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1.     Engel's law  is an observation in economics stating that as income rises, the proportion of income spent on food falls, even if actual expenditure on food rises. In other words, the income elasticity of demand of food is between 0 and 1. The  law  was named after the statistician Ernst Engel (1821–1896). What is Engel’s Law? Engel’s Law is named after the statistician Ernst Engel, who was the first to investigate the relationship between income and spending on food in 1857. The law states that as income rises, the proportion of income that is spent on food decreases. This proportion, also called the Engel’s Coefficient, means that consumers increase their spending on food by a smaller amount than the increase in income. For example, a household which sees their income double is unlikely to double their spending on food. What is its application? The law implies that poor households spend a greater pr...

What motivates behavior? According to humanist psychologist Abraham Maslow, our actions are motivated in order achieve certain needs. Maslow first introduced his concept of a hierarchy of needs in his 1943 paper "A Theory of Human Motivation" and his subsequent book Motivation and Personality. This hierarchy suggests that people are motivated to fulfill basic needs before moving on to other, more advanced needs. While some of the existing schools of thought at the time (such as psychoanalysis and behaviorism) tended to focus on problematic behaviors, Maslow was much more interested in learning more about what makes people happy and the things that they do to achieve that aim. As a humanist, Maslow believed that people have an inborn desire to be self-actualized, to be all they can be. In order to achieve this ultimate goals, however, a number of more basic needs must be met first such as the need for food, safety, love, and self-esteem. ...

A  PEST analysis  is a business measurement tool.  PEST  is an acronym for Political, Economic, Social and Technological factors, which are used to assess the market for a business or organizational unit. Though structure and leadership play a large role in business success, external factors can also shape your company's potential. One method for systematically discovering and quantifying those factors is the PEST analysis. PEST is an acronym for political, economic, social, and technological – external factors that commonly affect business activities and performance. Created by Harvard professor Francis Aguilar in 1967, PEST can work alone or be used in combination with other tools, such as Porter's Five Forces and SWOT analysis, to determine an organization's overall outlook. Jim Makos, founder of the Pestle Analysis website, says PEST can help companies improve their decision making and timing. "The best outcome of the PEST analysis would be if your co...

A  SWOT analysis  (alternatively  SWOT  matrix) is a structured planning method used to evaluate the strengths, weaknesses, opportunities and threats involved in a project or in a business venture. WHAT IS A SWOT ANALYSIS AND WHY SHOULD YOU USE ONE? WHEN DO YOU USE SWOT? WHAT ARE THE ELEMENTS OF A SWOT ANALYSIS? HOW DO YOU CREATE A SWOT ANALYSIS? HOW DO YOU USE YOUR SWOT ANALYSIS? Change is an inevitable part of community organizing. If you know how to take stock of the strengths, weaknesses, opportunities, and threats, you are more likely to plan and act effectively. SWOT provides a tool to explore both internal and external factors that may influence your work. WHAT IS A SWOT ANALYSIS AND WHY SHOULD YOU USE ONE? SWOT stands for:  S trength,  W eakness,  O pportunity, T hreat. A SWOT analysis guides you to identify your organization’s strengths and weaknesses (S-W), as well as broader opportunities a...

The marketing mix is a business tool used in marketing and by marketers. The marketing mix is often crucial when determining a product or brand's offer, and is often associated with the four P's: price, product, promotion, and place. The marketing mix and the 4Ps of marketing are often used as synonyms for each other. In fact, they are not necessarily the same thing. "Marketing mix" is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. The 4Ps is one way – probably the best-known way – of defining the marketing mix, and was first expressed in 1960 by E J McCarthy. The 4Ps are: Product (or Service). Place. Price. Promotion. A good way to understand the 4Ps is by the questions that you need to ask to define your marketing mix. Here are some questions that will help you understand and define each of the four elements: Product/Serv...

Companies can classify customers into 4 groups according to their potential profitability and manage their relationships with them accordingly: strangers, butterflies, barnacles and true friends. Each group requires a different relationship management strategy. "Strangers"   show low potential profitability and little projected loyalty.  There is little fit between the company's offerings and their needs.  The relationship management for these customers is simple: Do not invest anything in them. Butterflies:  Are potentially profitable but not loyal. There is a good fit between the company's offerings and their needs. However, like real butterflies, we can enjoy them for only a short while and then they are gone. An example is stock market investors who trade shares often and in large amounts but who enjoy hunting out the best deals without building a regular relationship with any single brokerage company. The strategy to deal with butterflies is to ...