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
-Advertising - 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purchase and customer loyalty continues - no new customers - goes to - decline - product sales decline - product goes out of date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
Little growth 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
Few prospects But should the business continue to sell if it supports other products
BRANDING AND DIFFERENTIATION
Yeah do this
What are the 4 P’s?
- promotion - price - product - place
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
-direct - wholesaler - retail
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?
-external sources (overdraft, loans, bonds, trade credit) -internal sources (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
- recycling - 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?
- VAT - 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
What is the best definition of the term marketing? - selling products to customers effectively - satisfying customer needs profitably - making a product for the market - targeting a certain part of the market
Satisfying customers needs profitably
what is piece rate?
a form of remunderation for employees where they are paid according to
how many products they produce (not hourly etc)
what is meant by the term
a salary is payment (remuneration) made over a year
divided into 12 monthly payments
Identify two examples of
Two of :
- company cars
- pension scheme
- health care/insurance
- shares in he company
- free uniform/ meals
(These are non-monetary payments)
explain one reason why branding is important to a company
- builds customer loyalty
- makes the company stand out in their own market
- Allows comany to charge higher prices without loss of demand
- makes it more difficult for new firms to set up in competition
- branding will add value to the company
give one way that a business can encourage
repeat purchase of its products
- lower prices/special offers
- encourage more retailers to sell them
describe the 'Just in Time' method of stock control
a business holds no stock and instead relies upon deliveries
of raw materials and components to arrive exactly when they are needed.
explain the term
profit is the difference between
revenue and total costs
define the term
is the capital/money raised from issuing/selling new shares in the business.
what does the term 'ethics' mean in business?
Ethics are a set of moral principles.
This might involve considering whether it is right for the business to do something because it might impact unfairly on one or more stakeholders
e.g. treating workers badly in factories abroad.
List 2 methods of import protection that can be used by the EU
• Tariffs/customs duties.
• Any other relevant non-tariff barrier e.g. safety laws/legislation
state two methods of collecting market research information
- focus groups
- product trials
Describe the term
The amount of products one worker can make in one hour
Other than increasing wages,
give three methods a company can motivate its workers
one of :
- fringe benefits (pension, company car)
- good working conditions
- flexible working
describe the term
the process of checking that a product/service
meets a minimum agreed standard at the end of the manufacturing process
what is meant by the term
design mix ?
of a product
what is meant by the term
a named product which consumers perceive as being different
from competing products