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Arts Management
Final Exam
100
Management
Undergraduate 1
04/29/2010

Additional Management Flashcards


 

 


 

Cards

Term
Economics and the Arts
Definition
-Direct correlation
-Effects are clear & especially obvious in an economic downturn
-Changes in: Disposable income levels, Inflation rates, Interest rates, Investment opportunities, Employment levels, Tax rates and areas
Term
Baumol & Bowen study
Definition
After correcting for inflation, population increases and income growth, found little actual growth since 1929
Term
Heilbrun & Gray
Definition
Measured DPI spending on arts -found it rose in ‘80s due to price increases
Term
NEA audience demographic study
Definition
Audience for "high culture" has remained a relatively small segment of the population –white collar, high education, higher income
Term
B&B predicted financial difficulties for arts groups will worsen over time because of “the productivity issue”
Definition
-To stay ahead of inflation, which is a constant increase in price levels, businesses have to increase productivity
-Technology -increases productivity in most sectors
-Limits to productivity increases in the arts lead to an ever-increasing “Income Gap”
Term
Income Gap
Definition
Arts productivity will decline over time as other segments of the economy become more productive
Term
Economy
Definition
production, distribution, and consumption of all things people use to achieve a certain standard of living
Term
Economics
Definition
study of how people use the scarce resources they possess
Term
Market
Definition
designated interaction of buyers and sellers
Term
Fixed Costs
Definition
Costs that do not change
Term
Variable Costs
Definition
Costs related to programming that change depending on plans
Term
Total Costs
Definition
TFC + TVC
Term
Marginal Costs
Definition
the cost of the additional inputs needed to produce that output
Term
Arts managers (for profit & nonprofit) need skills...
Definition
controlling costs, setting prices & estimating demand
Term
Average costs
Definition
TC/Output
Term
Law of Supply & Demand
Definition
Prices for goods (tangible things –a painting) & services (intangibles –a concert) are directly related to demand& supply
Term
Law of demand
Definition
-describes relationship between the amount of a good/service buyer desires vs. the price charged
-As prices go up, demand goes down and as prices go down, demand goes up (when price is the only factor)
Term
factors that can affect demand
Definition
Price/availability of similar, substitute goods; Complementary goods; Shifts in income; Expectations about price shifts; Personal Tastes
Term
Law of Supply
Definition
-Suppliers will supply larger quantities of a good at higherprices than at lower prices.
-It benefits supplier to supply more tickets at a higher price to generate the most revenuebecause the cost of producing the event is constant.
Term
Factors/Determinants affecting supply side
Definition
Rise or fall in price of resources used in creating goods/services; Number of suppliers; Limited supply product -a “star”
Term
Market Equilibrium
Definition
The point where the supply curve and the demand curve intersect –represents the price where the quantity of the good/service buyers demand and purchase is equal to the quantity suppliers supply and sell.
Term
Arts Managers can use this information to help determine pricing & maximize revenue: Scaling Ticket prices with multiple levels
Definition
Market Equilibrium
Term
Economic Impact of the Arts
Definition
Directly: Through the creation of jobs, which pay salaries & the use of goods/services in the community; The Multiplier Effect:stimulating the economy as the dollars expended ripple through the economy

Indirectly: Attracting business and individuals to locations with a strong cultural presence; Creative class
Term
The Multiplier Effect in Action
Definition
When someone goes to a concert they may: Spend money on a babysitter; Get gas; Go out to dinner, Purchase additional item –CD, t-shirt, poster; Pay for parking
Term
Arts Attendees Spend $____ extra Per Person Per Event
Definition
$22.87
Term
Cultural Tourism:from Travel Assoc. of America (TIA) surveys:
Definition
-Two-thirds of American adult travelers included a cultural, arts, heritage or historic activity in their travels
-This is 4% higher than in 1998 (cultural tourism growing)
-Adds time to trips which translates into more $
Term
ood advocacy argument for the impact the arts have economically for communities –it is a _____ impact that can be _____ in numbers.
Definition
tangible; measured
Term
Spoleto Festival & Piccolo Festival
Definition
-Over 150,000 visitors in 2000
-Spent $43.1 million
-38% of attendees live outside of S.C.
-53% live outside of Charleston
-72.4% of spending associated with the festivals comes from those living outside of Charleston
-2002 --Economic impact of $46.4 million
Term
SCAC Study says on average in 2000 and 2001:
Definition
-The arts in SC supported $700 million in wages and salaries
–Supported 30,000 jobs
–Resulted in 1.9 billion in economic output
–Of every $100 of wages and salaries earned in SC, $1.30 are linked to the cultural industry
–Of every 100 jobs, 1.6 are linked to the arts
Term
Economic Development
Definition
A strong cultural industry can provide an edge in attracting new businesses; A diverse cultural industry can attract retirees with disposable income; The cultural industry adds to the general “quality of life” which makes a place more desirable (CC)
Term
New Study by RAND
Definition
Raises questions about effectiveness of Economic Impact Studies: Economic impact hard to measure, leads to overstatement; Questioning the multiplier itself; Don’t consider opportunity costs, substitute goods
Term
President & CEO of Americans for the Arts
Definition
Robert Lynch
Term
Why is Financial Management Important to Nonprofits?
Definition
-Efficiency & effectiveness
-Mission
-Donations
-Stewardship
Term
Types of Accounting used by Nonprofits
Definition
-Cash-Based Accounting
-Accrual-Based Accounting
Term
Cash-Based Accounting
Definition
Transactions are reported when cash is paid or received
Term
Accrual-Based Accounting
Definition
the most commonly used accounting method, which reports income when earned and expenses when incurred.
Term
Accounts Payable
Definition
a debtor's accounts of money he owes; normally arise from the purchase of products or services
Term
Accounts Receivable
Definition
a creditor's accounts of money owed to him; normally arise from the sale of products or services
Term
The two primary financial statements are:
Definition
-The statement of position (balance sheet)
-The statement of activities (income statement)
Term
Accounting Formula
Definition
Net Assets equal Assets minus Liabilities NE = A –L

other way to state it:
-Assets equal Liabilities plus Net Assets
A = L + NE
Term
Net assets are also called
Definition
fund balances
Term
Statement of Position
Definition
Balance Sheet
Term
Statement of Position (Balance Sheet)
Definition
-Snapshot of an organization’s financial position at a particular point in time

Key sections: Total assets, Total liabilities, Total net assets
Term
Total net assets are divided into:
Definition
unrestricted, temporarily restricted, and permanently restricted
Term
Liabilities:
Definition
money owed or funds committed;
reduces overall worth
Term
Assets:
Definition
property or resources ownedby the organization; increases overall worth
Term
Net Assets (equity in for-profits):
Definition
what’s left over -may be classified as permanently restricted, temporarily restricted or unrestricted
Term
Unrestricted Net Assets
Definition
No donor-imposed restrictions; May be designated by board
Term
Temporarily Restricted Net Assets
Definition
Purpose or time restrictions placed on the contribution by the donor
Term
Permanently Restricted Assets
Definition
Funds must be maintained permanently
Term
Permanently Restricted Assets
Definition
Funds must be maintained permanently
Term
Statement of Activities(Income Statement)
Definition
Summary of revenues received and expenses incurred; Is prepared monthly and at the end of the year; On a monthly basis it allows for a comparison of financial performance to date with budget projections.
Term
Income Statement -Monthly
Definition
Shows actuals for current month vs. budget and year to date projections
Term
Investment
Definition
Financial Manager works w/Board to develop effective investment strategies specific to the organization
Term
CDs, Treasury Bills
Definition
short-term interest earning accounts
Term
stocks and bonds
Definition
longer-term investment approaches
Term
Earned Income
Definition
-income derived directly from goods and services: Ticket sales; Concessions; Merchandise
Term
Unearned Income
Definition
-income contributed to an organization, charitable contributions: Grants; Donations; Gifts
Term
Marketing
Definition
The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives
Term
Need:
Definition
something lacking that is necessary for a person’s physical, psychological or social well-being

-Food, shelter, clothing
Term
Want:
Definition
something that is lacking that is desirable or useful

-Intrinsic to individual’s personality, experience & culture
Term
Functional Satisfaction
Definition
related to tangible features of the product
Term
PsychologicalSatisfaction
Definition
intangibles; often related to self-image
Term
The goal of marketers is to gain a competitive edge by providing greater
Definition
satisfaction
Term
Marketing mix
Definition
combination involving product, price, place and promotion to provide satisfaction to consumers
Term
Product:
Definition
artistic and/or service product of organization
Term
Price:
Definition
monetary value; cost
Term
Place:
Definition
distribution and its channels, and commercial venue of the product
Term
Promotion:
Definition
advertising, public relations, publicity
Term
Vehicles for promotion
Definition
newspapers, magazines, radio, TV, direct mail, email, website, phone, fliers, word-of-mouth, billboards, speaking to community groups, hot air balloons, dancing pizza slice
Term
Evolution of Modern Marketing:3 Eras
Definition
1)Fulfilling Basic Needs
2)Rise of the Salesperson
3)Modern Marketing
Term
Current Era of Modern Marketing
Definition
Consumer-driven; research and testing of products & consumer (using technology); application of psychological theories; developing a long-term relationship with the consumer
Term
Revolution of Modern Marketing
Definition
Computers store & quickly sort large amounts of information -revolutionized marketing; Tracking point-of-purchase sales w/bar codes -immediate info about what sold; From this info adjust product, price, promotion, placement based on what works
Term
Product Orientation
Definition
consumers will favor the product that offers the most quality, features
Term
Sales Orientation
Definition
consumers must be coaxed into buying; do not change product
Term
Customer Orientation
Definition
systematically studying customers needs and wants, perceptions and attitudes, preferences and satisfactions to maximize exchanges with targeted audience
Term
American Idol
Definition
the ultimate marriage of programming & marketing
Term
Marketing segment
Definition
a group of buyers who have similar wants and needs
Term
After identifying marketing segments:
Definition
you can do target marketing
Term
Target marketing
Definition
developing a mix of the four Ps aimed at a particular segment
Term
-To do this you need detailed info about potential arts consumer
-Demographic (age, income, gender, education, race)
-Psychographic (beliefs, values, attitudes, activities)
Definition
Target marketing
Term
Effective target marketing requires
Definition
detailed consumer information
Term
The Nine American Lifestyles
Definition
Mitchell’s “The Nine American Lifestyles,” 1983
Term
VALS
Definition
Values & Lifestyles Segment
Term
APAP
Definition
hired Mitchell to look at performing arts audiences
Term
Claritas Corporation
Definition
created system using a mix of census data to create info/mailing lists (clusters)
Term
Potential Rating Index for Zip Markets (PRIZM):
Definition
zip code analysis of neighborhood types
Term
Claritas found 2 clusters for classical music
Definition
Blue Blood Estates -median incomes $113,000; Executive Suites -$58,000, espresso makers, dry cleaning, Cooking Light magazine
Term
ways to research your community /audience
Definition
Surveys, focus groups, interviews; Tracking & analyzing info from ticketing /attendance records /promo efforts; Info from other arts organizations
Term
Marketing Planning Process
Definition
.
Begin with organizational profile
.
Do environmental analysis
.
Look at challenges and opportunities
.
Develop goals & objectives; quantifiable
.
Develop specific strategies
.
Outline your process
.
Include controls and evaluation
Term
Why do people give?
Definition

For the greater good

Belief in mission

Guilt

Social status

Because someone asked
Term
Why do organizations need to fund-raise?
Definition
Average Earned to Unearned Income split for arts and cultural orgs: 54%-46%
Term
Sources of Funding
Definition
.
Individuals
.
Businesses/Corporations
.
Foundations
.
Government
.
Federal
.
State
.
Local
Term
______ make up the largestper share of annual giving
Definition
Individual donors:
.
1997 –76%
.
2003 –74%
.
2008 –75%
Term
Individual donors:
Definition
giving regular, unrestrictedfunds
Term
often have restrictions
Definition
Money from corporations, foundations and government
Term
Corporate Giving is based on:
Definition
reciprocity
Term
Definition of Foundation:
Definition
Nonprofit, non-governmental organization with a principle fund or endowment of its own that maintains or aids charitable, educational, religious or other activities serving the public good, primarily by making grants to other organizations.
Term
Effective fundraising
Definition
.
People give to People
.
Make it personal
.
Planning and Research
.
Data management
Term
Make campaigns donor-driven bc...
Definition
Give to us because we put together great exhibitions vs. Your giftwill help a child experience the wonder of art
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