theme 1 (in paper 1 & 3) Flashcards
marketing and people (103 cards)
1
Q
what is a mass market?
A
the market for goods that are produced in large quantities.
2
Q
what is a niche market?
A
a small, specialized market for a particular product or service.
3
Q
what are the key characteristics of a mass market?
A
- Customers form the majority in the market.
- Customer needs and wants are more “general” & less “specific”.
- Associated with higher production output and capacity (economies of scale)
- Success usually associated with low-cost operation, heavy promotion, widespread distribution or market leading brands.
4
Q
what are the key characteristics of a niche market?
A
- Less competition – the firm is a “big fish in a small pond”.
- Clear focus - target particular customers (often easier to find and reach too).
- Builds up specialist skill and knowledge = market expertise.
- Can often charge a higher price – customers are prepared to pay for expertise.
- Profit margins often higher.
- Customers tend to be more loyal.
5
Q
how can you calculate market size?
A
Market size measures the total sales generated by selling a product on a market. It is measured by dividing sales by market share. This value is then multiplied by 100.
6
Q
how can you calculate market share?
A
Market share refers to the proportion of a market that a business controls in order to satisfy customer needs.
Market share can be calculated by sales of one product divided by total market sales of that product multiplied by 100.
7
Q
what is a dynamic market?
A
A dynamic market is one that is in a rapidly changing business environment.
8
Q
what factors do u need to consider when looking at a dynamic market?
A
Online retailing
How markets change
Innovation and market growth
Adapting to change
9
Q
what are the advantages of online retailing?
A
Provides business access to more consumers, including internationally
Enables longer trading hours as the business is open 24/7
Cheaper to run as it lowers fixed and variable costs compared to bricks and mortar retailers
Businesses can collect data by tracking consumer behaviour which helps with primary market research
Consumers can receive offers that they are more likely to benefit from
Consumers can shop at a time that suits them
10
Q
what are the disadvantages of online retailing?
A
There may be high costs for website development, maintenance, and promotion
Online retailing is dominated by larger businesses that are more well-known
High levels of competition mean that it will be expensive to make a website stand out
There is a lack of personal contact with customers
Consumers may find it difficult to get the desired level of customer service
Consumers may find it difficult to return unwanted products
Online purchasing opens consumers up to credit card fraud
11
Q
what leads to changes in the market?
A
Changing consumer tastes and preferences e.g. consumers desiring electric vehicles in place of traditional petrol/diesel.
Changing demographics e.g many developed countries have an increasingly older population who have different wants and needs to previous markets.
The amount of competition e.g. international trade means larger market sizes but also more competition between an increasing number of firms.
Competition can be direct i.e. the sale of similar products or indirect e.g. airlines compete with each other but also with other forms of transport such as trains.
Changing legislation e.g. laws around environmental standards create new markets.
12
Q
what is product innovation?
A
Product innovation involves the adaptation or improvement of existing products e.g. improved video cameras on laptops.
13
Q
what is market growth?
A
Market growth is the measurement of the change in the entire market, expressed as a percentage of the original size.
The businesses market share does not necessarily increase automatically as the entire market continues to grow.
14
Q
what causes a market to grow?
A
Increasing population sizes can increase demand in certain markets.
Increasing incomes can increase demand in certain markets.
Changing tastes and preferences can cause the market to grow e.g. the growth in the electric car market.
15
Q
how can business adapt to change?
A
Create flexible business structures, especially in terms of operations and people management.
Meet customer needs, by carrying out market research and communicating with customers.
Invest in staff training, new products and processes.
Innovate so as to gain the first mover advantage.
16
Q
how does competition affect the market?
A
Competition can be direct or indirect:
Direct competition occurs when the business is targeting customers with the same product as a competitor.
Indirect competition occurs when firms sell different products but compete with each other for the customers disposable income e.g. cinema and theatre companies are in indirect competition.
Competition results in many benefits for the customer, such as:
- Businesses offer lower prices.
- Businesses produce better quality products.
- Businesses provide better customer service.
However, the absence of competition reduces incentives for businesses to innovate, be efficient or offer consumers lower prices.
17
Q
what is the difference between uncertainty and risk?
A
Risk is the potential threat to business success.
Risks can be from inside the business (internal) or from outside the business (external).
Risks can be measured and prepared for using risk management.
Uncertainty is when outcomes are difficult to predict.
18
Q
what is product orientation?
A
A product orientation is an approach to marketing that focuses on the characteristics of the product rather than the needs of the consumer.
The emphasis will be on creating a product first and then finding a market.
The business has a belief that the product is superior i.e. it will sell itself.
One problem with being too product orientated is that over time your business may move further.
19
Q
what is market orientation?
A
Market orientation is an approach to marketing that focuses on the needs of consumers and uses this information to design products that meet customer needs.
- Consumers are at the center of marketing decisions.
- Products will be developed which respond to consumer needs.
The result of market orientation is that the firm will benefit from increased demand, increased profits, and a valued brand image as its products become more desirable .
20
Q
what are the benefits of market research?
A
- reduces the risk when launching new products or entering new markets.
- Anticipates future needs and wants of consumers.
- helps understand consumer behaviour.
- identifies potential consumer demand.
- identifies how much consumers are prepared to pay.
- identifies competitors and gauge their potential strengths and weaknesses.
21
Q
how does ICT help support market research?
A
Company websites
Websites allow businesses to collect primary data more cheaply e.g. tracking consumer searches and analyzing customer reviews as well as collecting secondary data about rivals e.g. prices and special offers. Pop-ups
Databases
These can be used to store large amounts of customer information. Databases are also effective in collating customer e-mail addresses so that targeted customers can be surveyed later via e-mail.
Social networking
Focuses on gathering information about consumers via online social channels such as Twitter and Facebook.
22
Q
what is market segmentation?
A
Market segmentation is the process in which a single market is divided into sub markets or ‘segments’.
Each segment represents a slightly different set of consumer characteristics.
23
Q
what are the advantages of market segmentation?
A
- May increase loyalty if the consumer feels that their needs are being met which can lead to repeat purchases.
- Less expensive and wasteful than marketing products at wide market segments.
- Products and marketing activities can be altered to meet different needs of different groups of consumers and targeted more precisely.
- Recognizes that consumers are not all identical - consumer groups do not all share the same tastes and preferences.
24
Q
what are the disadvantages of market segmentation?
A
- Not everyone within a segment will behave in the same way.
- May be difficult to identify a segment and consumers can belong to multiple segments at the same time.
- Segmentation requires more detailed market research which can prove costly (but beneficial) to the business.
- A segment may be identified but it may be too small and unprofitable to cater for.
25
what is market positioning?
Market positioning refers to the process a business goes through when launching a new product or service.
The business decides where they want to position the product in the market with regard to price, quality, branding, and customer perception.
26
what is market mapping?
Market mapping is a tool for identifying the position of a product within a market.
A market map refers to a two-dimensional diagram that shows the attributes or characteristics of a product in comparison to rivals’ products.
Only two criteria can be chosen e.g. price and quality, age and income, etc.
27
what are the benefits of market mapping?
- Market gaps can be identified which may enable a business to come up with ideas for new products.
- Comparisons can be made between a business’ products and those of its rivals.
- Market maps are simple to construct and offer a visual illustration of the position of a product in the market.
28
what are the limitations to market mapping?
- A gap in the market may exist because it is not profitable to fill.
- Mapping a market may require primary research which can be expensive.
-Only two criteria can be chosen which may prove too simplistic.
-Markets are often dynamic and a market map only provides insight at a specific point in time.
29
what may give business competitive advantage?
- Quality
- Delivery times
- Low Price
- Reliability
-Ethical stance
-Design
30
what is the purpose of product differentiation?
- Product differentiation is an attempt by a business to distinguish its products from those of competitors.
- Successful product differentiation helps the business to increase demand for its products, increase brand loyalty, and allow the business to charge higher prices.
31
how can business add value to products/services?
Marketing and branding
Building brand identification and customer loyalty to the brand allows the firm to charge a higher price for its products.
Functions and features
Adding unique features allows the firm to charge a higher price for its products thus increasing the added value.
Customer service
Businesses that ensure they have a good reputation for customer service can charge a higher price.
Customization
Allowing customers to design or create their products allows the firm to charge a higher price.
Packaging
32
what factors affect demand?
- Change in the price of substitutes.
- Change in the price of complementary goods.
- Change in consumer incomes,
- Fashions, tastes & preferences.
- Advertising & branding.
- Demographics (population)
- Seasonality
- External shocks (unforseen events like covid)
33
what is demand?
- the amount of a good that consumers are willing and able to buy at a given price.
34
what is a complimentary good?
- a good bought alongside an item
- has a negative correlation
35
what is a subsitute good?
- change in price will cause consumers to switch to an alternative.
- an alternative good.
36
define supply.
- is the number of goods/services businesses are willing to sell at a given price in a specific time period
- As the price increases, the quantity supplied increases
- As the price decreases, the quantity supplied decreases
- At higher prices, businesses are incentivised to supply more of the product, hence the supply curve slopes upwards from left to right.
37
what factors affect supply?
- Price
- Indirect taxes
- New firms
- Technology
- Subsidies
- Weather
- Cost of production
38
whats PED?
- how responsive the change in quantity demanded will be to a change in price.
- always a negative value
% change in quantity demanded
_..................................................................
% change in price
39
what does it mean if PED is more than 1?
- elastic
- demand is more responsive to changes in the price.
40
what does it mean if the PED is between 0 & 1?
- inelastic
- demand is less responsive to changes in price
41
what factors effect PED?
- number of subsitute goods
- nature of the good i.e. luxury
- time
- addictiveness
- brand loyalty
42
whats the importance of PED?
- can adjust their pricing strategy to maximise their revenue.
- If inelastic (PED < -1), raising the price will lead to an increase in total revenue.
- Price skimming strategies are best employed for products that are price inelastic in demand
If elastic (PED > -1), lowering the price will lead to a rise in total revenue.
- Competitive pricing strategies are best employed for products that are price inelastic in demand
43
whats YED?
- how responsive the change in quantity demanded is to a change in income.
- % change in quantity demanded divided by % change income.
44
what does it mean if the YED is more than 1?
- luxury good
- Demand is responsive to a change in income
45
what does it mean if YED is between 0 and 1?
- normal good
- Demand is not very responsive to a change in income
46
what does it mean when YED is less than 0?
- inferior good
- Demand rises when income falls (negative income elasticity)
Demand falls when income rises
47
what factors affect YED?
- reccessions, economic growth
- minimum wage legislation
- taxation
- increased international trade
- nature of good i.e. inferior
48
whats the importance of calculating YED?
- production planning
can accurately predict changes in income, then it can plan whether to increase or decrease production
- product planning
E.g. Tesco has its Finest, Standard, and Value range to appeal to all income segments of the market.
49
whats the design mix?
- refers to the combination of elements that make up a product's design, these elements include function, aesthetics, and cost.
- Balancing the elements of function, aesthetics, and cost, helps the product design to be both functional and attractive, while also being cost-effective for both the manufacturer and the consumer
50
what are social trends?
- refer to changes in attitudes, behaviours and lifestyles of people, changes to any of these require companies to adapt their products to remain relevant to their customers
- Social trends can significantly impact the product design mix, especially about concerns over resource depletion and ethical sourcing
51
what are the types of promotional methods?
- advertising
- direct marketing
- sales promotion
- sponsorship
- PR
- digital communications
52
what is branding?
- the process of creating a unique and identifiable name, design, symbol, or other feature that differentiates a product or company from its competitors
53
why is branding important?
- Branding establishes recognition and identity
- Branding builds trust and credibility
- Branding differentiates a business from its competitors
- Branding creates an emotional connection with customers which helps to generate repeat purchases
- Branding supports marketing and advertising efforts
54
what are the different types of branding?
- product branding
- coperate branding
- own brand product branding
55
whats the advantages of corporate branding?
- Creates strong brand recognition and reputation for the company, which can increase customer loyalty and trust
- Allows the company to leverage its existing reputation and customer base to introduce new products more easily
- It helps build economies of scale by promoting multiple products under one brand, which can reduce marketing costs and increase profitability
56
whats the disadvantages of corporate branding?
- If a company's reputation is damaged by a product, it can have a negative impact on all the products offered under that brand
- If the company faces intense competition in one market (e.g. smartphones), it may affect the sales of all the products offered across other markets
57
whats the advantages of product branding?
- Creates a distinct identity for the product, which can help to differentiate it from competitors and increase brand loyalty
- Allows the company to market different products to different segments of the market, e.g. Coco Cola and Coke Zero
- Can help to build customer loyalty and trust by associating the product with a specific quality and benefits, e.g. Dyson Vacuum Cleaners
58
whats the disadvantages of product branding?
- The cost of creating and promoting a new brand for each product can be expensive
- Introducing new products under different brands is difficult as the business must build a new brand for each product from scratch
- Different products within the brand may have different levels of quality, which can affect customer satisfaction
59
whats the advantages of own brand product ?
- It can help retailers differentiate themselves from their competitors by offering unique products
- It allows retailers to offer products at a lower cost than branded products, which can help to increase sales and profitability
- It can help to build customer loyalty by offering exclusive products that are not available elsewhere
60
whats the disadvantage of own brand product?
- Own brand products may have a lower perceived quality than branded products which can affect customer loyalty and trust
61
what are ways to build a brand?
- By developing unique selling points (USPs)
- Through advertising
- Through sponsorship
- Through the use of social media
62
what is cost-plus pricing?
- The business calculates the cost of production and then adds a markup to determine the final price
- The markup covers the cost of production plus the business's desired profit margin
63
what is price skimming?
- The business sets a high price for a new product/service when it is first introduced to the market
- This is effective when an established brand is introducing a new product and there is a high demand for itr
- The high price helps the business recover its development and marketing costs quickly
-The business will then gradually lower the price to ensure sales continue
64
what is price penetration?
- The business sets a low price for a new product/service when it is first introduced
- This is effective when a business wants to quickly capture market share and attract price-sensitive customers
- Once they have enough customers, the business will start to raise the price
65
what is predatory pricing?
- The business sets prices so low that it drives its competitors out of the market
- This strategy is illegal in many countries as it is considered anti-competitive and harms customers by reducing choice in the market
66
what is competitive pricing?
- The business sets its prices based on its competitors' prices
- This is effective when a business is in a highly competitive market and wants to maintain its market share
- The business must continually monitor its competitors' prices and adjust its prices accordingly to remain competitive
67
what is psychological pricing?
- This pricing strategy takes into account the customer's emotions, beliefs, and attitudes towards the product/service
- E.g. a business may set its prices at £9.99 instead of £10 as customers perceive the former as a better value
68
what factors should business take into account when choosing a pricing strategy?
- amount of differientiation
- nature of product
- PED
- level of competition
- strength of the brand
- cost of production
- stage in the product life cycle
69
describe a 4 stage distrubution channel.
- A traditional channel consists of four stages: producer, wholesaler, retailer, and consumer
- This channel is commonly used for products such as groceries, clothing, and electronics
70
describe a 3 stage distrubution channel.
- The three stage distribution channel eliminates the wholesaler stage, with the producer selling directly to the retailer
- This channel is often used for products with high demand or where the cost of distribution is high
- This channel is often used for products with high profit margins, where the manufacturer can afford to sell directly to the retailer and still make a profit
71
describe a 2 stage distrubution channel.
- The two stage distribution channel eliminates both the wholesaler and retailer stages, with the manufacturer selling directly to the end consumer
- This channel is commonly used for products that are sold online or through direct sales channels
72
what changes have been made in distribution to match social trends?
- Online distribution has become increasingly popular due to the convenience and accessibility it offers to consumers
Many businesses now use drop-shipping, which allows them to sell products without holding stock
Once the business has sold the products, they are shipped directly from the producer to the customer
This reduces the cost and complexity of distribution, making it easier for businesses to sell online
- product based businesses to service based businesses
the delivery of services is often quite different from the delivery of physical products
Distribution for service-based businesses may involve delivering services to customers directly, such as through a mobile app or website
This requires a different set of distribution capabilities than traditional product-based distribution
73
what are the 5 stages of a product life cycle?
- development, introduction, growth, maturity, and decline
74
what happens in the development stage?
- The focus is on designing and developing the product
- The business usually incurs high costs for research and development, market research, and product testing
- Cash flow is usually negative during this stage, as the company is investing heavily in the product without generating any revenue
- The marketing strategy during this stage is focused on creating awareness and generating interest in the product
75
what happens in the introduction stage?
- The stage begins when the product is launched
- Characterised by slow sales growth as the product is still new and unknown to most consumers
- Cash flow is usually negative as the business usually incurs high costs for promotion, advertising and distribution
- Marketing efforts are focused on creating awareness and generating interest in the product
76
what happens in the growth stage?
- The product enters this stage when sales begin to increase rapidly
- The business focus shifts to building market share and increasing production to meet the growing demand
- Cash flow usually turns positive during this stage as sales revenue increases and costs are spread out over a larger volume of production
- The marketing strategy is to differentiate the product from its competitors and build brand loyalty
77
what happens in the maturity stage?
- Characterised by slowing sales growth as the product reaches its peak in terms of market penetration
- Cash flow is usually positive during this stage as sales revenue continues to come in and costs are reduced through economies of scale and efficient production processes
- The marketing strategy aims to maintain market share and increase profitability by cutting costs and finding new markets
78
what happens in the decline stage?
- Starts when sales begin to decline as the product becomes obsolete or is replaced by newer products
- The business focus shifts to managing the product's decline and reducing costs
- Cash flow usually turns negative as sales revenue declines and costs associated with the product's decline increase
- The marketing strategy may involve discontinuing the product, reducing its price to clear inventory, or finding new uses for the product
79
what are extension strategies?
- Extension strategies refer to the techniques used by businesses to extend the life of a product beyond its natural life cycle
- These strategies are designed to boost sales and maintain profitability for a product that has reached the decline stage of its life cycle
- There are two types of extension strategies:
Product-related extension strategies
Promotion-related extension strategies
80
what are examples of extension strategies related to the product?
Involves changing or modifying the product to make it more appealing to customers and extend its life cycle and can be achieved in one of three ways:
- Product improvements
- Line extensions e.g. Coca-Cola introduced Diet Coke and Coke Zero as line extensions of its original Coca-Cola
- Repositioning e.g. when IBM's personal computer division started losing market share to other brands, it repositioned its products as high-end business machines and focused on the enterprise market
81
what are examples of promotion related extension strategies?
Involves changing the marketing and promotion of the product to extend its life cycle and could include one or more of the following changes:
- Changes to advertising
- Price promotions
- Sales promotions e.g. loyalty programmes
82
what is the boston matrix?
- The Boston Matrix is a tool used by businesses to analyse their product portfolio and make strategic decisions about each product
- The matrix classifies products into four categories based on their market share and the market growth rate
Cash Cow
Problem Child/Question Mark
Star
Dog
83
what is a cash cow?
- Cash cows are products with a high market and low market growth
- They generate significant positive cash flow but have low growth potential
- The business invests minimal resources in cash cows as they are seen as stable sources of income
- Marketing efforts focus on maintaining their market share and profitability
- Cash cows are valuable assets and can be used to fund the development of new products
84
what is a question mark/problem child?
- Problem child or question mark products have a low market share in a high-growth market
- These products have the potential to become stars if the company invests in their development
- There is often a negative cash flow as businesses usually invest in problem child products to increase their market share and turn them into stars
- If the investment does not result in growing the business may discontinue the product
- Marketing efforts focus on increasing their market share and brand recognition
85
what is a star?
- Star products have a high market share in a high-growth market
- The company typically invests in stars to maintain or increase their market share
- They generate significant positive cash flow and have the potential for continued growth
- Marketing efforts focus on building brand recognition, increasing market share, and maintaining profitability
- Stars are valuable assets and the business should focus on maximising their potential
86
what is a dog?
- Dog products have a low market share in a low-growth market
- They generate little revenue for the company and have no growth potential
- Businesses often move away (divest) from these to focus on more profitable products
- Marketing efforts for dog products are minimal or zero
87
what marketing strategies are used in a mass market?
- Mass markets focus on building brand awareness and appealing to a broad audience
- Advertising campaigns are usually designed to reach as many people as possible and use mass media such as TV, radio, and print ads
- The messages are often simple and the goal is to create a strong brand identity that resonates with a large segment of the population
88
what marketing strategies are used in niche markets?
- Marketing strategies focus on targeting a specific segment of the population and building relationships with them
- Advertising campaigns are usually more targeted and may use social media to reach potential customers
- The messages are often more detailed and often include technical information that is relevant to the specific needs of the target market
89
what is business to business marketing?
- B2B marketing focuses on selling products to other businesses
- In B2B marketing, the emphasis is on building relationships with other businesses and demonstrating how your product can help them be more successful
- Advertising campaigns may include case studies that demonstrate the value of your product/service
- The messages are often more technical and may focus on features and benefits that are relevant to other businesses
90
what is business to customer marketing?
- B2C marketing focuses on selling products/services directly to consumers e.g clothing retailers
- In B2C marketing the emphasis is on building brand loyalty and creating a positive customer experience
- Advertising campaigns may include social media ads or influencer marketing campaigns that appeal to the emotions of consumers
- The messages are often more emotional and may focus on the lifestyle benefits of using the product/service
91
what are ways to improve to customer loyalty?
- providing excellent customer service
- offering loyalty cards
- offering saver schemes
92
why is an effective HR management (staffing) good?
- ensures that the organization has:
The right people, in the right roles, with the right support, with opportunities to succeed
- This will lead to higher productivity, more profits and a positive work environment
- Human resource management focuses on how employees can be:
Effectively recruited
Effectively deployed (used)
Effectively developed and trained
Effectively motivated
Effectively managed and led
93
what ways can staff can be as an asset?
- Staff are an asset to a business as they bring knowledge, skills, and expertise to the business
- Staff can increase productivity, drive innovation and enhance customer service - all of which contribute to the success and profitability of the business
- Staff can help to build a positive reputation for the business through their interactions with customers, suppliers, and other stakeholders
94
what ways can staff be seen as a cost?
- Staff also generate costs to a business - and for many businesses staffing costs are one of the largest costs they have
- Hiring and training workers
- Managing workers as managers have to be hired
- Paying the salaries of full time workers
- Paying wages of hourly staff
- Additional benefits, such as company cars, pensions, healthcare etc
- Letting workers go (redundancy payments)
95
what impact does the national miniumum wage have on staffing costs?
- if the government introduces (or raises) a national minimum wage it applies to employees who receive a wage rather than a salary
- Businesses that employ workers on a wage basis will face higher labour costs
- Businesses that employ workers on a salary basis are less affected by the introduction of a minimum wage
- They already pay a fixed amount regardless of the number of hours worked
96
what are the 4 ways to developing a flexible workforce?
- multi-skillimg
- part time/temporary
- outsourcing
- flexible working/working from home
97
what are the advantages and disadvantages of multi-skilled workforce?
Advantage
- Business utilise their workforce more efficiently which reduces labour costs and increase productivity
- It can help to improve patient outcomes in healthcare industries as workers with a broader range of skills can provide more comprehensive care
Disadvantage
- May require significant investment in training and development
- May not be appropriate for all job roles, especially those that require a high level of expertise
98
what are the disadvantages and advantages of part time/temporary workers?
Advantages
- Flexible working arrangements can help businesses to attract and retain talent, especially staff who value work-life balance
- This may improve productivity, as staff can work during their most productive hours and avoid distractions
Disadvantages
- Flexible working arrangements can create challenges in terms of communication and collaboration (especially if staff are working remotely)
- Monitoring and managing flexible workers can be more difficult
99
what are the disadvantages and advantages of outsourcing?
Advantages
- This may allow businesses to access specialised skills that may not be available in-house
- May reduce labour costs
Disadvantages
- This may lead to a loss of control over quality and delivery, especially if the outsourcing partner is based in another country
- This may create ethical concerns, especially if the partner is based in a country with lower labour standards or human rights abuses
100
what are the disadvantages and advantages of home working?
Advantages
- Smaller or fewer premises may be required, reducing costs
- High quality workers may be attracted from a wide geographical area
- Workers may be more productive if they work in isolation, away from distractions
- Commuting costs, such as train fares, are eliminated
- Stress reduced as a result of not having to travel to work
- Some flexibility may be possible, allowing workers to manage other commitments
Disadvantages
- The cost of equipping workers with technology to work remotely may be significant
- There may be less opportunity for collaboration between workers, reducing innovation
- Careful monitoring will be required to ensure remote workers remain focused on tasks
- Staff may feel isolated from colleagues
- Household costs such as electricity and heating may increase
- A healthy division between work and home life may be difficult to manage
101
what is the difference between being fired and being made redundant?
- Dismissal is the termination of employment by an employer against the will of the employee
Employees are usually terminated due to their misconduct or poor performance
The employer may choose to dismiss them immediately or provide a notice period which they can work out
- Employees are made redundant when the job is no longer available and the business reduces the size of its workforce
The termination is not due to any fault of the employee
The employer must follow certain legal procedures, including providing notice and paying redundancy compensation
102
what are individual approches to employer employee relationships?
- Focuses on the relationship between an employee and their employer
- Assumes that each employee is unique and has their own goals, motivations, and interests
- It emphasises the need for tailored compensation packages that cater to each employee's unique skills and needs
- The employment relationship is a voluntary agreement between two parties in which both negotiate their respective roles, responsibilities and benefits
- The employer has the power to hire, fire, and set the terms and conditions of employment
103
what is the collective barganing approach to employee vs employer relationships?
- A process whereby a group of employees (represented by a trade union) negotiate with their employer for better wages, working conditions and benefits
- Employees have more bargaining power when they negotiate collectively rather than as individuals
- The employment relationship is seen as a power struggle between two parties with conflicting interests
- The employer wants to maximise profits by keeping labour costs low
- The employees want to maximise their wages and benefits
- The union acts as the collective voice of the employees and bargains with the employer on behalf of all workers
