Reference prices are latent internal norms
that consumers use as a basis against which to
compare current prices (Tellis, 1998; Winer,
1986). Reference prices are not observed and
cannot be ascertained by survey because of the
problem of demand bias. Even if they did not
exist, consumers would be tempted to answer in
the affirmative about them just to please the
researcher. The best way to test for reference
prices is by the prediction of behavior with
and without reference prices. For example, a
researcher can ascertain a model’s improvement
in fit with the data, if any, from the inclusion of
terms that capture reference price.
Current research suggests at least two components
of reference price (Rajendran & Tellis,
1994): first, a temporal or internal reference
price based on memory that probably develops
in response to past prices a consumer has paid
and, second, an external or contextual reference
price based on visible prices that probably
relates to the prices of other competing brands
available to the consumer at the time of purchase.
A complete model of response to pricing
should capture these effects of reference price.
Any of the models discussed above can account
for reference price effects by including independent
variables for these effects.
Friday, November 26, 2010
Product Managers and Business Analysts are different
Basically, Product Managers work at companies that create software that
sells in a market. They are outward facing. They know they need to seek out
customers and find out what they need to make their lives better. Product
Managers are concerned with competitor products and change outside the
company.
In contrast, Business Analysts work at companies which develop software for
their own internal use, or on specific developments for other companies
which will be used internally. Thus they are normally found in corporate IT
departments and external service provider (ESP) companies.
Business Analysts look inwards, they look at the operations and needs inside
a company. They know exactly who their users are, indeed, in some cases
there may only be one user. When Business Analysts look outside the
company they are looking at suppliers as alternatives to development not as
competitors in the market.
sells in a market. They are outward facing. They know they need to seek out
customers and find out what they need to make their lives better. Product
Managers are concerned with competitor products and change outside the
company.
In contrast, Business Analysts work at companies which develop software for
their own internal use, or on specific developments for other companies
which will be used internally. Thus they are normally found in corporate IT
departments and external service provider (ESP) companies.
Business Analysts look inwards, they look at the operations and needs inside
a company. They know exactly who their users are, indeed, in some cases
there may only be one user. When Business Analysts look outside the
company they are looking at suppliers as alternatives to development not as
competitors in the market.
Wednesday, November 24, 2010
dividend payout
1. There may be investors, such as retired individuals, who prefer current
income to growth in stock value. However, this should not matter since
investors could sell a portion of the low dividend paying stocks to
supplement cash flow.
• In the real world, however, the sale of securities involves transactions
costs that may outweigh the differential in payout.
• Therefore, some individuals are better off holding high dividend paying
securities.
2. After accepting all positive NPV projects, firms should payout dividends
out of extra cash if the corporate tax rate > the individual tax rate.
• DEBATE: Therefore, the debate on which dividend policy increases
the value of the firm is still unresolved from a tax viewpoint.
• Only if there exists an unsatisfied tax clientele may the firm increase its
value in the short run.
income to growth in stock value. However, this should not matter since
investors could sell a portion of the low dividend paying stocks to
supplement cash flow.
• In the real world, however, the sale of securities involves transactions
costs that may outweigh the differential in payout.
• Therefore, some individuals are better off holding high dividend paying
securities.
2. After accepting all positive NPV projects, firms should payout dividends
out of extra cash if the corporate tax rate > the individual tax rate.
• DEBATE: Therefore, the debate on which dividend policy increases
the value of the firm is still unresolved from a tax viewpoint.
• Only if there exists an unsatisfied tax clientele may the firm increase its
value in the short run.
The Different Types of Dividends
1. Cash dividends
These are the most common and are usually paid four times a year.
2. Stock dividends
– Stock dividends are not true dividends in that a distribution of
stock does not affect the value of the firm or the wealth of the
shareholder. These dividends are paid out of Treasury stock.
3. Stock split
– Similar to a stock dividend. The NYSE requires share
distributions of less than 25% to be treated as stock dividends.
4. Share repurchases
– The company repurchases the stock. Shareholders pay tax only on
the capital gains portion.
– Same effect as a regular dividend as cash LEAVES the
corporation.
These are the most common and are usually paid four times a year.
2. Stock dividends
– Stock dividends are not true dividends in that a distribution of
stock does not affect the value of the firm or the wealth of the
shareholder. These dividends are paid out of Treasury stock.
3. Stock split
– Similar to a stock dividend. The NYSE requires share
distributions of less than 25% to be treated as stock dividends.
4. Share repurchases
– The company repurchases the stock. Shareholders pay tax only on
the capital gains portion.
– Same effect as a regular dividend as cash LEAVES the
corporation.
Measures of Inflation
Consumer price indices (CPIs) which measure the price of a selection of goods and services purchased by a "typical consumer."
Cost-of-living indices (COLI) are indices similar to the CPI which are often used to adjust fixed incomes and contractual incomes to maintain the real value of those incomes
Producer price indices (PPIs) which measure the prices received by producers. This differs from the CPI in that price subsidization, profits, and taxes may cause the amount received by the producer to differ from what the consumer paid. There is also typically a delay between an increase in the PPI and any resulting increase in the CPI. Producer price inflation measures the pressure being put on producers by the costs of their raw materials. This could be "passed on" as consumer inflation, or it could be absorbed by profits, or offset by increasing productivity. In India and the United States, an earlier version of the PPI was called the Wholesale Price Index.
Commodity price indices, which measure the price of a selection of commodities. In the present commodity price indices are weighted by the relative importance of the components to the "all in" cost of an employee.
The GDP deflator is a measure of the price of all the goods and services included in Gross Domestic Product (GDP). The US Commerce Department publishes a deflator series for US GDP, defined as its nominal GDP measure divided by its real GDP measure.
Capital goods price index, although so far no attempt at building such an index has been made, several economists have recently pointed out the necessity of measuring capital goods inflation (inflation in the price of stocks, real estate, and other assets) separately.[]citation needed Indeed a given increase in the supply of money can lead to a rise in inflation (consumption goods inflation) and or to a rise in capital goods price inflation. The growth in money supply has remained fairly constant through since the 1970s however consumption goods price inflation has been reduced because most of the inflation has happened in the capital goods prices…
Cost-of-living indices (COLI) are indices similar to the CPI which are often used to adjust fixed incomes and contractual incomes to maintain the real value of those incomes
Producer price indices (PPIs) which measure the prices received by producers. This differs from the CPI in that price subsidization, profits, and taxes may cause the amount received by the producer to differ from what the consumer paid. There is also typically a delay between an increase in the PPI and any resulting increase in the CPI. Producer price inflation measures the pressure being put on producers by the costs of their raw materials. This could be "passed on" as consumer inflation, or it could be absorbed by profits, or offset by increasing productivity. In India and the United States, an earlier version of the PPI was called the Wholesale Price Index.
Commodity price indices, which measure the price of a selection of commodities. In the present commodity price indices are weighted by the relative importance of the components to the "all in" cost of an employee.
The GDP deflator is a measure of the price of all the goods and services included in Gross Domestic Product (GDP). The US Commerce Department publishes a deflator series for US GDP, defined as its nominal GDP measure divided by its real GDP measure.
Capital goods price index, although so far no attempt at building such an index has been made, several economists have recently pointed out the necessity of measuring capital goods inflation (inflation in the price of stocks, real estate, and other assets) separately.[]citation needed Indeed a given increase in the supply of money can lead to a rise in inflation (consumption goods inflation) and or to a rise in capital goods price inflation. The growth in money supply has remained fairly constant through since the 1970s however consumption goods price inflation has been reduced because most of the inflation has happened in the capital goods prices…
INFLATION
Inflation is a rise in the general level of prices of goods and services over time. "Inflation" is also sometimes used to refer to a rise in the prices of some specific set of goods or services, as in "commodities inflation" or "core inflation". It is measured as the percentage rate of change of a price index.
Culture as a Tool of the General Manager
Strong culture is one of the most powerful tools that a skilled manager can wield. As his or her
organization grows, it soon becomes impossible for the general manager personally to be involved in
every important decision, such as who to hire or promote, when to kill an ageing product line, or
whether to bid or not bid on a particular order. The most the manager can hope for is that all of the
people making decisions in the organization will make them in a way that is consistent with the goals
of the company. The sum of the many autonomous decisions made by various employees must have
the cumulative effect of taking the organization where the manager wants it to go. The only way this
can happen is if the organization has developed clear priorities that employees instinctively employ
as criteria in their dispersed decision-making activities. In other words, strong culture is essential to
consistent decision-making as the organization’s size and scope expand.
Similarly, it becomes impossible for the general manager to participate in or oversee every process
that solves problems and creates value in the organization, such as the new product development
process or the process for following up on new sales leads. Inevitably, as an organization grows,
these things must be done by more and more people, and yet the manager must ensure that the
quality of the output of each of these processes is consistent with the company’s strategic goals.
Again, a strong culture—within which the best ways of getting the job done are instinctively assumed
by all members of the organization—is a powerful tool by which effective managers ensure
consistency.
organization grows, it soon becomes impossible for the general manager personally to be involved in
every important decision, such as who to hire or promote, when to kill an ageing product line, or
whether to bid or not bid on a particular order. The most the manager can hope for is that all of the
people making decisions in the organization will make them in a way that is consistent with the goals
of the company. The sum of the many autonomous decisions made by various employees must have
the cumulative effect of taking the organization where the manager wants it to go. The only way this
can happen is if the organization has developed clear priorities that employees instinctively employ
as criteria in their dispersed decision-making activities. In other words, strong culture is essential to
consistent decision-making as the organization’s size and scope expand.
Similarly, it becomes impossible for the general manager to participate in or oversee every process
that solves problems and creates value in the organization, such as the new product development
process or the process for following up on new sales leads. Inevitably, as an organization grows,
these things must be done by more and more people, and yet the manager must ensure that the
quality of the output of each of these processes is consistent with the company’s strategic goals.
Again, a strong culture—within which the best ways of getting the job done are instinctively assumed
by all members of the organization—is a powerful tool by which effective managers ensure
consistency.
Organization’s Culture
Culture is a unique characteristic of any organization. While the phenomenon of organizational
culture is difficult to define succinctly, understanding it can help a manager predict how his or her
organization is likely to respond to different situations; to assess the difficulties that the organization
might experience as it confronts a changing future; and to identify the priority issues for the
leadership to address as they prepare the organization to compete for the future. Organizational
culture affects and regulates the way members of the organization think, feel and act within the
framework of that organization. Culture is the result of common learning experiences. Because
culture forms the basis of group identity and shared thought, belief, and feeling, one of the most
decisive and important functions of leaders—particularly the founders of a company—is the creation
and management of its culture.
culture is difficult to define succinctly, understanding it can help a manager predict how his or her
organization is likely to respond to different situations; to assess the difficulties that the organization
might experience as it confronts a changing future; and to identify the priority issues for the
leadership to address as they prepare the organization to compete for the future. Organizational
culture affects and regulates the way members of the organization think, feel and act within the
framework of that organization. Culture is the result of common learning experiences. Because
culture forms the basis of group identity and shared thought, belief, and feeling, one of the most
decisive and important functions of leaders—particularly the founders of a company—is the creation
and management of its culture.
TIPS TO REDUCE STRESS
1) CREATE MIND/BODY BALANCE
• Practice deep breathing – This is both a short and long-term relaxation option. For a quick
way to de-stress, take 10 deep breaths. Focus on breathing in through your nose and out
through your mouth. As you exhale, imagine all of your stress and worries flowing out of
your body. Using breathing exercises daily will leave you feeling calmer.
• Exercise – Many studies have demonstrated that exercise is one of the most effective forms
of stress relief. Exercise can also counteract depression. Try to pick an activity you enjoy.
From a low-intensity activity like walking to a high-intensity activity like kick-boxing, all
forms of physical exercise can be a big help.
• Sleep – This is one of the hardest areas to adjust for most people. Sleep is essential but
sometimes the pressures of assignments and other commitments mean that we fall well
below the 7-9 hours recommended. If you know you have a late night ahead, consider
resting for 30 minutes to an hour in the afternoon.
• Eat well – Taking care of your body by giving it proper nutrients is extremely important.
Try to eat fruits, vegetables, whole grains, and lean proteins. Drink plenty of water and take
a multivitamin. Avoid excess sugar, caffeine, and other substances that will cause your
energy levels to fluctuate dramatically.
2) POSITIVELY ADJUST YOUR ATTITUDE
• Know and respect your limits – Many of us try to impose order or control on areas over
which we have little power. When facing a difficult situation, take a step back and evaluate
which parts of the situation you have control over (your actions, etc.) and which parts you
do not (others’ behavior). If you realize a situation is largely out of your hands, let it go
rather than fighting it.
• Be an advocate for yourself instead of a critic. – Celebrate your successes rather than
dwelling on what you perceive as your weaknesses.
• Visualize success – Before any big event, visualize the scenario. Try to picture all aspects of
the situation and how you might feel during the event. This kind of mental practice can
make the actual event seem far less intimidating.
3) REACH OUT
• Shift your focus – When stressed, many people focus their thoughts inward. This internal
focus can heighten stress and anxiety. Rather than constantly thinking about the issues that
are causing you stress, try to focus more on the external environment.
• Talk to others – Sharing your feelings of frustration, worry, and more with others you are
close to can help alleviate stress. Others’ perspectives can also help you see that while
things may appear bleak, they are actually not as bad.
• Practice deep breathing – This is both a short and long-term relaxation option. For a quick
way to de-stress, take 10 deep breaths. Focus on breathing in through your nose and out
through your mouth. As you exhale, imagine all of your stress and worries flowing out of
your body. Using breathing exercises daily will leave you feeling calmer.
• Exercise – Many studies have demonstrated that exercise is one of the most effective forms
of stress relief. Exercise can also counteract depression. Try to pick an activity you enjoy.
From a low-intensity activity like walking to a high-intensity activity like kick-boxing, all
forms of physical exercise can be a big help.
• Sleep – This is one of the hardest areas to adjust for most people. Sleep is essential but
sometimes the pressures of assignments and other commitments mean that we fall well
below the 7-9 hours recommended. If you know you have a late night ahead, consider
resting for 30 minutes to an hour in the afternoon.
• Eat well – Taking care of your body by giving it proper nutrients is extremely important.
Try to eat fruits, vegetables, whole grains, and lean proteins. Drink plenty of water and take
a multivitamin. Avoid excess sugar, caffeine, and other substances that will cause your
energy levels to fluctuate dramatically.
2) POSITIVELY ADJUST YOUR ATTITUDE
• Know and respect your limits – Many of us try to impose order or control on areas over
which we have little power. When facing a difficult situation, take a step back and evaluate
which parts of the situation you have control over (your actions, etc.) and which parts you
do not (others’ behavior). If you realize a situation is largely out of your hands, let it go
rather than fighting it.
• Be an advocate for yourself instead of a critic. – Celebrate your successes rather than
dwelling on what you perceive as your weaknesses.
• Visualize success – Before any big event, visualize the scenario. Try to picture all aspects of
the situation and how you might feel during the event. This kind of mental practice can
make the actual event seem far less intimidating.
3) REACH OUT
• Shift your focus – When stressed, many people focus their thoughts inward. This internal
focus can heighten stress and anxiety. Rather than constantly thinking about the issues that
are causing you stress, try to focus more on the external environment.
• Talk to others – Sharing your feelings of frustration, worry, and more with others you are
close to can help alleviate stress. Others’ perspectives can also help you see that while
things may appear bleak, they are actually not as bad.
CAUSES OF STRESS MANAGEMENT
Many external and internal factors can cause stress.
• Environment – We all have highly individual responses to the world around us. One person
may feel equally comfortable in a small town and a big city whereas another person may be
overwhelmed by a city’s noise, intense pace, and crowded streets.
• Events – From taking final exams to introducing your significant other to your family, many
situations can lead to stress. Some examples of stressful events include personal or family
illness, increased work load, roommate conflicts, and more. Multiple events often combine and
can leave you feeling weighed down.
• Expectations – Many of us demand a lot from ourselves and from others. Examples of
expectation-related stress include receiving lower grades than expected and not getting certain
internships or jobs. Stress has a close link with perfectionism.
• Environment – We all have highly individual responses to the world around us. One person
may feel equally comfortable in a small town and a big city whereas another person may be
overwhelmed by a city’s noise, intense pace, and crowded streets.
• Events – From taking final exams to introducing your significant other to your family, many
situations can lead to stress. Some examples of stressful events include personal or family
illness, increased work load, roommate conflicts, and more. Multiple events often combine and
can leave you feeling weighed down.
• Expectations – Many of us demand a lot from ourselves and from others. Examples of
expectation-related stress include receiving lower grades than expected and not getting certain
internships or jobs. Stress has a close link with perfectionism.
STRESS MANAGEMENT
stress ('stres)
bodily or mental tension resulting from factors that tend to alter an existent
equilibrium
For many people, stress is a daily reality. Some events, such as an important sports competition or
a deadline for a paper, can cause stress that helps motivate us to perform at our best. Unfortunately,
stress often becomes a negative presence in our lives. As the above definition states, stress throws
us off balance and can have serious health consequences if left unchecked. Learning how to
manage stress will make you more able to handle challenging situations and significant events in
your life.
bodily or mental tension resulting from factors that tend to alter an existent
equilibrium
For many people, stress is a daily reality. Some events, such as an important sports competition or
a deadline for a paper, can cause stress that helps motivate us to perform at our best. Unfortunately,
stress often becomes a negative presence in our lives. As the above definition states, stress throws
us off balance and can have serious health consequences if left unchecked. Learning how to
manage stress will make you more able to handle challenging situations and significant events in
your life.
Measuring diversity
The present requirements on the (diversity) concept have made it mandatory to have a straightforward way
of measuring the very diversity in concrete situations or markets. This led to the search of indicators or
indexes to assess diversity. Supposing a suitably characterised context is given, basic elements for the
construction of such indexes are a well-defined set of objects, outcomes or types, say 1, 2, …, n, and an
associated frequency (or probability) distribution pi , 1 i n, i pi = 1.
A common mistake, still present in many studies and arguments, is to associate diversity with the sheer
multiplicity of types (variety), forgetting that their relative frequencies are also crucial for defining “the
amount of diversity” (balance). In spite of different options duly taking into account the two basic
constituents above, the Shannon-Wiener entropy index seems to be most favoured and, to many a number
of viewpoints, the best candidate. Indeed, since Shannon (1948), several proofs of optimality of the entropy
index have been produced. Its definition, as known, is:
HSW = - i pi lnpi ,
of measuring the very diversity in concrete situations or markets. This led to the search of indicators or
indexes to assess diversity. Supposing a suitably characterised context is given, basic elements for the
construction of such indexes are a well-defined set of objects, outcomes or types, say 1, 2, …, n, and an
associated frequency (or probability) distribution pi , 1 i n, i pi = 1.
A common mistake, still present in many studies and arguments, is to associate diversity with the sheer
multiplicity of types (variety), forgetting that their relative frequencies are also crucial for defining “the
amount of diversity” (balance). In spite of different options duly taking into account the two basic
constituents above, the Shannon-Wiener entropy index seems to be most favoured and, to many a number
of viewpoints, the best candidate. Indeed, since Shannon (1948), several proofs of optimality of the entropy
index have been produced. Its definition, as known, is:
HSW = - i pi lnpi ,
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