Flashcards in Unit 3 Deck (66):
Why is marketing important to a business?
- reduce risk of product failure
- understand their customers
- communicate and advertise their product
- keep up with market trends (customer needs)
What is the marketing process ?
- to identify and understand customer needs
- developing and testing products and services
- communicating products to customers
What is market segmentation?
A market segment is group of customers in a market that have similar characteristics and needs
What are the benefits of market segmentation?
-Carry out market research
- tailor products to customer needs
- target promotions as specific groups
What is market research?
Market research is about gathering information about customers, competitors and market trends by collecting qualitative and quantitative data
What are the threestages of market research
- planning and designing the research
- doing the research
- analysing the information
What is product trial?
The product trial is when consumers buy a product for the first time to decide if they want to buy it again. If this is succcessful it could lead to repeat purchase and customer loyalty
Methods for product trial
- public relations
- free samples
- viral marketing
- low trial prices
Methods of repeat purchase
- special promotions
- reminders adverts
- product innovations
- customer loyalty schemes
What are the four steps in the product life cycle?
- introduction- when the product is launched
- growth- first profit made if product launch successful
- maturity - sales growth slows down but repeat purchase and customer loyalty continues - no new customers - goes to
- decline - product sales decline - product goes out of date
What is a product portfolio used for?
- what products to launch and when
- when to withdraw a product
- what products are doing well/ badly now or in the future
- how to increase sales
How is cash flow affected by each stage of the product lifecycle?
Introduction phase : cash flow is negative
Growth phase : net cash flow is positive but gradual
Maturity : cash flow is positive
decline: the business will start to experience cash flow issues
What is the Boston matrix
A product portfolio analysis tool used to plan the development of products
What is the star in the Boston matrix
A successful product
Growth has to be funded to keep up with demand
Cash flow may be an issue
What is the Cash cow in the boston matrix
An established but profitable product
What is the ?/ problem child in the boston matrix
Presents a problem , should the business invest to increase sales?
What is the dog in the boston matrix
But should the business continue to sell if it supports other products
BRANDING AND DIFFERENTIATION
Yeah do this
What are the 4 P’s?
Why is product important?
The product must meet the needs of the customer
Why is price important
The price gives the customers an indication of quality. in a competitive market changes in price can have a significant impact on demand
Branded product generally have a higher price because they are more expensive to produce and promote
Why should you promote a product ?
-To create awareness
Communicates product benefits and features to customers
- builds a strong branding image
What is place?
Having a product available to customers when and where they want it
Name three types of place
What is JIT stock control?
When stock is only delivered when needed to the production business. This means the business does not hold any stock . For this to work , they must have a good relationship with suppliers.
What is JIC stock control
What are the benefits of holding stock
-Businesses can meet unpredicted surges in demand
- businesses can replace damaged goods
- businesses can receive discounts for bulk buying
What are the benefits of holding little or no stock
- costs saving in not having to store stock
- less risk of damaged /stolen stock
- employees can focus on tasks other than managing stock
- can reduce costs of production which can increase competitiveness
What is quality control?
Part of the chain of production, a quality controller will examine the product to make sure it is up to standard
What is quality assurance
Involves focusing on quality in every stage of the production process
Everyone is involved and responsible for the outcome of the product
What are the benefits of good quality ?
Allows for a premium price to be charged
- builds a strong brand image
- ensures customer needs are met
- quality is a way of differentiating a product
Methods of increasing productivity
What is the break even point?
The point on the graph where revenue and total costs meet
What happens if the total revenue is above and below break even point??
If it is above, profit is made
If it below you make a loss
What is the margin of safety?
The amount of output between the actual level of output where profit is being made and the break even level of output.
When is breakeven analysis useful?
-Setting and achieving targets
- launching a new product
How can a business finance growth?
(overdraft, loans, bonds, trade credit)
(Owners funds, asset sales,retained profit )
What are the risks of sourcing finance ?
Selling shares may mean owners lose, or cash flow problems may result from meeting loan repayment terms
What are the cost of sourcing finance ?
The cost of borrowing varies across different sources
What are the availability of sourcing finance ?
Some sources, such as loans or share capital, might not be accessible
What is a centralised organisational structure ?
Centralised decisions are made by senior managers
What are decentralised structures?
Decentralised esicisond amy be put tdown to delegated to regional employees at local stores and branches
What is a advantage of a centralised structure?
- increased control and standardisation
What is a disadvantage to a centralised structure?
Decisions can be slow
What is an advantage to a decentralised structure?
Decisions devolved to branches or devisions that may know their customers better
What is a disadvantage to a decentralised structure
Loss of control over decisions and difficult to execute if communication needs to be improved
What can a motivated workforce lead to?
A hard working workforce that is willing to go the extra mile
- a greater commitment to the organisation
- less time off with illness
- improve customer service
- improved communication within the business
What are the five needs that motivate staff according to Maslow’s triangle
1. Physiological - providing a clean and safe working environment to well paid jobs
2. Safety - ensuring that long term progression and job security
3 love and belonging- organising the work force into teams, creating opportunities for employees to socialise
4. Self esteem
Creating promotion opportunities, empowering employees , using incentives to motivate
5. Self actualisation
Creating job opportunities, promotion and training to allow employees to achieve their potential
What is needed for communication to be affective in a business?
- the sender has to use an appropriate medium to reach the receiver
- feedback should also be available to ensure the communication has been successful
What can communication impact on in a business?
- employee motivation
- customer service
- the number of mistakes made
- the understanding of employees
- the speed of decision making
- the brand of the business
What is remuneration?
The payment system adopted by a business to pay and reward employees
What are the types of worker?
- part- time workers
- full - time worker
- temporary workers
- free-lance worker (self employed)
- manual workers
- non-manual workers
What is a pressure group?
Organisations that try to get businesses to change what they are doing
What are the short term environmental effects on a business
- traffic congestion through transport and deliveries
- air ,noise and water pollution through manufacturing and the industry
What are the long term environmental effects on businesses
- climate change
- depletion of land, food and natural resources
What are the ways of reducing the environmental impact of business
- use of renewable energy
- replenishment and conservation of natural resources
- biodegradable packaging
- reduction in food miles
- social enterprise
What factors influence international trade ?
- how developed each country is
- government regulation in imports or exports
What are the government and EU regulations on a business
- accounting regulations
- the trade descriptions act
- minimum wage
- health and safety laws
- maternity and paternity rights
What are examples of government taxation’s?
- corporation tax
- income tax
- national insurance
What is an advantage of minimum wage ?
Small business can compete with larger businesses who may force down wage rates
What is a drawback to minimal wage?
- higher costs of labour can reduce profits
What is a benefit of health and safety regulations
Fewer work related accidents and injuries that the business is responsible for
What is a drawback to health and safety regulations
Costs of health and safety regulations can hinder productivity