" is important as it results in a more clarity about the brand/product and creates a larger overall effect.
Online public relations:
The use of the internet to communicate with both potential and current customers in the public realm.
Video advertising:
This type of advertising in terms of digital/online means are advertisements that play on online videos e.g., YouTube videos. This type of marketing has seen an increase in popularity over time.
Online Video Advertising usually consists of three types:
Post-roll advertisements were shown to have better brand recognition in relation to the other types, where-as "ad-context congruity/incongruity plays an important role in reinforcing ad memorability".
Due to selective attention from viewers, there is the likelihood that the message may not be received. The main advantage of video advertising is that it disrupts the viewing experience of the video and therefore there is a difficulty in attempting to avoid them.
How a consumer interacts with online video advertising can come down to three stages: Pre attention, attention, and behavioral decision. These online advertisements give the brand/business options and choices. These consist of length, position, adjacent video content which all directly affect the effectiveness of the produced advertisement time, therefore manipulating these variables will yield different results.
The length of the advertisement has shown to affect memorability where-as a longer duration resulted in increased brand recognition. This type of advertising, due to its nature of interruption of the viewer, it is likely that the consumer may feel as if their experience is being interrupted or invaded, creating negative perception of the brand.
These advertisements are also available to be shared by the viewers, adding to the attractiveness of this platform. Sharing these videos can be equated to the online version of word by mouth marketing, extending number of people reached.
Sharing videos creates six different outcomes: these being:
Videos that have entertainment value are more likely to be shared, yet pleasure is the strongest motivator to pass videos on. Creating a ‘viral’ trend from a mass amount of a brand advertisement can maximize the outcome of an online video advert whether it be positive or a negative outcome.
Native Advertising:
This involves the placement of paid content that replicates the look, feel, and oftentimes, the voice of a platform's existing content. It is most effective when used on digital platforms like websites, newsletters, and social media. Can be somewhat controversial as some critics feel it intentionally deceives consumers.
Content Marketing:
This is an approach to marketing that focuses on gaining and retaining customers by offering helpful content to customers that improves the buying experience and creates brand awareness. A brand may use this approach to hold a customer’s attention with the goal of influencing potential purchase decisions.
Sponsored Content:
This utilises content created and paid for by a brand to promote a specific product or service.
Inbound Marketing:
A market strategy that involves using content as a means to attract customers to a brand or product. Requires extensive research into the behaviors, interests, and habits of the brand's target market.
SMS Marketing:
Although the popularity is decreasing day by day, still SMS marketing plays huge role to bring new user, provide direct updates, provide new offers etc.
Push Notification:
In this digital era, Push Notification responsible for bringing new and abandoned customer through smart segmentation. Many online brands are using this to provide personalised appeals depending on the scenario of customer acquisition.
It is important for a firm to reach out to consumers and create a two-way communication model, as digital marketing allows consumers to give back feedback to the firm on a community-based site or straight directly to the firm via email.
Firms should seek this long-term communication relationship by using multiple forms of channels and using promotional strategies related to their target consumer as well as word-of-mouth marketing.
Benefits of digital marketing:
Possible benefits of digital marketing include:
Self-regulation:
The ICC Code has integrated rules that apply to marketing communications using digital interactive media throughout the guidelines. There is also an entirely updated section dealing with issues specific to digital interactive media techniques and platforms. Code self-regulation on the use of digital interactive media includes:
Strategy:
Planning:
Digital marketing planning is a term used in marketing management. It describes the first stage of forming a digital marketing strategy for the wider digital marketing system. The difference between digital and traditional marketing planning is that it uses digitally based communication tools and technology such as Social, Web, Mobile, Scannable Surface.
Nevertheless, both are aligned with the vision, the mission of the company and the overarching business strategy.
Stages of planning:
Using Dr. Dave Chaffey's approach, the digital marketing planning (DMP) has three main stages: Opportunity, Strategy, and Action. He suggests that any business looking to implement a successful digital marketing strategy must structure their plan by looking at opportunity, strategy and action. This generic strategic approach often has phases of situation review, goal setting, strategy formulation, resource allocation and monitoring.
Opportunity:
To create an effective DMP, a business first needs to review the marketplace and set 'SMART' (Specific, Measurable, Actionable, Relevant, and Time-Bound) objectives. They can set SMART objectives by reviewing the current benchmarks and key performance indicators (KPIs) of the company and competitors.
It is pertinent that the analytics used for the KPIs be customized to the type, objectives, mission, and vision of the company.
Companies can scan for marketing and sales opportunities by reviewing their own outreach as well as influencer outreach. This means they have competitive advantage because they are able to analyse their co-marketers influence and brand associations.
To seize the opportunity, the firm should summarize its current customers' personas and purchase journey from this they are able to deduce their digital marketing capability. This means they need to form a clear picture of where they are currently and how many resources, they can allocate for their digital marketing strategy i.e., labor, time, etc.
By summarizing the purchase journey, they can also recognize gaps and growth for future marketing opportunities that will either meet objectives or propose new objectives and increase profit.
Strategy:
To create a planned digital strategy, the company must review their digital proposition (what you are offering to consumers) and communicate it using digital customer targeting techniques. So, they must define online value proposition (OVP), this means the company must express clearly what they are offering customers online e.g., brand positioning.
The company should also (re)select target market segments and personas and define digital targeting approaches.
After doing this effectively, it is important to review the marketing mix for online options. The marketing mix comprises the 4Ps – Product, Price, Promotion, and Place. Some academics have added three additional elements to the traditional 4Ps of marketing Process, Place, and Physical appearance making it 7Ps of marketing.
Action:
The third and final stage requires the firm to set a budget and management systems. These must be measurable touchpoints, such as the audience reached across all digital platforms.
Furthermore, marketers must ensure the budget and management systems are integrating the paid, owned, and earned media of the company. The Action and final stage of planning also requires the company to set in place measurable content creation e.g. oral, visual or written online media.
After confirming the digital marketing plan, a scheduled format of digital communications (e.g. Gantt Chart) should be encoded throughout the internal operations of the company. This ensures that all platforms used fall in line and complement each other for the succeeding stages of digital marketing strategy.
Understanding the market:
One way marketers can reach out to consumers and understand their thought process is through what is called an empathy map. An empathy map is a four-step process.
The first step is through asking questions that the consumer would be thinking in their demographic.
The second step is to describe the feelings that the consumer may be having. The third step is to think about what the consumer would say in their situation.
The final step is to imagine what the consumer will try to do based on the other three steps.
This map is so marketing teams can put themselves in their target demographics shoes. Web Analytics are also a very important way to understand consumers. They show the habits that people have online for each website.
One particular form of these analytics is predictive analytics which helps marketers figure out what route consumers are on. This uses the information gathered from other analytics and then creates different predictions of what people will do so that companies can strategize on what to do next, according to the people's trends.
Sharing economy:
The "sharing economy" refers to an economic pattern that aims to obtain a resource that is not fully used. Nowadays, the sharing economy has had an unimagined effect on many traditional elements including labor, industry, and distribution system.
This effect is not negligible that some industries are obviously under threat. The sharing economy is influencing the traditional marketing channels by changing the nature of some specific concept including ownership, assets, and recruitment.
Digital marketing channels and traditional marketing channels are similar in function that the value of the product or service is passed from the original producer to the end user by a kind of supply chain. Digital Marketing channels, however, consist of internet systems that create, promote, and deliver products or services from producer to consumer through digital networks.
Increasing changes to marketing channels has been a significant contributor to the expansion and growth of the sharing economy. Such changes to marketing channels has prompted unprecedented and historic growth. In addition to this typical approach, the built-in control, efficiency and low cost of digital marketing channels is an essential features in the application of sharing economy.
Digital marketing channels within the sharing economy are typically divided into three domains including, e-mail, social media, and search engine marketing or SEM:
1) E-mail: A form of direct marketing characterized as being informative, promotional, and often a means of customer relationship management. Organization can update the activity or promotion information to the user by subscribing the newsletter mail that happened in consuming. Success is reliant upon a company’s ability to access contact information from its past, present, and future clientele.
2) Social Media: Social media has the capability to reach a larger audience in a shorter time frame than traditional marketing channels. This makes social media a powerful tool for consumer engagement and the dissemination of information.
3) Search Engine Marketing or SEM: Requires more specialized knowledge of the technology embedded in online platforms. This marketing strategy requires long-term commitment and dedication to the ongoing improvement of a company’s digital presence.
Other emerging digital marketing channels, particularly branded mobile apps, have excelled in the sharing economy. Branded mobile apps are created specifically to initiate engagement between customers and the company. This engagement is typically facilitated through entertainment, information, or market transaction.
See also:
Lately, in speaking with small business owners I’m hearing a pretty common theme about their marketing frustrations and plans.
The owner knows the business needs to be online to generate leads from online marketing initiatives, they understand that a website is crucial to those efforts, and that’s where the conversation screeches to an abrupt halt. “That’s it, right? All I need is a website and my business will suddenly be going gangbusters!” Well, if you look online at the millions of websites out there that have failed, you’ll quickly realize that just having a website isn’t the key to success at all. Not by a longshot.
Building a website and just leaving it to sit there, hoping new customers will magically flock to it, is basically like buying a new, high-performance car, putting one gallon of gas in it, and then never filling it up again. That car is going to run like a champ – until the gas runs out.
Having a total online presence is your company’s marketing fuelThe concept of having a total online presence is where small business owners get confused and frustrated with trying to make online/digital marketing work for them.
The fuel for online marketing success is composed of a number of tactics, but it all starts with content. Content can include a whole range of communication mechanisms such as:
- blogs,
- web pages,
- videos,
- infographics,
- audio,
- images,
- emails,
- directory listings,
- social media posts
- really anything your business publishes to educate prospects and customers about who you are, who you serve, and why they should learn more about your business and buy from you.
What do I mean by making digital marketing work?
Digital marketing isn’t just about generating leads, although this is the most important aspect of a marketing program for nearly all small businesses. In most situations, getting a direct lead isn’t the typical outcome of successful digital marketing.
The desired outcome should be focused on creating or increasing company awareness, and building engagement on a pre-sale basis (enabling the prospect to opt in for more information, attend a webinar, view a video, etc.)
Today, the consumer is in control of the information they want to see. Interruption, or outbound, marketing is not the most effective ways to reach your market, nor is it the most cost effective.
Think of your customers as being on a journey to solve their problems. On the road to becoming customers, they will go through stages in their process including Know > Like > Trust > Try > Buy > Repeat > Refer during their relationship with your business… or with your competition.
Your customers are looking for you:
The relationship with new customers begins before you have any inkling they’re in the market for what you’re selling. Prospects are learning about your company when they look for your product or services on search engines, social media, word-of-mouth referrals, digital referrals (reviews and ratings), and all the other channels consumers use to find information.
Here’s the deal: Your digital marketing isn’t just about you providing prospective clients the best information about your services once they’re already on your website. Your digital marketing process is all about attracting prospects to your site in the first place! That means you need to show up where people congregate, which primarily means search engines and social media.
Building a great website is only the first step in the digital marketing process. Of course, it’s a vitally important step, but it’s the beginning, not the end game. Once potential customers have found your website, you need to encourage them to stick around because they find value there. I’m not talking about a 10% off coupon for joining your mailing list (although that’s a good tactic). I’m talking about content.
You need to maintain a blog on your website that engages prospects and feeds them information that only you can provide. If you’re sitting there thinking, “No one would read a blog about my business,” then I have a challenge for you:
- Think of the number one question customers ask you most often (or the number one problem you solve for customers that you wish more people asked about).
- Type that question or problem into Google’s search box.
- What are the results? Blogs? Competitor’s sites with information that you could have written better? Your site?
People are looking for answers to the problems you solve. But if they don’t know how to, or can’t find you, they’re headed to your competition. Your static, never-updated website that provides your phone number and address won’t get you to where you’re answering these questions. It takes consistent, high-quality content addressing the questions your customers have to make your website a digital marketing machine.
That’s what effective content marketing is – the fuel to keep your car running fast and smooth helping you better serve and grow your target market. Digital brochures won’t get the job done, your website should be a living/breathing, 24×7 sales representative for your company, engaging visitors to connect with you and educating them about how your company can solve their problems.
If you’re in a service business (attorney, CPA, electrician, roofers, etc.), look closer at the search results and see how many of them come from directory sites such as Avvo, Angie’s List, Houzz, Yelp, BBB. I’m willing to bet that at least a third, if not more, of the results for common searches in your area (e.g., “best roofer in [your city]”) are from these aggregation sites. These lists are another valuable avenue for you to build a relationship with customers.
So where do you start?:
First, you have to know who you’re targeting (your potential best customers). Then you must know which problems you can solve for these markets and tell the story of why your business is the one they should choose (differentiation and messaging). Then you need a strategy for creating a Total Online Presence that includes your website as the hub of a wheel with spokes that drive customers and prospects to your “digital doorway” – blogs, directory listings, optimized web pages, search engine optimization, email marketing, social media marketing.
Finally, you need analytics and metrics to measure progress and plan for the consistent expansion of your successful efforts.
None of these tactics can stand alone anymore – the digital space is just too competitive to not take care of all the spokes of the wheel.
It never really ends:
So yeah, there’s no, “one and done” in effective small business marketing. Even if you’re doing a great job ranking for the search terms you want and generating high-quality online leads, you can always do better: expanded search terms to rank for, more products and services to promote, new target markets to expand to.
A word of caution, however: Your competition will come after you once they see your success, so you have to keep the tank full in your shiny new car to keep the other guys from catching you.
The good news:
Lest I make you even more frustrated or confused about how to get ahead of your competition online, I have a couple of pieces of good news:
First, you don’t have to be on every social media site, blog three times a week, and run thousands of dollars of digital advertising to get ahead. You need to focus on your strengths, your core target markets, and the channels that make the most sense for your business (there’s a good chance right now that Snapchat probably isn’t one of them).
Do less and do it better, is key to getting off to a good start.
Second, there’s lots of help out there. I’ve discussed how to hire the help you need, but there is no shortage of information online teaching you how to improve your online marketing.
And, I can help you, too. If you’d like to discuss a complete audit of your existing online presence, including a roadmap for what to do next that you can take to anyone to implement, then let’s talk.
February 7, 2018 / Small Business Marketing / By Mark Fortune
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Click here for a List of U.S. Digital Marketing Companies
Digital marketing is the component of marketing that uses the Internet and online-based digital technologies such as desktop computers, mobile phones and other digital media and platforms to promote products and services. Its development during the 1990s and 2000s changed the way brands and businesses use technology for marketing.
As digital platforms became increasingly incorporated into marketing plans and everyday life, and as people increasingly used digital devices instead of visiting physical shops, digital marketing campaigns have become prevalent, employing combinations of the following:
- search engine optimization (SEO),
- search engine marketing (SEM),
- content marketing,
- influencer marketing,
- content automation,
- campaign marketing,
- data-driven marketing,
- e-commerce marketing,
- social media marketing,
- social media optimization,
- e-mail direct marketing,
- display advertising,
- e-books,
- optical disks
- and games.
Digital marketing extends to non-Internet channels that provide digital media, such as television, mobile phones (SMS and MMS), callbacks, and on-hold mobile ring tones. The extension to non-Internet channels differentiates digital marketing from online marketing.
History:
Digital marketing effectively began in 1990 when the Archie search engine was created as an index for FTP sites. In the 1980s, the storage capacity of computers was already large enough to store huge volumes of customer information.
Companies started choosing online techniques, such as database marketing, rather than limited list broker. Databases allowed companies to track customers' information more effectively, transforming the relationship between buyer and seller.
In the 1990s, the term digital marketing was coined. With the development of server/client architecture and the popularity of personal computers, Customer Relationship Management (CRM) applications became a significant factor in marketing technology.
Fierce competition forced vendors to include more services into their software, for example, marketing, sales and service applications. Marketers were also able to own online customer data through eCRM software after the Internet was born.
This led to the first clickable banner ad going live in 1994, which was the "You Will" campaign by AT&T and over the first four months of it going live, 44% of all people who saw it clicked on the ad.
In the 2000s, with increasing numbers of Internet users and the birth of the iPhone, customers began searching for products and making decisions about their needs online first, instead of consulting a salesperson, which created a new problem for the marketing department of a company.
In addition, a survey in 2000 in the United Kingdom found that most retailers had not registered their own domain address. These problems encouraged marketers to find new ways to integrate digital technology into market development.
In 2007, marketing automation was developed as a response to the ever-evolving marketing climate. Marketing automation is the process by which software is used to automate conventional marketing processes.
Marketing automation helped companies segment customers, launch multichannel marketing campaigns, and provide personalized information for customers., based on their specific activities. In this way, users' activity (or lack thereof) triggers a personal message that is customized to the user in their preferred platform. However, despite the benefits of marketing automation many companies are struggling to adopt it to their everyday uses correctly.
Digital marketing became more sophisticated in the 2000s and the 2010s, when the proliferation of devices' capable of accessing digital media led to sudden growth.
Statistics produced in 2012 and 2013 showed that digital marketing was still growing.
With the development of social media in the 2000s, such as LinkedIn, Facebook, YouTube and Twitter, consumers became highly dependent on digital electronics in daily lives. Therefore, they expected a seamless user experience across different channels for searching product's information.
The change of customer behavior improved the diversification of marketing technology.
The term "Digital Marketing" was coined in the 1990's. Digital marketing was formally known as and referred to as 'online marketing', 'internet marketing' or 'web marketing'.
Worldwide digital marketing has become the most common used term and took off in the business industry, especially after the year 2013. But in other countries like Italy, digital marketing is still known as web marketing.
Digital media growth was estimated at 4.5 trillion online ads served annually with digital media spend at 48% growth in 2010. An increasing portion of advertising stems from businesses employing Online Behavioural Advertising (OBA) to tailor advertising for internet users, but OBA raises concern of consumer privacy and data protection.
New non-linear marketing approach:
Nonlinear marketing, a type of interactive marketing, is a long-term marketing approach which builds on businesses collecting information about an Internet user's online activities and trying to be visible in multiple areas.
Unlike traditional marketing techniques, which involve direct, one-way messaging to consumers (via print, television, and radio advertising), nonlinear digital marketing strategies are centered on reaching prospective customers across multiple online channels.
Combined with higher consumer knowledge and the demand for more sophisticated consumer offerings, this change has forced many businesses to rethink their outreach strategy and adopt or incorporate omnichannel, nonlinear marketing techniques to maintain sufficient brand exposure, engagement, and reach.
Nonlinear marketing strategies involve efforts to adapt the advertising to different platforms and to tailor the advertising to different individual buyers rather than a large coherent audience.
Tactics may include:
- Search engine optimization (SEO)
- Social media marketing
- Video marketing
- Email marketing
- Blogging & affiliate marketing
- Website marketing
- Paid search/contextual advertising
- Search engine marketing
Some studies indicate that consumer responses to traditional marketing approaches are becoming less predictable for businesses. According to a 2018 study, nearly 90% of online consumers in the United States researched products and brands online before visiting the store or making a purchase.
The Global Web Index estimated that in 2018, a little more than 50% of consumers researched products on social media. Businesses often rely on individuals portraying their products in a positive light on social media, and may adapt their marketing strategy to target people with large social media followings in order to generate such comments.
In this manner, businesses can use consumers to advertise their products or services, decreasing the cost for the company.
Brand awareness:
Main article: Brand awareness
One of the key objectives of modern digital marketing is to raise brand awareness, the extent to which customers and the general public are familiar with and recognize a particular brand.
Enhancing brand awareness is important in digital marketing, and marketing in general, because of its impact on brand perception and consumer decision-making. According to the 2015 essay, "Impact of Brand on Consumer Behavior":
"Brand awareness, as one of the fundamental dimensions of brand equity, is often considered to be a prerequisite of consumers’ buying decision, as it represents the main factor for including a brand in the consideration set.
Brand awareness can also influence consumers’ perceived risk assessment and their confidence in the purchase decision, due to familiarity with the brand and its characteristics."
Recent trends show that businesses and digital marketers are prioritizing brand awareness, focusing more on their digital marketing efforts on cultivating brand recognition and recall than in previous years. This is evidenced by a 2019 Content Marketing Institute study, which found that 81% of digital marketers have worked on enhancing brand recognition over the past year.
Another Content Marketing Institute survey revealed 89% of B2B marketers now believe improving brand awareness to be more important than efforts directed at increasing sales.
Increasing brand awareness is a focus of digital marketing strategy for a number of reasons:
- The growth of online shopping. A survey by Statista projects 230.5 million people in the United States will use the internet to shop, compare, and buy products by 2021, up from 209.6 million in 2016. Research from business software firm Salesforce found 87% of people began searches for products and brands on digital channels in 2018.
- The role of digital interaction in customer behavior. It’s estimated that 70% of all retail purchases made in the U.S. are influenced to some degree by an interaction with a brand online.
- The growing influence and role of brand awareness in online consumer decision-making: 82% of online shoppers searching for services give preference to brands they know of.
- The use, convenience, and influence of social media. A recent report by Hootsuite estimated there were more than 3.4 billion active users on social media platforms, a 9% increase from 2018. A 2019 survey by The Manifest states that 74% of social media users follow brands on social sites, and 96% of people who follow businesses also engage with those brands on social platforms. According to Deloitte, one in three U.S. consumers are influenced by social media when buying a product, while 47% of millennials factor their interaction with a brand on social when making a purchase.
Online methods used to build brand awareness:
Digital marketing strategies may include the use of one or more online channels and techniques (omnichannel) to increase brand awareness among consumers.
Building brand awareness may involve such methods/tools as:
Search engine optimization (SEO):
Search engine optimization techniques may be used to improve the visibility of business websites and brand-related content for common industry-related search queries.
The importance of SEO to increase brand awareness is said to correlate with the growing influence of search results and search features like featured snippets, knowledge panels, and local SEO on customer behavior.
Search engine marketing (SEM):
SEM, also known as PPC advertising, involves the purchase of ad space in prominent, visible positions atop search results pages and websites. Search ads have been shown to have a positive impact on brand recognition, awareness and conversions.
Further information: Conversion as a service
33% of searchers who click on paid ads do so because they directly respond to their particular search query.
Social media marketing:
Social media marketing has the characteristics of being in the marketing state and interacting with consumers all the time, emphasizing content and interaction skills. The marketing process needs to be monitored, analyzed, summarized and managed in real-time, and the marketing target needs to be adjusted according to the real-time feedback from the market and consumers.
70% of marketers list increasing brand awareness as their number one goal for marketing on social media platforms. Facebook, Instagram, Twitter, and YouTube are listed as the top platforms currently used by social media marketing teams.
As of 2021, LinkedIn has been added as one of the most-used social media platforms by business leaders for its professional networking capabilities.
Content marketing:
56% of marketers believe personalization content – brand-centered blogs, articles, social updates, videos, landing pages – improves brand recall and engagement.
Developments and strategies:
One of the major changes that occurred in traditional marketing was the "emergence of digital marketing", this led to the reinvention of marketing strategies in order to adapt to this major change in traditional marketing.
As digital marketing is dependent on technology which is ever-evolving and fast-changing, the same features should be expected from digital marketing developments and strategies.
This portion is an attempt to qualify or segregate the notable highlights existing and being used.
- Segmentation: More focus has been placed on segmentation within digital marketing, in order to target specific markets in both business-to-business and business-to-consumer sectors.
- Influencer marketing: Important nodes are identified within related communities, known as influencers. This is becoming an important concept in digital targeting. Influencers allow brands to take advantage of social media and the large audiences available on many of these platforms. It is possible to reach influencers via paid advertising, such as Facebook Advertising or Google Ads campaigns, or through sophisticated sCRM (social customer relationship management) software, such as SAP C4C, Microsoft Dynamics, Sage CRM and Salesforce CRM. Many universities now focus, at Masters level, on engagement strategies for influencers.
To summarize, Pull digital marketing is characterized by consumers actively seeking marketing content while Push digital marketing occurs when marketers send messages without that content being actively sought by the recipients:
Online behavioral advertising:
This is the practice of collecting information about a user's online activity over time, "on a particular device and across different, unrelated websites, in order to deliver advertisements tailored to that user's interests and preferences." Such Advertisements are based on site retargeting are customized based on each user behavior and pattern.
Collaborative Environment:
A collaborative environment can be set up between the organization, the technology service provider, and the digital agencies to optimize effort, resource sharing, reusability and communications.
Additionally, organizations are inviting their customers to help them better understand how to service them. This source of data is called user-generated content. Much of this is acquired via company websites where the organization invites people to share ideas that are then evaluated by other users of the site.
The most popular ideas are evaluated and implemented in some form. Using this method of acquiring data and developing new products can foster the organization's relationship with its customer as well as spawn ideas that would otherwise be overlooked. UGC is low-cost advertising as it is directly from the consumers and can save advertising costs for the organization.
Data-driven advertising:
Users generate a lot of data in every step they take on the path of customer journey and brands can now use that data to activate their known audience with data-driven programmatic media buying.
Without exposing customers' privacy, users' data can be collected from digital channels (e.g.: when the customer visits a website, reads an e-mail, or launches and interact with a brand's mobile app), brands can also collect data from real-world customer interactions, such as brick and mortar stores visits and from CRM and sales engines datasets.
Also known as people-based marketing or addressable media, data-driven advertising is empowering brands to find their loyal customers in their audience and deliver in real time a much more personal communication, highly relevant to each customers' moment and actions.
An important consideration today while deciding on a strategy is that the digital tools have democratized the promotional landscape.
Remarketing:
Remarketing plays a major role in digital marketing. This tactic allows marketers to publish targeted ads in front of an interest category or a defined audience, generally called searchers in web speak, they have either searched for particular products or services or visited a website for some purpose.
Game advertising:
Game ads are advertisements that exist within computer or video games. One of the most common examples of in-game advertising is billboards appearing in sports games. In-game ads also might appear as brand-name products like guns, cars, or clothing that exist as gaming status symbols.
Six principles for building online brand content:
- Do not consider individuals as consumers;
- Have an editorial position;
- Define an identity for the brand;
- Maintain a continuity of contents;
- Ensure a regular interaction with audience;
- Have a channel for events.
The new digital era has enabled brands to selectively target their customers that may potentially be interested in their brand or based on previous browsing interests. Businesses can now use social media to select the age range, location, gender, and interests of whom they would like their targeted post to be seen.
Furthermore, based on a customer's recent search history they can be ‘followed’ on the internet so they see advertisements from similar brands, products, and services, This allows businesses to target the specific customers that they know and feel will most benefit from their product or service, something that had limited capabilities up until the digital era.
Tourism marketing:
Advanced tourism, responsible and sustainable tourism, social media and online tourism marketing, and geographic information systems. As a broader research field matures and attracts more diverse and in-depth academic research.
Ineffective forms of digital marketing:
Digital marketing activity is still growing across the world according to the headline global marketing index. A study published in September 2018, found that global outlays on digital marketing tactics are approaching $100 billion. Digital media continues to rapidly grow.
While the marketing budgets are expanding, traditional media is declining. Digital media helps brands reach consumers to engage with their product or service in a personalized way.
Five areas, which are outlined as current industry practices that are often ineffective are:
- prioritizing clicks,
- balancing search and display,
- understanding mobiles,
- targeting, viewability, brand safety and invalid traffic,
- and cross-platform measurement.
Why these practices are ineffective and some ways around making these aspects effective are discussed surrounding the following points.
1) Prioritizing clicks:
Prioritizing clicks refers to display click ads, although advantageous by being ‘simple, fast and inexpensive’ rates for display ads in 2016 is only 0.10 percent in the United States. This means one in a thousand click ads is relevant therefore having little effect. This displays that marketing companies should not just use click ads to evaluate the effectiveness of display advertisements.
2) Balancing search and display:
Balancing search and display for digital display ads is important. marketers tend to look at the last search and attribute all of the effectiveness of this. This, in turn, disregards other marketing efforts, which establish brand value within the consumer's mind.
ComScore determined through drawing on data online, produced by over one hundred multichannel retailers that digital display marketing poses strengths when compared with or positioned alongside, paid search. This is why it is advised that when someone clicks on a display ad the company opens a landing page, not its home page.
A landing page typically has something to draw the customer in to search beyond this page. Commonly marketers see increased sales among people exposed to a search ad. But the fact of how many people you can reach with a display campaign compared to a search campaign should be considered.
Multichannel retailers have an increased reach if the display is considered in synergy with search campaigns. Overall, both search and display aspects are valued as display campaigns build awareness for the brand so that more people are likely to click on these digital ads when running a search campaign.
3) Understanding Mobiles:
Understanding mobile devices is a significant aspect of digital marketing because smartphones and tablets are now responsible for 64% of the time US consumers are online.
Apps provide a big opportunity as well as challenge for the marketers because firstly the app needs to be downloaded and secondly the person needs to actually use it. This may be difficult as ‘half the time spent on smartphone apps occurs on the individuals single most used app, and almost 85% of their time on the top four rated apps’.
Mobile advertising can assist in achieving a variety of commercial objectives and it is effective due to taking over the entire screen, and voice or status is likely to be considered highly. However, the message must not be seen or thought of as intrusive. Disadvantages of digital media used on mobile devices also include limited creative capabilities, and reach.
Although there are many positive aspects including the user's entitlement to select product information, digital media creating a flexible message platform and there is potential for direct selling.
4) Cross-platform measurement:
The number of marketing channels continues to expand, as measurement practices are growing in complexity. A cross-platform view must be used to unify audience measurement and media planning.
Market researchers need to understand how the Omni-channel affects consumer's behavior, although when advertisements are on a consumer's device this does not get measured.
Significant aspects to cross-platform measurement involve deduplication and understanding that you have reached an incremental level with another platform, rather than delivering more impressions against people that have previously been reached.
An example is ‘ESPN and comScore partnered on Project Blueprint discovering the sports broadcaster achieved a 21% increase in unduplicated daily reach thanks to digital advertising’.
Television and radio industries are the electronic media, which competes with digital and other technological advertising. Yet television advertising is not directly competing with online digital advertising due to being able to cross platform with digital technology. Radio also gains power through cross platforms, in online streaming content. Television and radio continue to persuade and affect the audience, across multiple platforms.
5) Targeting, viewability, brand safety, and invalid traffic:
Targeting, viewability, brand safety, and invalid traffic all are aspects used by marketers to help advocate digital advertising. Cookies are a form of digital advertising, which are tracking tools within desktop devices, causing difficulty, with shortcomings including deletion by web browsers, the inability to sort between multiple users of a device, inaccurate estimates for unique visitors, overstating reach, understanding frequency, problems with ad servers, which cannot distinguish between when cookies have been deleted and when consumers have not previously been exposed to an ad.
Due to the inaccuracies influenced by cookies, demographics in the target market are low and vary. Another element, which is affected by digital marketing, is ‘viewability’ or whether the ad was actually seen by the consumer. Many ads are not seen by a consumer and may never reach the right demographic segment. Brand safety is another issue of whether or not the ad was produced in the context of being unethical or having offensive content.
Recognizing fraud when an ad is exposed is another challenge marketers face. This relates to invalid traffic as premium sites are more effective at detecting fraudulent traffic, although non-premium sites are more so the problem.
Channels:
Digital Marketing Channels are systems based on the Internet that can create, accelerate, and transmit product value from producer to a consumer terminal, through digital networks.
Digital marketing is facilitated by multiple Digital Marketing channels, as an advertiser one's core objective is to find channels which result in maximum two-way communication and a better overall ROI for the brand. There are multiple digital marketing channels available namely:
Affiliate marketing:
Affiliate marketing is perceived to not be considered a safe, reliable, and easy means of marketing through online platforms. This is due to a lack of reliability in terms of affiliates that can produce the demanded number of new customers. As a result of this risk and bad affiliates, it leaves the brand prone to exploitation in terms of claiming commission that isn't honestly acquired.
Legal means may offer some protection against this, yet there are limitations in recovering any losses or investment. Despite this, affiliate marketing allows the brand to market towards smaller publishers and websites with smaller traffic.
Brands that choose to use this marketing often should beware of such risks involved and look to associate with affiliates in which rules are laid down between the parties involved to assure and minimize the risk involved.
Display advertising:
As the term implies, online display advertising deals with showcasing promotional messages or ideas to the consumer on the internet. This includes a wide range of advertisements like advertising blogs, networks, interstitial ads, contextual data, ads on search engines, classified or dynamic advertisements, etc.
The method can target specific audience tuning in from different types of locals to view a particular advertisement, the variations can be found as the most productive element of this method.
Email marketing:
Email marketing in comparison to other forms of digital marketing is considered cheap. It is also a way to rapidly communicate a message such as their value proposition to existing or potential customers. Yet this channel of communication may be perceived by recipients to be bothersome and irritating especially to new or potential customers, therefore the success of email marketing is reliant on the language and visual appeal applied.
In terms of visual appeal, there are indications that using graphics/visuals that are relevant to the message which is attempting to be sent, yet less visual graphics to be applied with initial emails are more effective in-turn creating a relatively personal feel to the email.
In terms of language, the style is the main factor in determining how captivating the email is. Using a casual tone invokes a warmer, gentler and more inviting feel to the email, compared to a more formal tone.
Search engine marketing:
Search engine marketing (SEM) is a form of Internet marketing that involves the promotion of websites by increasing their visibility in search engine results pages (SERPs) primarily through paid advertising. SEM may incorporate Search engine optimization, which adjusts or rewrites website content and site architecture to achieve a higher ranking in search engine results pages to enhance pay per click (PPC) listings.
Social Media Marketing:
The term 'Digital Marketing' has a number of marketing facets as it supports different channels used in and among these, comes the Social Media.
When we use social media channels (Facebook, Twitter, Pinterest, Instagram, Google+, etc.) to market a product or service, the strategy is called Social Media Marketing. It is a procedure wherein strategies are made and executed to draw in traffic for a website or to gain the attention of buyers over the web using different social media platforms.
Social networking service:
A social networking service is an online platform which people use to build social networks or social relations with other people who share similar personal or career interests, activities, backgrounds or real-life connections
In-game advertising:
In-Game advertising is defined as the "inclusion of products or brands within a digital game." The game allows brands or products to place ads within their game, either in a subtle manner or in the form of an advertisement banner.
There are many factors that exist in whether brands are successful in the advertising of their brand/product, these being:
- Type of game,
- technical platform,
- 3-D and 4-D technology,
- game genre,
- congruity of brand and game,
- prominence of advertising within the game.
Individual factors consist of:
- attitudes towards placement advertisements,
- game involvement,
- product involvement,
- flow,
- or entertainment.
The attitude towards the advertising also takes into account not only the message shown but also the attitude towards the game. Dependent on how enjoyable the game is will determine how the brand is perceived, meaning if the game isn't very enjoyable the consumer may subconsciously have a negative attitude towards the brand/product being advertised.
In terms of Integrated Marketing Communication "integration of advertising in digital games into the general advertising, communication, and marketing strategy of the firm" is important as it results in a more clarity about the brand/product and creates a larger overall effect.
Online public relations:
The use of the internet to communicate with both potential and current customers in the public realm.
Video advertising:
This type of advertising in terms of digital/online means are advertisements that play on online videos e.g., YouTube videos. This type of marketing has seen an increase in popularity over time.
Online Video Advertising usually consists of three types:
- Pre-Roll advertisements which play before the video is watched,
- Mid-Roll advertisements which play during the video,
- or Post-Roll advertisements which play after the video is watched.
Post-roll advertisements were shown to have better brand recognition in relation to the other types, where-as "ad-context congruity/incongruity plays an important role in reinforcing ad memorability".
Due to selective attention from viewers, there is the likelihood that the message may not be received. The main advantage of video advertising is that it disrupts the viewing experience of the video and therefore there is a difficulty in attempting to avoid them.
How a consumer interacts with online video advertising can come down to three stages: Pre attention, attention, and behavioral decision. These online advertisements give the brand/business options and choices. These consist of length, position, adjacent video content which all directly affect the effectiveness of the produced advertisement time, therefore manipulating these variables will yield different results.
The length of the advertisement has shown to affect memorability where-as a longer duration resulted in increased brand recognition. This type of advertising, due to its nature of interruption of the viewer, it is likely that the consumer may feel as if their experience is being interrupted or invaded, creating negative perception of the brand.
These advertisements are also available to be shared by the viewers, adding to the attractiveness of this platform. Sharing these videos can be equated to the online version of word by mouth marketing, extending number of people reached.
Sharing videos creates six different outcomes: these being:
- pleasure,
- affection,
- inclusion,
- escape,
- relaxation,
- and control".
Videos that have entertainment value are more likely to be shared, yet pleasure is the strongest motivator to pass videos on. Creating a ‘viral’ trend from a mass amount of a brand advertisement can maximize the outcome of an online video advert whether it be positive or a negative outcome.
Native Advertising:
This involves the placement of paid content that replicates the look, feel, and oftentimes, the voice of a platform's existing content. It is most effective when used on digital platforms like websites, newsletters, and social media. Can be somewhat controversial as some critics feel it intentionally deceives consumers.
Content Marketing:
This is an approach to marketing that focuses on gaining and retaining customers by offering helpful content to customers that improves the buying experience and creates brand awareness. A brand may use this approach to hold a customer’s attention with the goal of influencing potential purchase decisions.
Sponsored Content:
This utilises content created and paid for by a brand to promote a specific product or service.
Inbound Marketing:
A market strategy that involves using content as a means to attract customers to a brand or product. Requires extensive research into the behaviors, interests, and habits of the brand's target market.
SMS Marketing:
Although the popularity is decreasing day by day, still SMS marketing plays huge role to bring new user, provide direct updates, provide new offers etc.
Push Notification:
In this digital era, Push Notification responsible for bringing new and abandoned customer through smart segmentation. Many online brands are using this to provide personalised appeals depending on the scenario of customer acquisition.
It is important for a firm to reach out to consumers and create a two-way communication model, as digital marketing allows consumers to give back feedback to the firm on a community-based site or straight directly to the firm via email.
Firms should seek this long-term communication relationship by using multiple forms of channels and using promotional strategies related to their target consumer as well as word-of-mouth marketing.
Benefits of digital marketing:
Possible benefits of digital marketing include:
- any information that is needed is accessible at any time and/or place
- surpasses internet marketing and also possesses alternatives choices without the internet needed
- top in presenting beneficial ways and features that reach, inform, engage, offer, and sell services and products to consumers
- businesses can attain data that present target audiences based on their age, location, interests, and education
- low investment, the cost per lead is 61% less expensive than traditional marketing
- able to reach every mobile user, there are over 14 billion worldwide mobile devices and with a projection to grow to almost 18 billion by the year 2024
Self-regulation:
The ICC Code has integrated rules that apply to marketing communications using digital interactive media throughout the guidelines. There is also an entirely updated section dealing with issues specific to digital interactive media techniques and platforms. Code self-regulation on the use of digital interactive media includes:
- Clear and transparent mechanisms to enable consumers to choose not to have their data collected for advertising or marketing purposes;
- Clear indication that a social network site is commercial and is under the control or influence of a marketer;
- Limits are set so that marketers communicate directly only when there are reasonable grounds to believe that the consumer has an interest in what is being offered;
- Respect for the rules and standards of acceptable commercial behavior in social networks and the posting of marketing messages only when the forum or site has clearly indicated its willingness to receive them;
- Special attention and protection for children.
Strategy:
Planning:
Digital marketing planning is a term used in marketing management. It describes the first stage of forming a digital marketing strategy for the wider digital marketing system. The difference between digital and traditional marketing planning is that it uses digitally based communication tools and technology such as Social, Web, Mobile, Scannable Surface.
Nevertheless, both are aligned with the vision, the mission of the company and the overarching business strategy.
Stages of planning:
Using Dr. Dave Chaffey's approach, the digital marketing planning (DMP) has three main stages: Opportunity, Strategy, and Action. He suggests that any business looking to implement a successful digital marketing strategy must structure their plan by looking at opportunity, strategy and action. This generic strategic approach often has phases of situation review, goal setting, strategy formulation, resource allocation and monitoring.
Opportunity:
To create an effective DMP, a business first needs to review the marketplace and set 'SMART' (Specific, Measurable, Actionable, Relevant, and Time-Bound) objectives. They can set SMART objectives by reviewing the current benchmarks and key performance indicators (KPIs) of the company and competitors.
It is pertinent that the analytics used for the KPIs be customized to the type, objectives, mission, and vision of the company.
Companies can scan for marketing and sales opportunities by reviewing their own outreach as well as influencer outreach. This means they have competitive advantage because they are able to analyse their co-marketers influence and brand associations.
To seize the opportunity, the firm should summarize its current customers' personas and purchase journey from this they are able to deduce their digital marketing capability. This means they need to form a clear picture of where they are currently and how many resources, they can allocate for their digital marketing strategy i.e., labor, time, etc.
By summarizing the purchase journey, they can also recognize gaps and growth for future marketing opportunities that will either meet objectives or propose new objectives and increase profit.
Strategy:
To create a planned digital strategy, the company must review their digital proposition (what you are offering to consumers) and communicate it using digital customer targeting techniques. So, they must define online value proposition (OVP), this means the company must express clearly what they are offering customers online e.g., brand positioning.
The company should also (re)select target market segments and personas and define digital targeting approaches.
After doing this effectively, it is important to review the marketing mix for online options. The marketing mix comprises the 4Ps – Product, Price, Promotion, and Place. Some academics have added three additional elements to the traditional 4Ps of marketing Process, Place, and Physical appearance making it 7Ps of marketing.
Action:
The third and final stage requires the firm to set a budget and management systems. These must be measurable touchpoints, such as the audience reached across all digital platforms.
Furthermore, marketers must ensure the budget and management systems are integrating the paid, owned, and earned media of the company. The Action and final stage of planning also requires the company to set in place measurable content creation e.g. oral, visual or written online media.
After confirming the digital marketing plan, a scheduled format of digital communications (e.g. Gantt Chart) should be encoded throughout the internal operations of the company. This ensures that all platforms used fall in line and complement each other for the succeeding stages of digital marketing strategy.
Understanding the market:
One way marketers can reach out to consumers and understand their thought process is through what is called an empathy map. An empathy map is a four-step process.
The first step is through asking questions that the consumer would be thinking in their demographic.
The second step is to describe the feelings that the consumer may be having. The third step is to think about what the consumer would say in their situation.
The final step is to imagine what the consumer will try to do based on the other three steps.
This map is so marketing teams can put themselves in their target demographics shoes. Web Analytics are also a very important way to understand consumers. They show the habits that people have online for each website.
One particular form of these analytics is predictive analytics which helps marketers figure out what route consumers are on. This uses the information gathered from other analytics and then creates different predictions of what people will do so that companies can strategize on what to do next, according to the people's trends.
- Consumer behavior: the habits or attitudes of a consumer that influences the buying process of a product or service. Consumer behavior impacts virtually every stage of the buying process specifically in relation to digital environments and devices.
- Predictive analytics: a form of data mining that involves using existing data to predict potential future trends or behaviors. Can assist companies in predicting future behavior of customers.
- Buyer persona: employing research of consumer behavior regarding habits like brand awareness and buying behavior to profile prospective customers. Establishing a buyer persona helps a company better understand their audience and their specific wants/needs.
- Marketing Strategy: strategic planning employed by a brand to determine potential positioning within a market as well as the prospective target audience. It involves two key elements: segmentation and positioning. By developing a marketing strategy, a company is able to better anticipate and plan for each step in the marketing and buying process.
Sharing economy:
The "sharing economy" refers to an economic pattern that aims to obtain a resource that is not fully used. Nowadays, the sharing economy has had an unimagined effect on many traditional elements including labor, industry, and distribution system.
This effect is not negligible that some industries are obviously under threat. The sharing economy is influencing the traditional marketing channels by changing the nature of some specific concept including ownership, assets, and recruitment.
Digital marketing channels and traditional marketing channels are similar in function that the value of the product or service is passed from the original producer to the end user by a kind of supply chain. Digital Marketing channels, however, consist of internet systems that create, promote, and deliver products or services from producer to consumer through digital networks.
Increasing changes to marketing channels has been a significant contributor to the expansion and growth of the sharing economy. Such changes to marketing channels has prompted unprecedented and historic growth. In addition to this typical approach, the built-in control, efficiency and low cost of digital marketing channels is an essential features in the application of sharing economy.
Digital marketing channels within the sharing economy are typically divided into three domains including, e-mail, social media, and search engine marketing or SEM:
1) E-mail: A form of direct marketing characterized as being informative, promotional, and often a means of customer relationship management. Organization can update the activity or promotion information to the user by subscribing the newsletter mail that happened in consuming. Success is reliant upon a company’s ability to access contact information from its past, present, and future clientele.
2) Social Media: Social media has the capability to reach a larger audience in a shorter time frame than traditional marketing channels. This makes social media a powerful tool for consumer engagement and the dissemination of information.
3) Search Engine Marketing or SEM: Requires more specialized knowledge of the technology embedded in online platforms. This marketing strategy requires long-term commitment and dedication to the ongoing improvement of a company’s digital presence.
Other emerging digital marketing channels, particularly branded mobile apps, have excelled in the sharing economy. Branded mobile apps are created specifically to initiate engagement between customers and the company. This engagement is typically facilitated through entertainment, information, or market transaction.
See also:
- Digital marketing engineer
- Digital marketing system
- Digital marketing channels in the sharing economy
- Distributed presence
- Interactive marketing
- Mobile marketing
- Online advertising
- Pay-per-click
- Social media marketing
- Visual marketing
- Marketing strategy
- Customer data platform
- User intent
- Site retargeting
- Digital privacy