Case Study «What’s in a name?»

Your company manufactures bicycles. It is about to launch a new adult bike: a cross between a mountain bike and a tourer (a so-called hybrid). The bike will be priced for the top end of the market and hopes to attract buyers in the AB social economic class. As with all such products, the name is crucial. It needs to be a name which can be used across the world as you hope to sell it into both the domestic and export markets.

The agenda below is designed to support the brainstorming process.

AGENDA

1. Presentation of the product

2. Presentation of a typical customer

3. Brainstorming on the name

4. Decision

Notes to the agenda

1. Presentation of the product

The Product Manager will present the new bike.

2. Presentation of a typical customer

The Marketing Manager will talk about the target customer.

3. Brainstorming on the name

The meeting will brainstorm the name.

4. Decision

A decision will be made.

Brainstorming

Think over the task and sound your decision, providing with effective arguments.

Travel Costs

The company you work for wants to reduce the amount it spends on business trips abroad.

You have been asked to suggest ways of doing this.

Discuss the situation together and decide:

• how the total number of business trips might be reduced

• how the cost of some trips might be reduced

• how to make business trips more productive.

INDIVIDUAL PROJECT / Persuasive Speech:

Promoting an Internet Site (1 by choice)

Unit 11 theory: «Activity-based costing (abc)»

«ABC offers management accurate information by delineating costs and tracing them to individual products and product lines»

Robert s. Kaplan

ABC is an accounting method, developed in 1980s, which means a business can accurately measure data about the true operating costs of specific activities such as planning and distribution and associate them to the goods and services produced. It empowers a business to decide which products, services and resources increase profitability and which add to losses. Harvard Business School Professor Robert S. Kaplan is often seen as ABC’s founding father. After a slack period during the 1990s because of the difficulty of putting the theory into practice, in 2007 he and Steven Anderson published a new book to make ABC work better called Time-Driven Activity-Based Costing (TDABC), where they tried to relate the measurement of cost to time.

Traditional cost-accounting methods start with labor and materials as the two largest costs in producing goods and services, but take on account of operating costs, as these were minimal when traditional accounting methods emerged with factory line production. Overhead costs such as electricity and water have risen and product ranges have grown rapidly, but companies still relied on the traditional method and accounted for these overhead costs in an uncoordinated way.

In comparison, ABC allots factory and corporate overhead costs as well as labor and capital resources costs to business activity categories and it enables an assessment to be made of the total cost of producing each product or service.

FOLLOW-ON QUESTIONS…

1. What are the benefits/drawbacks of ABC accounting method and when was it implemented?

2. Which are 4 common communicative “channels” within an organization?

3. How can they - 4 common communicative “channels”, communicate effectively?

4. What factors influence people when they buy any product or service?

5. What do you think of the following proverbs about price and value: “What costs nothing is worth nothing”, “Take a second look. It costs you nothing” and “Price is what you pay. Value is what you get.”