1.3/1.4/1.5 Flashcards
4 ps
Product
Promotion
Pricing
Place
Different ways to advertise
Sales promotions
Direct marketing e.g via post
Direct selling
Sponsorship
Public relations
Benefit of strong branding
Adds value
Less price elastic
Perceives a higher quality product
Repeated purchases
Factors affecting pricing
Set to cover the cost to make the product
Acceptable for consumers
Be in line with business objectives
Level of competition
Strong USP
Price skimming
Where new and innovative products are sold at a high price when they first enter the market.
Penetration pricing
Launching product at a low price in order to attract custom and gain market share.
Mark up (eq)
Unit cost + (unit cost / 100 X mark- up
Predatory pricing
Business deliberately lowers prices to force another business out of market.
Competitive pricing
When a business monitor their competitors pricing that ensure their prices are equal or lower level.
Channel of distribution
Is the route a product takes from a manufacturer or producer to the consumer.
Direct selling (distribution channel)
Manufacturer to the consumer
Indirect selling (Distribution channel)
Manufacturer to retailer to consumer
Indirect selling (4 stages)
Manufacturer to wholesaler to retailer to consumer
Online distribution
Is the streaming or downloading of media content
5 stages of product lifecycle
Development, introduction, growth, maturity, decline
Development stage of product life cycle
R and D
Market research
Costs are high
High failure rate
Introduction
Launch of product
Heavy promotion
Initial price may be high to cover development costs
Growth stage of product life cycle
New and repeat customers
Competition rises
Product is improved or developed
Maturity stage of product life cycle
Peak of sales
Market saturation
Competition fierce sales may fall
Decline stage of product life cycle
Product loses appeal
May stay profitable with reduced promotional costs
Product may be withdrawn
Product portfolio
Combination of all the product lines a business produces
Question mark
Small market share, high market growth
Require heavy marketing
Cash cows
high market share, low market growth.
Maturity phase
Low advertising, high sales
Stars
High growth and high market share
However will need to spend a lot on advertising as competitors are trying to maximise growth as well.
Dogs
Low market share low growth
No longer making profit may consider extension strategies
advantages of seeing staff as an asset
- skills and abilities can add value to the product e.g high quality
-helps to keep staff motivated and increase productivity
wage
paid to worker on how much work they have done e.g amount of hours
dismissed and redundancy
D- breached contract of employment
R- their job is no longer needed
ways of staff working
- full or part time more beneficial as have more people to cover absenteeism
-Zero hour means employees has no minimum hours and don’t have to accept work so can be hard to find workers at busy times
-permanent or fixed contracts
-shift work
-home working
-flexible working- employees come in at hours that suit them
-outsourcing
benefits and drawbacks of a flexible multi skilled workforce
+ can employ fewer workers
+lower recruitment costs
+absent staff easily covered as workers can switch tasks
+increase motivation as more variety to the job
- additional training costs
-expect higher pay
recruitment def
process of finding and hiring someone for the job role that needs filling
ways of assessing candidates
- interviews
-assessment days
-in-tray exercises (scenario planning)
pros and cons of internal recruitment
+ candidates already know the business
+short and cheap
+motivates workers to go for promotion
-leaves a vacancy in another department
-can cause resentment in colleagues who are’t elected
pros and cons of external recruitment
+new ideas
+experience from rivals/ others
+ larger number of applicants
-long and expensive
-need a longer induction process
- have no knowledge of what candidate will be like to work with
pros and cons of on the job training
+ easy to organise
+lower costs
+job specific
-not fully productive
-bad practises are passed on
-no new ideas
pros and cons of off the job training
+ trainers are specialists
+new ideas are brought to the business
+no distractions
-expensive
-no benefit to business whilst training
-not specific
tall structures one pro and con
long chain of command
- long time to communication through the levels
+ opportunities for promotion
flat structures one pro and con
- horizontal communication can be slow due top large numbers of people
+people given more freedom and responsibility
span of control
number of people who report directly to the manager
pro and cons of delayering
+ lower costs
+ improves efficiency and communication
- new staff may have to be re-trained which can cost
-redundancy pay
- managers can become stressed if too much delayering as over worked with huge spans of control
centralised and decentralised structures
Centralised - decisions made by people at the top
decentralised - decisions made by lower managers or team leaders
pros and cons of centralised structure
+ leaders have experience in making business decisions
+managers get more of an overview improves consistency of decisions
+ no bias towards a department
-demotivating to exclude lower down employees
-react slower as mangers aren’t so in touch with consumer trends
pros and cons of a decentralised structure
+ employees involvement in decision making helps motivation
+quick decisions
+ expert knowledge in specific sector
- lack experience
-inconsistent in each sector
- fail to see overal situation
matrix structure
project based
Taylor theory of motivation
- money main motivation
-pay workers on quantity they produced to increase productivity
( lead to a reduction in quality and supervisors needed)
Maslow’s hierarchy of needs
Basic physical needs- food
Safety- job security
Social needs- friendship/teamwork
self-esteem - achievement
self-actualisation- meeting potential
Herzbergs 2 factor theory
Hygiene factors: good company policy, supervision, good working conditions, pay, relations. Don’t motivate as much but if aren’t good workers get dissatisfied
Motivating factors: interesting work, personal achievement, recognition- motivating factors
Mayo’s human relations theory of motivation
- tests showed that change improved productivity
-meet social needs of employees to increase motivation - e.g social clubs
3 methods of non financial motivation
job enlargement- greater range of work
job enrichment- more challenging work to give employee more responsibility
job rotation- move from one task to another
3 methods of financial incentives
piece work- paid per unit
commission- paid for completing tasks, often a bonus on their salary
profit sharing
Leader
often have a vision, drive that they share with others
think long term on ways to improve and innovate
managers
make decisions on a day to day running of the business.
paternalistic leadership style
softer form of autocratic
focus more on employee well being and motivation
entrepreneur
person who sets up a business
take risks
barriers to entrepreneurship
lack of money
lack of confidence- fear of failure
lack training/ knowledge
lack ability to seek to grow
financial and non financial motives for an entrepreneur
financial
-profit maximisation
-profit satisficing- making enough but not maximising
non financial
-independence
-flexibility
- solving social and ethical issues
aim
broad target, long term
objective
specific target, short term
pros and cons of sole trader
+ freedom
+profit
-long hours
-unlimited liability
pros and cons of partnership
+more capital put into business with 2 people
+shared decision making
+ faster growth
-conflict may arise
-shared profits
pros and cons of limited liability
+ can sell shares to gain capital
+ financial protection of being limited
-publish accounts
-more owners which means less profit
franchise
an agreement which allows an entrepreneur to use a business name, logo and reputation of an established business
trade off
one thing is reduced or given up in order to increase or gain another.
opportunity cost
the benefit that’s given up in order to do something else
