-#1.5: Marketing-

-pls refer to previous post for the understanding different department and their function.
- previous post:
#1.1 - R&D Department
#1.2 - Purchasing Department
#1.3 - Production Department
#1.4 - Service Operations


-Marketing-
- Gotta save the best for the last, marketing is another function that we always get to see in our life. To get to the concept of marketing quickly, we should really take a overall look at how to understand it steps by steps.

- The marketing activities can be grouped broadly into four roles: Sales support, Marketing communications, Operational marketing, and Strategic marketing. Each emphasis on different role with different aspect, function, and different respond.

- The operational marketing role will be performed by a marketing function in a business, some instance will be like: Research and analysis, Contribution to strategy n marketing planning, managing brands, implementing marketing programmes, measuring effectiveness, and managing marketing teams.

- Well, for ACCA student, it is very important for us to know that there is a very close relationship between marketing and strategic management. First, the marketing audit will apply strategic control by analyse the the market's strength, weakness, and its external environment, this will aid to marketing planning, in which will help much in the Corporate strategic plans as a guidance to the overall development of an organisation.

- The corporate planning process actually depends much on the marketing department, this is why the marketing audit takes on a very important aspect of marketing control, in which the marketing plan is always concerned uniquely with products and markets.

- And also, there are four types of marketing orientation towards the customer, which is: Production orientation(demand always exceeds supply because customer will buy whatever the organisation produce), Product orientation(which is a variant of production orientation, as the firms only needs to add more features to the product for the demand to increase), Sales orientation(Product that must be sold actively and aggressively to persuade the customer to buy them, a very typical example of this would be of course, credit card~), and lastly, Marketing orientation(Which focus on a targeted market and try to satisfy its customer, in this case, it is different than production orientation because research need to be done in order to adapt the organisation to the needs and wants of the market.).

- When organisational capacity meets customer requirements, the balance can be achieve by deciding on a best, or rather, optimum marketing mix. The variables that determine the marketing mix are known as the 4Ps: Product, Place, Price, and Promotion. Of course, the ideal marketing mix will always be the one that holds a proper balance between each of these elements.

- Talking about the product, first we need to understands that product actually refers to BOTH product and service, and its usually grouped into two, core product(the product's essential and initial features) and augmentations(additional benefits). The product issue may include: Design(size and shape), features, quality and reliability, packaging, safety, ecological friendliness, image, and function.

- Place, which covers two main issues: Outlets, and Logistics. Outlets are the place where the products are sold, for example in shops or grocery store. Logistics is the management of to warehouses, storage and transportation.
So why does place takes on a very important role in marketing mix? We learn bout Product, production, and how the implication of the marketing orientation is affected by the different product and service. Well now, even if you... Yes, I mean YOU, who is reading this IS(might be) a vegetarian, do tell me, is there anyone who is not familiar with this famous fast food restaurant: McDonald's? This is why place plays such an important role, McDonald's itself has its franchises all around the world(122 country with more than 63,000 outlets world wide.) which includes.... well, tell me which country that doesn't have McDonald's outlet and I'll give you the credit for it. :D

- [McDonald's. "Bala Bap Baa Baa I m lovin' it." For those who can sing that, you're probably a 'victim' of their advertising 'trick.' Don't deny it pls.. :P]


- Price, price for the organisation, is a weapon agaisnt competitors. Price is also part of the image of the product, rightly or wrongly, because consumer tends to link the quality of the product and the price as directly proportional. Of course, not forgot to say that the price element of the mix itself covers the basic price, discounts, credit terms and interest free credit.

- Promotion, another very important aspect in the marketing mix which includes all marketing communications. Promotion is intended to stimulate the potential customer through four behavioural stages known as AIDA: Awareness of the Product, Interest in the product, Desire to buy, and Action(an actual purchase). The types of promotion can also be: Public relations, Direct selling by sales personnel, sales promotion(money-off coupons), and advertising.
Another very easy way to remember this is... by using Mr.Bill's method again: to remember it because it is... everywhere~
So whr is it this time? Lets take something very popular this time, we had fast food, so now we will go for soft drinks(sorry for the junk food part, but nonetheless its still popular right? XD). Coke, or rather ,Pepsi. The above explanation(by text or by this blog) have shown us that one of the type of promotion is advertising. The soft drink company Pepsi itself over the years has recruited many famous pop star to help them promote the Pepsi Drinks. If any of you needs something to recall back, well we got some 'hot' shots here :)


- [Coca-Cola, also known as Coke. If you never try this before, don't worry, it's not your fault, that will have to be their advertising manager's prob. :D]


- [As mentioned, over the years, the soft drink company Pepsi has put a lot of effort into advertising their product. The photo below shows us the 'Pepsi Star' from Hong Kong, Taiwan, and Korea.]

- [Not to forget our Korean pop star Rain who earns a lot by... Well, see it yourself, and don't fall for him pls :D]

- In addition for the very last part, there are also service marketing where there are three more Ps for our understanding: the People who delivered the service(smiling), the Processes by which the service is delivered (fast food delivery service), and the Physical evidence of the service(glossy brochure).

- Thats all for all, for any enquiries related to this topic as posted as any error on this blog, pls kindly tell us or do us a favor by informing the author: Song Leong. Anyone of the H&P Co would be loved to help all... =)

-#1.4: Service Operations-

-pls refer to previous post for the understanding different department and their function.
- previous post:
#1.1 - R&D Department
#1.2 - Purchasing Department
#1.3 - Production Department


-Service Operations-
- Hello all, again, after some very theoretical concept and understanding of different department in organisation that we already discussed earlier. It is time to approach something that we gets a lot more familiar in our life, just like what Mr.Bill said: Its not just bout theory, its everywhere~
Time to put it in use...

- First of all, it is very important to know that services are intangible, cannot be stored, and the purchase in services results in no transfer of property.

- And so, the nature of services that we must understand is that, it is: intangibility, Inseparability(which will be explains further on later), variability, and ownership.

- As for now, we should try to understand the implications of service provision, which includes poor service quality on once occasion, complexity, pricing, and also human resources management.

- Poor service quality on one occasion is likely to lead to widespread distrust of everything the organisation does. As what Mr.Bill explains before, the lectures and the guide he gave us for previous class is a kind of service, provided by him as the employee and also by the Sunway organisation. To take this into our example, poor service quality on one occasion is like, lets say if Mr.Will(Another of our lecturer in Sunway, lets say.) wins a lottery and he lost his money accidentally a minute after he claims his price, he Might get mad and not be able to control his EQ, so that will make him unable to concentrate in the class and are not able to teach us well, whats worse, he might even throw chairs at us since he is not really in a good mood. This kind of example is the poor service quality example, and it will only lead to widespread distrust, why? Because we will thinks that our money, the school fee that we paid is not worth the quality of the service provided, so we will complaint for the poor service quality of Mr.Will and therefore tend to thinks that Sunway is not a very nice school. Of course, Mr.Bill would never do this to us, no worries friends. :)

- Complexity and human resources management. Take an example of a barber shop, and both Isaac and Harry went to the shop with the intention of getting a nice haircut to make themself looks cooler. Complexity means that they will get their very satisfying haircut respectively and of course, since their hair style are not of the same kind, they need different barber for that. For this case, human resources management comes in place, the correct barber with the correct skill matches with their customer and ends up with correct kind of service. Simple enough to understand this concept, because if both barber ends up switching and couldn't perform as expected, then Harry will end up looking like Isaac while Isaac while end up with the looks of Harry.

- Pricing, talk about money. I think anyone of you who is currently reading this might be more sensitive than me in this issue... If not, ask the text book or ask yourself, do you always satisfy with how much they charge you everytime u get a service?(Lets say, haircut?)

- For the very last part that we need to understand about service operations, there are different dimensions of service operation. Tangibles, reliability, responsiveness, communication, credibility, security, competence, courtesy, understanding customers needs, and access. If these proves too hard for anyone of u to comprehend it, pls kindly ask the author for this topic: Song Leong of H&P CO for more ridiculous examples... with the hope that it will not insult more ppl, and will make u all understand.

- So for now, the above are the general understanding plus the details about the service operations, it can be referred to all kinds of service in business, Inclusively those that I took as example.

- Next: #1.5 - Marketing

-#1.3: Production Department-

-pls refer to previous post for the understanding different department and their function.
- previous post:
#1.1 - R&D Department
#1.2 - Purchasing Department

-Production Department-
- Generally, the production function plans, organises, directs, and controls the necessary activities to provide products and services, creating outputs which have added value over the value of inputs.

- To explains further the definition of production function, we should know that the process of adding of value into the input usually consist of the following that occupies the production manager's attention: scheduling jobs on machine, assigning labour to jobs, control the quality, improving the methods of work, and wastage management(to minimize it).

- The production manager needs to manage the longer-term decisions to set up the production organisation, the usual longer-term decisions includes: Selection of equipment and processes, job design and methods, factory location and layout, ensuring the right number and skills of employees.

- Meanwhile, the short-term decisions that are concerned with the running and control of the organisation includes: Production and control, Labour control and supervision, Quality management, Inventory control, and Maintenance. These are the short-term decisions that a production managers have to decide on.

- Yes, while the understanding of these departments remains theoretical, these department are closely related to one another, especially for longer-term decisions, the activities of production function must be integrated with other functions.

- For examples, product design is co-ordinated with R&D, Job design is with human resources, quantities of production is related to sales department, and work force management is with human resources department.

- Next #1.4: Service Operations

-#1.2: Purchasing Department-

-pls refer to previous post for the understanding different department and their function.
- previous post: #1.1 - R&D Department

-Purchasing Department-
- Purchasing is a vital element of strategy, so usually the most senior purchasing executive may be on the board of directors. But when raw material becomes a very important cost, the purchasing officer may work in the production function.

- Purchasing manager, officer, or executive has the main responsibilities of deciding or to obtain the best purchasing mix, which includes these important aspects: Quality, Quantity, Price, and Delivery.

- To ensure that the size and the timing of purchasing orders is of optimum level, the quantity of purchase plays a very important role in this. As such, a system of inventory control will set the optimum reorder levels to ensure the economic order quantities(EOQ) are obtained for individual inventory items. Though it is generated by computer, the Optimum Reorder Levels and the EOQ can be calculated manually as well, but I wasnt sure whether we will learn that further in our ACCA paper or not.

- While the quality of the input might affects the quality of output and also the efficiency of the production function, the price of purchasing input is of equal importance as well. The purchasing manager should always pick the best value over a period of time, considering quality, delivery, urgency of order, inventory-holding requirements and so on.

- As for the aspect of Delivery in the purchasing mix, the lead time between placing and inventory of an order is very important in inventory control and production planning. The efficiency of these also depends on how the delivery timing and method are controlled.

- Other than deciding the best purchasing mix, the purchasing manager also have the responsibilities to control: Inputs for production, inputs for administration, cost, liaison with the R&D department, management of supplier, maintenance of inventory levels, and obtaining various information for the evaluation of purchasing alternatives.

- Effective purchasing can affect profit in this three ways: It obtains the best value for money, assists in meeting quality targets for the firm's long-term marketing strategy, and it minimises the inventory-holding costs.

- Next #1.3: Production department

-Organisational Departments and Functions: #1.1-

As for the key term and exact definition for this chapter and any sub-topic inclusive, I think everyone should be reading it in our text book AND Reference book, etc. So... to explain the understanding of H&P Co. in this topic, here is how we explain it:
For better understanding, pls note:
Bold - Key word/terms
Red - Topic(s)
Green - Definition/understanding
Italic - Definition/understading

Here we will talk about a few main departments and their function in an organisation. Which includes:
1.Research and development
2.Purchasing
3.Production
4.Service Operations
5.Marketing

So we will start off with -Research and development department-
- As we all know research may be pure, applied, or development. With the intention to improve products or processes, this is why R&D come in handy when this department co-ordinated with marketing. Not to forget that the credits usually goes to the specialist staff employed to conduct R&D (Research and Development.)

- Pure research is a kind of research to obtain new knowledge or wisdom, to make things sound simpler, the time when there is no any text or reference book about Accounting in Business, the author of either Sunway-TES text buk, or BPP(for instance) have to conduct their own research which starts from zero to understand how accountant relates in business and how different department co-ordinates with each other to be more efficient in heading towards the company's goal.

- As for applied research, it is like our Sunway-TES text book, from all the various source of ACCA knowledge, it combines different producer's text book data And add in their own knowledge and hence, our Sunway-TES ACCA Text book is produced, taa-daa~
Thats for applied research, which has a more specific practical application.

- Development is the use of existing knowledge to produce new product or system, in this case, we can be viewed as the specialist staff which conduct our own research on this topic about 'organisational departments and functions', and this blog that we have to write out to explain our understanding based on what we learned is called development.

- As in overall, the R&D department can be divided into two categories: The Product Research, and the Process Research.

- Product Research focus more on creating new products, while process research concentrates more on improving the way or the efficiency which the products or services are made or delivered.

- The aspects of Process Research includes Processes, Productivity, Planning, and Quality management. All of these aspects are important for quality enhancement and increment of efficiency.

Info for The H&P Company group members ONLY

Please be alerted that all of you group members will be given the password to gain full access to this blog for posting and editing purpose. The password for both the blog as well as the gmail account linked to it is the same but shall not be revealed here for privacy purpose.You will also receive full access to the Gmail account mentioned. Gmail account registration is required to set up this blog and i thought maybe we can also use the gmail account as our official email as a group for correspondence with lecturer if we need to do so collectively as a group. However if your correspondence needs are personal, please refrain from using the gmail account but do use your own email account. Last but not least, feel free to touch up on the blog to make it more interesting in appearance but let us show some respect for each others' posting by not editing them without the consent of the original author. Thank You.

Regards, Harry Chew

How does an accountant relate to business ? (Pre-Introduction)

The question above which is the title of this posting often emerge in the mind of young people who intend to join the accounting profession or for others who may want to know more about the role of accountant in business rather than just being satisfied with the common perception that being an accountant is all about dealing with facts and figures etc. balance sheet, income statement and so on.

To aid us in explaining our point of view on this subject matter, let us first define a few terms which will be related directly to the question (title of post) which are the terms "business" and "accountant" and those terms that may be used in the explanation later.
The definition of the terms are as followed:
BUSINESS:work relating to the production, buying and selling of goods and services
ACCOUNTANT: a person whose job is to keep financial account
FINANCIAL: involving or relating to money
RISK:the possibility that something unpleasant or negative may happen.

Having define all the essential terms, it is necessary to look back at history on accounting.
A short excerpt from Wikipedia may give us an idea on how long accounting though during the time not in monetary terms but rather in the exchange of goods and the quantities involved since barter trade came into existence first before money was commonly accepted as a medium of exchange.
"Accountancy's infancy dates back to the earliest dates of human agriculture and civilization (the Sumerians in Mesopotamia, and the Egyptian Old Kingdom). Ancient economic thought of the the Near East facilitated in the creation of accurate quantities and relative value of agricultural products, methods that were formalized by trading and monetary systems by 2000BC)"

It is important to note that while business may be carried out with or without money with the aforesaid explanation, however monetary system which set values for tangible things or services using numbers and has now become an international yardstick and hence further discussion on the subject matter will be related to the monetary system. Through a long period of time along with Luca Pacioli contribution's in the field of accounting and who was also thought as the father of modern accounting, a certain set of principles and guidelines has been laid down which is duly applied in contemporary accounting practices depending on the arising needs of different businesses as well as legal obligation.

Having given a rather informative introduction which has not answer the question, lets move on to a few points which may be relevant to our discussion now.
1. Accountant helps in managing money or to be more specific cash flow of the company for continual sustainability of the business. It it worthwhile to note that while each company has resources which may or may not be measured by money, the resources available are finite and must be used efficiently to create the desired end point(s). To stick to our parameter of our discussion, we will talk about resources in monetary terms. For example, a company has a certain amount of money and may choose to acquire a land as an asset. However several land are sold at the price within the affordability range of the company but are located in different places. The company has only the privilege to buy a piece of land out of the several options made available due to limited fund. Hence an accountant may step in and analyze the profitability of the acquisition of each asset and to make suggestion to the board of directors or top management level on which choice will be most suitable for the interest of the company in the long run. This is the basis for "investment centre" as stated in ACCA F1 Chapter 1 where the term "return on capital employed (ROCE)" will come into picture

2.An accountant plays the role in the final preparation of financial or management report of a business. It is important to know the difference between this two report but we are not going into the details. Ultimately the goal of these report is to allow stakeholders know the overall performance and standing of a company measured yet again in monetary values based on the parameter system and hence aid them in formulation of new strategy or further fine tuning of existing strategy taking into consideration the intended direction on the company in the future. Speaking on this part, the crediblity of an accountant is very important in preparing an accurate and complete report which are key attributes to good reporting as stated in ACCA F2 syllabus chapter 1:Accounting in Management. This is because inaccurate information may lead to wrong decision making which may eventually lead to the demise of a business if no corrective steps are taken.

3.With regards to point no.2, an accountant also has the responsibility things that are not quantified by the monetary system yet somehow will affect the monetary figures that appear on different aspects of financial reporting. This comes in during analysis where one try to consider how the one thing affect the other thing or simply "walking backward" by finding out what factors produces effect in monetary terms.

4.As mentioned much earlier on legal obligation, an accountant has the duty to ensure financial reporting of the company is in line with the standards set whether by local government or regulatory bodies in the international arena. Since monetary resources are limited, it would not be in the best interest of the company to pay high tax. Hence equipped with the knowledge, an accountant can act as adviser to help company save money by paying less tax on certain key areas in compliance with the taxation law laid down and hence bring about the efficient use of monetary resources

5.Accountant are in a position where they can easily know how a business is performing. In the simplest way for a business to be performing for sustainability, the benefit produced must outweighed the cost of using available resources. Hence an accountant may be able to suggest sales target to maintain profitability of a business by taking into consideration that the revenue must outnumbered the cost of using various resources used. This is when collaboration between the accounting department which is involved in giving account of the performance of the company and the marketing and sale department which identify need of consumers and selling products becomes an important relationship with regards to the context

6.Yet linking to point no.2, an accountant must consider the risk factor in all business decision. While risk may or may not be realized and there goes a saying "the higher the risk, the greater the gain" , it is essential that the accountant list out the risks for each decision or policy drafted out to strike a balance between safety and risk so as to maintain control over the business and not fully subjecting it to the volatility of the market and the demand of human being. It is important to note that based on the parameter set, there are no such things as good risk or bad risk, but only high risk or low risk.

7.An accountant on the management level may help in identifying the weak link between different levels or groups in the company as one of the main job of accountant is to ensure effective communication of financial report. While the term link may be subjected to various interpretation, here we would like to state that the link mean the transfer of financial information for the purpose of overall evaluation of the business by top level management. To think of it in deeper sense, it also allow the accountant to act as an investigator and detect fraudulent act which may exist as anomalies in financial reporting and cause things to not add up, thus showing the weak link. That's when internal auditing come into the picture

8.While an accountant may constantly evaluate the efficiency of the use of resources which may lead to different business investment decision and can be linked to the first point, an accountant may provide some other important information which may be financial or non financial in nature through the management information system (MIS) to aid the company's decision maker to restructure itself internally and not necessarily only when the company has file for bankruptcy order in order to maintain the efficient use of limited resources to sustain itself as an organization and to be prepared to face tough competition and other uncertainties.

Having said all these, we hope that we had at least painted a picture that everyone could understand even if not all of it. It is with great hope that by furthering our understanding in accounting by moving forward in our ACCA syllabus as time goes by that we can a greater understanding and when being asked this question again, we could answer it from more perspective and with greater maturity. Thank You

Posting done by Harry Chew courtesy of ideas from members of The H&P Company, Mr.Bill and classmates


(p.s Mr.Bill, I'm not able to come out with 10 points as i tried my best while at the same time taking care not to overlap points but rather cross linking it in an appropriate manner. Do point out to me any concept or ideas i may had misunderstood to prevent further misunderstanding as we progress forward according to the layout of the syllabus)

Welcome

Greetings to all visitors as well as teammates and lecturers. The blog intended to be set up has finally been realized. May it bring benefit to all who read and post articles in various ways. Please be reminded all who has full access in posting and editing of this blog that while you are free to express your own view and opinion on a subject matter, please do consider the group factor and thus making it your guiding principle when using this blog to strike a balance between consideration of your own as well as collective(group) opinion when posting. Lastly, for all general readers, this blog is by no mean belonged to a single individual but is set up for a group and we are open to CONSTRUCTIVE comments and criticisms
Regards, Harry Chew