Margin Trading or Buying on Margin

Buying on margin means borrowing money from a broker to purchase stock. Margin trading allows one to buy more stock than normal. To trade on margin an account is required. The margin account is a credit based account. In an account one can avail loan to buy stocks. Marginable securities act as collateral for the loan. Securities traded in the margin account are the marginable securities. Like any other loan there is interest charged on the amount borrowed. One should read the margin agreement and understand its implications. One is required to maintain an equity amount that ranges from 50-90%. This is otherwise called as maintenance margin. There are certain costs included in margin trading. They are trade commissions, and interests charged on margin debt. Interest is calculated daily and debited in the margin account say every 15th of the month. Margin trading offers another avenue to the brokers for Continue reading

Takeover Bid – Meaning and Types

This is a technique for affecting either a takeover or an amalgamation. It may be defined as an offer to acquire shares of a company, whose shares are not closely held, addressed to the general body of shareholders with a view to obtaining at least sufficient shares to give the offer or, voting control of the company. Takeover Bid is thus adopted by company for taking over the control and management affairs of listed company by acquiring its controlling interest. While a takeover bid is used for affecting a takeover, it is frequently against the wishes of the management of Offeree Company. It may take the form of an offer to purchase shares for cash or for share for share exchange or a combination of these two firms. Where a takeover bid is used for effecting merger or amalgamation it is generally by consent of management of both companies. It Continue reading

Case Study: Marketing Strategies of IBM

International Business Machines Corporation, better known as IBM, is a multinational IT company involved in the manufacture and retail of computer hardware and software applications, and IT consulting services. The company has established itself as one of the selected information technology companies since 19th century. Adoption of marketing strategies for IBM has been a planned structure since 19th century and by means of these strategies it has earned enough success all over the world. With its growth in the manufacturing as well as marketing domains of computer hardware and software, it has gained the nickname of “Big Blue”. On marketing grounds, IBM follows strict infrastructural services, added by hosting provisions and consulting services in various areas from mainframe computers to the persuasion of nanotechnology. Well – devised and efficient marketing strategies have been the key to IBM’ global success. The company strongly believes that devising effective marketing strategies requires making Continue reading

Narasimham Committee on Banking Sector Reforms (1998)

In spite of the optimistic views about the growth of banking industry in terms of branch expansion, deposit mobilization etc, several distortions such as increasing NPAs and obsolete technology crept into the system, mainly due to the global changes occurring in the world economy. In this context, the finance ministry of Government of India appointed Mr. M. Narasimham as chairman of one more committee, this time it was called as the committee on banking sector reforms. The committee was asked to “review the progress of banking sector reforms to the date and chart a programme on financial sector reforms necessary to strengthen India’s financial system and make it internationally competitive”. The Narasimham committee on banking sector reforms submitted this report to the government in April 1998. This report covers the entire issues relating to capital adequacy, bank mergers, the condition of global sized banks, recasting of banks boards etc. The Continue reading

Marketing Channel Conflicts

Conflict is an inherent behavioral dimension in all social system including the marketing channel. In any social system, when a component perceives the behavior of the other component to be impending the attainment of its goal or the effective performance of its instrumental behavior pattern, an atmosphere of frustration prevails. When this frustration is not resolved by the other component, a stage of conflict may exist. More over if the other component also perceive it as the blockage in its attainment of goal then both the components become objects of each other frustration and the conflict arises. In distribution channel, the same is also applicable. Here the conflict may be sales man versus distributor, distributor versus wholesaler, wholesaler versus retailer and so on. Some time in bigger organizations the conflict may arise between product company versus supply company, sales department versus production department. This type of channel conflict are more Continue reading

Sales Promotion – Definition, Purpose, Objectives and Types

Sales promotion is one of the most loosely used terms in the marketing vocabulary. We define sales promotion as demand stimulating devices designed to supplement advertising and facilitate personal selling. In other words, sales promotion signifies all those activities that supplement, co-ordinate and make the efforts of personal selling and advertising more effective. It is non recurrent in nature which means it cant be used continuously. Concept of Sales Promotion Sales promotion consists of diverse collection of incentive tools, mostly short-term designed to stimulate quicker and / or greater purchase of a particular product by consumers or the trade. Where as advertising offers a reason to buy, sales promotion offers an incentive to buy. Sales promotion includes tools for consumer promotion (for example samples, coupons, prizes, cash refund, warranties, demonstrations, contest); trade promotion (for example buying allowances, free goods, merchandise allowances, co-operative advertising, advertising and display allowances, dealer sales contests); Continue reading