Mohammad Al-Rashid Y.

Ali

CEE108(10487)

Let’s Check!

Activity 1. Choose an engineering firm of your choice. You need to make sure that this firm is with an
existing marketing unit. Draw the organization chart of the firm showing the marketing unit and its
relationship with other units.

Let’s Analyze!

Activity 1. Answer the following questions.

1. How may the marketing concept be explained? Is it applicable to an engineering firm?

The marketing concept can be described as a business philosophy that centers around
understanding and meeting the needs of customers. It applies to an engineering firm by recognizing the
importance of customer satisfaction and value creation. By adopting the marketing concept, an
engineering firm places its clients at the forefront, actively seeking to understand their needs and
preferences. This customer focus drives the development of engineering solutions that effectively address
client challenges and provide value. Additionally, building strong relationships with clients, staying attuned
to market dynamics, and continuously improving products and services help the engineering firm
differentiate itself, attract new clients, and foster loyalty. Embracing the marketing concept enables the
firm to achieve business growth, repeat business, and a positive industry reputation.
2. How may the engineer manager meet the threat of a competitor’s product?

To meet the threat of a competitor's product, an engineer manager can employ several strategies.
Firstly, conducting a comprehensive competitive analysis helps identify the strengths and weaknesses of
the competitor's product. Continuous improvement of your own product is crucial, driven by customer
feedback, market trends, and technological advancements. Emphasizing differentiation by highlighting
unique features, superior quality, or exceptional customer service is essential. Additionally, evaluating and
adjusting pricing strategies, implementing effective marketing, and branding initiatives, and fostering
strong customer relationships contribute to countering the competition. By combining these strategies, an
engineer manager can effectively navigate and address the challenges posed by a competitor's product.

3. Why is price said to be a strong competitive tool?

Price is regarded as a strong competitive tool because it holds significant influence over consumer
behavior and purchasing decisions. When products or services are similar in quality and attributes, price
becomes a crucial factor that drives customer choices. In a competitive market, customers tend to be
price-sensitive, seeking the best value for their money. Companies can leverage price as a powerful tool
to attract customers, gain a competitive edge, and drive sales. By offering lower prices than competitors,
a company can capture market share, entice customers away from rivals, and expand its customer base.
Price reductions or discounts can also be strategically employed to stimulate demand, foster customer
loyalty, and attract price-conscious consumers

4. How may the engineer manager convince the buyer or client to patronize the firm?

The engineer manager can convince the buyer or client to patronize the firm through effective
promotion. By utilizing promotional tools such as advertising, publicity, personal selling, and sales
promotion, the manager can inform, persuade, and influence the buyer's attitudes and behavior.
Advertising allows reaching a large audience through mass media channels like television, radio,
magazines, and newspapers. Publicity, on the other hand, utilizes news or information published by the
media to generate awareness and interest in the product or service. Personal selling involves direct
conversations with potential purchasers to make a sale, allowing for a more personalized and persuasive
approach. Lastly, sales promotion techniques such as displays, contests, coupons, and demonstrations can
further entice and engage customers. By leveraging these promotional strategies effectively, the engineer
manager can effectively communicate the firm's value proposition, generate interest, and convince the
buyer or client to choose and patronize the firm for their needs.

5. In selecting a target market, what must the engineer manager do?

In selecting a target market, the engineer manager must undertake several key steps. Firstly, they
need to divide the total market into groups of individuals or organizations with similar product or service
needs. This segmentation allows for a more focused and targeted approach. Secondly, the manager should
assess the profit potential of each segment to determine which ones align with the company's objectives.
This evaluation involves considering factors such as market size and the number of competitors serving
each segment. Lastly, the manager must decide on the segment or segments that the company will serve
based on profitability and the firm's capabilities. This decision could vary depending on the size of the
company, with a smaller firm potentially focusing on a specific niche, while a larger company might have
the resources to cater to multiple segments or even offer additional services
In a Nutshell

You’ve already known how essential to know about how engineering mangers manage the marketing
function of a company. Also, it tackles the different organizational units of a company. This time, I will
provide you my perspective, and you continue the remaining.

1. Part of the task of any company is to market their products and services that they can

offer to their customer.

2. The responsibility of an engineer manager is to convince customers to patronize their

products and services which is the proper managing of the marketing function.

Your Turn:

3. In order to effectively market their products and services, engineer managers need to conduct market
research and analysis to understand customer needs, preferences, and market trends. This involves
gathering data on customer demographics, behavior, and competitors to inform marketing strategies and
decision-making.

4. Engineer managers must develop a compelling value proposition that differentiates their products and
services from competitors. This includes identifying unique selling points, highlighting benefits, and
communicating the value that customers will receive by choosing their offerings.

5. To reach and engage customers, engineer managers need to develop and implement targeted marketing
campaigns across various channels. This can include digital marketing, traditional advertising, social media,
trade shows, and industry events.

6. Engineer managers should establish strong customer relationships and provide excellent customer
service to enhance customer satisfaction and loyalty. This involves actively listening to customer feedback,
addressing concerns, and continuously improving products and services based on customer needs and
preferences.
Let’s Check!

Activity 1. Now that you know the most essential terms in the study about managing the finance function.
Let us try to check your understanding of these terms. In the space provided, write the term/s being asked
in the following statements:

Team Loans 1. This term loan refers to a “commercial or industrial, loan from a commercial bank,
commonly used for plant and equipment, working capital, or debt repayment.

Common Stocks 2. This refers to the third source of long-term funds consists of the issuance of common
stocks.

Timing 3. This refers to the financial market has its ups and downs. This means that there are times when
certain means financing provide better benefits than at other times.

Flexibility 4. Some fund sources impose certain restrictions on the activities of the borrowers.

Income 5. Refers to the various sources of funds, when availed of, will have their individual effects on the
net income of the engineering firm.

Bonds 6. It is a certificate of indebtedness issued by a corporation to a lender. It is a marketable security

Control 7. This is when new owners are taken in because of the need for additional capital, the current
group of owners may lose control of the firm.

Risk defined 8. This refers to the uncertainty concerning loss or injury.

Risk 9. This refers to the chance that the company will be affected adversely when a particular source of
financing is chosen.

Retained Earnings 10. Retained earnings refer to “corporate earnings not paid out as dividends."
Let’s Analyze!

Activity 1. Answer the questions below.

1. Determination of fund requirements are? Describe each.

1. Financing Daily Operations: To ensure the smooth functioning of the engineering firm on a day-
to-day basis, funds are necessary to cover essential expenses. These expenses include paying wages and
salaries to employees, covering rent for office space, fulfilling tax obligations, and covering utility bills like
power and light. Additionally, funds are required for marketing expenses, such as advertising,
entertainment, travel expenses, as well as for administrative expenses like auditing and legal services.

2. Financing the Firm's Credit Services: Sometimes, it becomes necessary for a firm, including an
engineering firm, to extend credit to customers. In addition, construction firms often need to finance
projects for government clients, which means they may have to bear the construction costs for several
months before receiving payment.

3. Financing the Purchase of Inventory: Adequate inventory management is crucial for many firms,
including engineering firms. These firms need funds to procure and maintain a sufficient level of raw
materials, supplies, and parts in storage. It is essential to have these materials readily available to avoid
disruptions in the production process.

4. Financing the Purchase of Major Assets: In certain situations, an engineering firm may need to
acquire significant assets to support its growth and expansion. When top management decides on
expanding operations, there may arise a need to invest in capital assets like land, plant, and equipment.
These assets require substantial funding to acquire, and the firm must allocate resources to finance their
purchase, enabling it to enhance its capabilities and meet the demands of its growing business.

2. What are the sources of Funds? Explain each.

1. Cash Sales: The firm generates cash inflows through the direct sale of its products or services.
When customers make purchases and pay in cash, it provides an immediate source of funds for the firm.

2. Collection of Accounts Receivables: If the engineering firm extends credit to its customers, it
will have accounts receivable. When customers settle their outstanding balances, the firm receives cash,
which becomes available for use.

3. Loans and Credits: When other financing sources are insufficient, the firm may resort to
borrowing from external sources. Loans and credit facilities provide additional funds that can be used to
meet various financial needs.

4. Sale of Assets: The firm can generate cash by selling its assets, such as equipment, real estate,
or other property. This option allows the firm to convert non-essential or surplus assets into liquid funds.

5. Ownership Contribution: If the firm requires additional funds beyond its available cash, it may
seek financial support from its owners or shareholders. Owners can contribute additional capital to the
company, increasing its financial resources.
 6. Advances from Customers: In certain cases, customers may be required to make cash advances
when placing orders. These advance payments help the firm finance its production activities by providing
immediate funds to cover costs.

In a Nutshell

In this chapter, simple yet proven analysis, procedures, and technologies have been described to improve
matrix or risk management. What are the methods of dealing with risk? Describe each.

Your Answer:

1. Risk Avoidance: This method involves taking actions to completely avoid or eliminate the risk.
Organizations may choose not to engage in activities or situations that pose significant risks. By avoiding
the risk altogether, the potential negative consequences can be mitigated or eliminated.

2. Risk Retention: Risk retention refers to the decision to accept and bear the potential
consequences of a risk. In this method, organizations acknowledge the existence of a risk but choose not
to take any specific action to mitigate it. They rely on their own resources and capabilities to handle any
losses or impacts that may arise from the risk.

3. Risk Reduction: Risk reduction involves implementing measures to minimize the likelihood or
severity of a risk. This method focuses on mitigating the risk rather than completely eliminating it.

4. Loss Reduction: This method aims to minimize the potential losses or damages that may result
from a risk event. It focuses on developing contingency plans, emergency response procedures, or
business continuity strategies.

5. Risk Shifting: Risk shifting involves transferring the financial burden or responsibility of a risk to
another party. This is commonly done through contracts, insurance policies, or outsourcing arrangements.
By shifting the risk, organizations can mitigate their financial exposure and rely on the expertise or
resources of another entity to manage and absorb the potential losses.