Text B. The different kinds of balances
Ledger Balances.
Ledger balances are the balance figures shown on your statement even though they include balances that don’t really exist at that time because the bank holding your account has not had time to collect recently deposited checks from the issuing bank.
If your statement period ends the same day you make a deposit to your account, for example, your statement will show an increase in your balance equal to the amount of that deposit. The statement will not show that in fact that check was not delivered to the bank of account until after the close of business that day, so that the money represented by the check had not actually been collected as of the end of the business day. the deposit at that point is what is known a ledger balance; until the funds are actually collected the next day, the deposit in your account is incapable of earning any interest for your bank.
Collected Balances.The balance, called a collected balance or a good balance, is money that the bank can actually invest, spend, or pay out as it chooses.
Many banks do pay interest on a deposit beginning with the day of deposit, but they are actually paying interest for at least one day, maybe two, on money they haven’t received. While “interest from the day of deposit” is a catchy slogan, it is also an expensive practice, and, as computer technology advances and becomes more affordable, more and more banks are acquiring the ability to defer payment of interest on deposits until the money is actually collected.
Available Balances.Available balances, or investable balances, represent the actual balances on which the bank can earn a return. The income earned from the investment of those available balances is typically used by the bank to offset the expenses incurred in the normal day-to-day operation of that account.
Deferred Funds.Funds that have been deposited in a bank but that the bank will not permit to be withdrawn for a period of time ranging from a few days to as many as 30 days are called deferred funds. In most commercial banks are deferred on new accounts only, especially if the new account is that of someone unknown to the bank.
Banks follow the practice of deferring balances to minimize the likelihood of fraud or embezzlement. But such schemes impact and offend good customers. So, since 1990, availability of funds may not be deferred for more than two days for local checks or more than five days for nonlocal checks. Funds availability regulations also recognize the new-account problem and do not limit restrictions on availability of deposits into new accounts fir the first 30 days, with the exception of treasury and government checks and cashier’s checks.
Compensating Balances.Banking charges for a variety of services are often paid by keeping a specified balance in a checking account, as opposed to having the bank deduct payment from your account for each service provided. This compensating balance offsets the bank’s cost of servicing account relationship. The compensating balance method of payment is common in cash management services. If you negotiate a bank loan or line of credit, you may have to keep part of the loan proceeds in a checking account. The compensating balance is the cost of maintaining that credit availability. In exchange for keeping part of the loan in your checking account, you may get a break in the interest rate charged on the loan.
Приложение 3.
Marketing
Branding strategies. Branding is appropriate both for services and physical products.
No Brand Identity. Many small and medium-sized manufacturers do not have an established brand identity even though the company name is printed on the package or item. The lack of financial resources and marketing capabilities makes it difficult for a firm with an unknown brand to build buyer awareness in the marketplace. Major expenditures are required to introduce and promote the brand. A firm in this situation often relies on marketing intermediaries to encourage buyers to purchase the unknown brand. An unknown brand needs the reputation and support of wholesalers and retailers. Buyers relate an unknown brand to the intermediaries that carry the brand. If their perception of the seller is favourable, then the unknown brand benefits. Typically, the producer of an unknown concentrates its marketing efforts on wholesalers and retailers rather than end-users. Unknown products may develop consumer loyalty over time if users’ experience with the product is favourable, and if it is purchased frequently. Through extended use, the brand may develop customer loyalty. Even if a firm does not have the resources to aggressively promote a brand, management should consider assigning a brand name, particularly if the item is repurchased on a continuing basis. Favourable experience and word-of-mouth promotion with friends can help to build the brand’s reputation with buyers.
Management may decide not place a brand name on a product on order to offer a generic option to buyers. This strategy is used by large manufacturers and intermediaries attempting to attract buyers who want lower-priced, nonbranded equivalents to brand name products, such as tissues, paper towels, and various other frequently purchased products. In this instance, the use of a brand name is inappropriate.
Private branding.Assignment of a brand name by a nonmanufacturer is private branding. For example, Sears, Roebucks’s products are produced under private branding arrangements with various manufacturers. retailers with established brand name, such as Target, The Limited, and Wal-Mart, contract with producers to place the retailers brands on the products manufactured. The major advantage to the producer is eliminating the costs of marketing to end-users, although the manufacturer is dependent on the firm using the private brand. Producing private label merchandise for one intermediary is risky since the arrangement can be terminated by the buyer. Nevertheless, a mutually satisfactory private branding arrangement benefits both the producer and middleman. The producer’s sales volume can be expanded rapidly. The retailer can use its private brand to build store loyalty since the private brand is only available in the retailer’s stores. Private brands are often very profitable for retailers. For example, the profit margins of the private brands carried by supermarkets typically run 10 percent to 15 percent higher than other brands. Private brands account for nearly 13 percent of total sales in supermarkets. Consumer preferences for private brands may vary by country. For example, Italians favour national brands.
Corporate branding.This strategy places emphasis on building brand identity using the corporate name. The brand identity spans the firm’s entire product offering. Examples include IBM in computers, AT&T in communications, and the American Airlines in air travel. Corporate branding offers the advantage of using one advertising and sales promotion program to support all of the firm’s products. An established corporate identity also aids the promotion of new products. The shortcomings of corporate branding include a lack of focus on specific products and possible adverse affects on the entire product mix if the corporate name encounters negative publicity. Corporate branding as a primary branding strategy is appropriate when it is not feasible to establish specific brand identity and when the product offering is relatively narrow.
Product-Line Branding.This strategy places a brand name on a line of related products. Examples include Sear’s Kenmore and Craftsman brands. Hartmax, the men’s apparel producer, produces and markets various brands of men’s suits. Product-line branding provides more focus than corporate branding. and is cost effective by promoting an entire line rather than a specific product. This branding strategy is effective when a firm has one or more lines, each representing an interrelated offering of items. London Fog outwear, for example, is marketed as a line of apparel rather than by attempting to establish a brand identity for each item in the line. This branding strategy also has some limitations. a problem experienced by one item in the line may affect the image of the entire line. The positioning strategy must support the entire line, which may require excessive resources, if management wishes to focus on selected items in the line and/or particular customer segments. Thus, a close relationship among the items in the line is desirable.
Specific Product Branding.The strategy of assigning a brand name to a specific product is used by various producers of frequently purchased items, such as Procter&Gamble’s Crest toothpaste, pampers diapers, and Ivory soap. A brand name on a product gives it a unique identification in the marketplace. A successful brand can gain a strong loyalty over time. Products that represent low-involvement purchases benefit from a popular brand name. The major limitation of brand names on individual products is the high expense of building and supporting a brand through advertising and sales promotion. One danger is that the brand name may be so popular that it becomes a generic term for the product type. Companies work aggressively to prevent this and other misuses of popular brand names. Building a new brand name through advertising initially can cost over $50 million, plus the expense of maintaining the brand loyalty.
Combination Branding.Combination branding is used when the benefits of two branding strategies are great enough to overcome possible limitations. The strategy typically includes a corporate and line or item brand combination. The strategy may be used by a private brand retailer to emphasize specific lines. Combination branding may also be effective for a producer of consumer brands when launching a new brand. The corporate identity and reputation enhances the individual brand’s acceptance by consumers.
Приложение 4.
MANAGEMENT