adv and dis Flashcards
mass market definition
product has wide appeal
sells to large groups of buyers
niche market definition
product is specialised
sell to specific group of buyers
mass market adv
increased sales volume as selling to more customers
achieve EOS
meaning produts can be sold cheaper
niche market adv
less compeittion
specialised productes-charge higher prices
niche market dis
narrower range of consumers
more risky
if change in market that affects what customers want to buy, they could quickly lose sales and struggle to survive
market size
total value of sales in a makret over a period of time
market share
total proportion of total market that the business holds
what ways can dynamic markets change
Consumer prefernces can change e.g advancements in fahion, technology
Innovation-new products emerging
Competiors can enter or leave the market
ways in whcih consumers want to shop e.g growth of online shopping
what does being dynamic mean
change and evolve rapidly
online retailing
selling via the internet
adv of online retailing
reduce firms costs as wont have to hace physical shop, dont have to hire as many staff
therefore, can chnage lower prices
customers can shop from anywhere, whenever
customers can easily compare their prices
dis of online retailing
delivery costs/people havig to pay more then would in shop
face more comp as can easily shop around abd finding cheapiest prices
some customers would want he face to face intercation especially before buying a costly product e.g sofa
direct competition
when two busienss sell simialr products to the same groups of buyers
e.g asda, tesco
indirect competition
when two business difefrent porducts to appeal same group of buyers
e.g takeway chinese, indian
level of competition
marking mix
product-high quality, materials, unqiue appeal, difefrentiating it
place-distibution channel,
price-high price, low price, what pricing stragetu
pomotion-using campaigns, advertising
risks
things that may go wrong
within managerial control
uncertainities
unexpected events
e.g hurricane
beyond control
product orientation
where focus more on the product(design, performance) rather then who selling too
hope can persuade customers to like it
e.g apple
market orinetation
where busienss focuses more heavily on customer preferenecs
spend lot of time and investment into market research to make sure customers will like it and want to buy it
more modern adn successful approach
less risky strategy
market research
collection and analysis of market information
adv of market research
finds out what customers need and want
allows business to predict how much demand there will be fore product
how customers behave in relation to a product e.g how they buy products e.g online or in store
shows how much customers will be prepared to pay for product
quantitive data
objective
statistical info and graphs etc
multiple choice questionaries
fixed answers
adv-easy to analyse
dis-rstricted answers
qualatative data
subjective
based on optinions
open questions meaning doesnt restrict to multipe choice
adv-more informative as people can elaborate
dis-takes longer time
primary reseach
first hadn data
e.g questionaires, surveys
adv of primary rresearch
exculsive and comeptiors cant benefit from it
specific for its purpose needed
dis of primary resaerch
labour intensive
slow
expensive
secondary data
second hand data e.g magazies, internet soucres
adv of secondary makret resaerch
quick
fast
cheap
dis of secondary makret research
risk of being out of date
represnative sample
using samll sample of peole rather than whole market
keeps costs down and saves time and resources
simialr peope; of age, gender,
market research needs to avodi bias
interviewer bias-where they say certain things to prompt answer they wanna hear
respondant bias-where dont give true response just say what they think interviewer wants to hear
adv of using technology in market research
cheaper
easier
quicker
ways of doing makret research online
using own website
adv of using own website
can look at what time of day website most used
what visitors clicking on website
did of using own website
some people who go on website don’t end up buying products
social networking definition
can be used for market research
use of internet based platforms to connect with people
e.g facebook
adv of social networking
can post content on social networking sites and monitor the responses they get
cheap and easy way to carry out market research
did if social networking
not all consumers use the same social networks
e.g fewer old people use twitter than facebook
market segmention definiton
dividing a makret into groups of buyers
Demographic-age,gender
Income-luxury products for high income etc
Geographic segments-neighbourhood, city, country
behaviour-hobbies and interested e.g gym people wanting high protein snacks
market mapping definiton
shows extemres of two measures
e.g high price bad low price
laid out as matrix
adv of market mapping
can see gaps in market so can be spotted by new business
can see how close competitors are
show how much customers expect to pay
dis of makret mapping
subjective/based on opinion
what one person may think is low quality another may see as high
may simply things too much
competitive advantage definition
where a business is more profitable than its rivals
ways of achieve competitive advantage
product differniation-USP
lower costs from competitors
product innovation-be first in the makret to introduce new functions for an existing good
advertising and marketing-makes it more attractive to consumers and more likely to become loyal
good customer service-polite,knowledgeable and efficient staff
adding value
increasing the difference between how much it cost to make the product and how much selling it for
factors influencing demand
fashion consumer tastes and consumer preferences-e.g increase in warnings about damage of sugar, fall in demand for sugary drinks
advertising and branding-more adverting, higher demand
consumers incomes-higher income higher demand
completaey goods-products which are used together e.g fall of demand for printers means fall of demand for ink cartilages too
external shocks-e.g risk on flooding, increase in sandbags to protect homes
factoids influencing supply
costs of production-if increases, fall in supply
indirect taxes-tax in good increases, increases costs for producer, likely to reduce their supply
subsidises-money given to business by government
increases supply
new technology-increase supply as more efficiency and lower costs
extberal shcoks-can reduce cupply in country if their is war
price elasticity of demand equation
percentage change in quantity demanded divided by percentage change in price
price elastic
percentage chnage in demand is greater then percentage change in price
price inelastic
where percentage change in demand is less than percentage chnage in price
examples of things that are price inelastic
necessities e.g milk as change in price doesn’t affect demand much
price elastic products
more likely to be products that cost a greater proportion of customers incomes
e.g won’t care much about 20% increase in a newspaper but will care for 20% increase in car and may make them look for an alternative
income elasticity of demand equation
percentage chnage in quantity demanded divided by percentage change in income
products affected by income elasticity of demand
necessity’s-postive income elatiocity of demand as income rises so does demand
luxury products have income elasticity of demand as income increases so does demand
INFERIOR products(own brands) have a negative income elasticity of demand as income rises, demand falls
design mix
Function
Aesthetics
Costs
marketing mix
place-distribution
price-pricing strategies
promotion-branding techniques
product-high quailtiy
design mix
Function-fit for purpose
Aesthetics-good look
Costs-is it to costly to produce
study tip-FACE
promotion
designed to inform consumers about a product, persude them to buy it
types of branding
Manufacturer branding-how business presents itself
Own branding-in house
product branding-specific individual products that a cooperate brand makes
study tip:MOP
adv of own branding
cheaper to produce
can sell cheaper
cheaper to sell/good alternative
dis of own branding
low price can be associated with low quality
rebranding
changing design, promotion pricing or distribution to an existing brand
viral marketing
involves platforms e.g youtube, instagram, facebook
emotional branding
branding is matched to the lifestyle, values or aspirations of customers to trigger an emotional response
price skimming
where innovative products are sold at high price when first reach market
consumers will pay more due to the value
after year or so, price is dropped
adv of price skimming
keeps brand more exclusive in long term e.g Apple
dis of price skimming
potential customers can be out of initial high price
customer who brought product for initial price may be annoyed and frustrated when it suddenly drops in price after launch
pe eat ration pricing
charging low prices when hit market to attract customers
then slowly increasing the price
dis of penetration pricing
customers may expect low price to continue so sifuicult to raise without losing customers
cost plus pricing
firm adds percentage mark up to the costs of making the product
predatory pricing
business deliberately lowers their prices to force out other business out of makret
raise them back up once business has gone out of buys ones
did-illegal in EU laws
competitive pricing
pricing products equal to or below competitors to gain competitor advantage
psychological pricing
making it 1.99 as seems lot cheaper then 2.00
high price as associate with high quality
distribution
route product takes from menufacturore to consumer
distribution channels
two stage channel-manufacturer-consumer
(online retailing)
three stage channel-manufacturer-retailer-consumer
(e.g shops)
four stage channel-
manufacturer-wholesaler-retailer-consumer
what’s a whole saler
buy sum goods from manufacturers in bulk and then sell to retailers in smaller quantities
used as storage
adv of wholesaler
manufacturers don’t have to wait for product to be sold before getting money
make distribution simplier
without wholsaler, manufacturer would have to make separate deliveries to retailers
can store more goods than retailers can-act as storage cupboard
what is multi channel distribution
where a business uses several distribution channels at once
e.g online and in store
online distribution
streaming or downloading media content via internet
online distribution
there downloading media content as opposed to buying a good-purchasing a service rather than a good
adv of online distribution
cost savings-no need for money on boxed products
price of downloads for consumer can be cheaper then buying physical good
enviornamylk frindsly-travels or products with plastics
relatively easy and can be run anywhere, don’t have to go to shop
dis of online distribution
differnt sets of skills
need further training in IT skills
what makes up product life cycle
Development
Introduction
Growth
Maturity
Decline
development
research and development department to develop product
costs are high, sales aren’t yet made to cover costs
introduction stage
product is launched
promoted heavility to build sales
may use price skimming, may use penetration pricing
sales revenue has to pay for fixes costs of development before product can make profit
growth
sales grow fast
repeated and new customers
competitors may be attracted to new market
maturity
sales reach a peak and profitability increases because fixed costs of development have been payed for
saturation-makret has reached full growth
sales may begin to crop
decline
product does appeal to customers anymore
sales fall rapidly and profits decrease
extension strategies
keep a product going stronger for longer
used to improve sales of a product starting to decline
e.g redesigning the product, changing the packaging
boston matrix what does it measure
imparts market growth and market share
question marks
small makret share
high makret growth
aren’t yet profitable
need heavy marketing to give them a chance
cash cows
high makret share, low market growth
maturity phase
bring in plenty of money
stars
high market share and high market growth
profitable growth stage
have most potential
dogs
low makret share
low makret growth
basically a lost cause
adv of boston matrix
valuable way of showing where business product positioned in makret
dis of boston matrix
can’t predict exactly what will happen in a makret
mass marketing strategies
expensive advertising campaigns to maintain brand awareness
sponsorship and celebrity endorsement deals
promotional activities
custodyly loyalt card and saver schemes
niche marketing strategy
needs to focus on specific marketing segment
more emphasised on creating product that is unique or differentiated
cost effective ways as don’t have big budget
focus more on building a reputation and establish brand loyalty
B2B marketing strategy
sale of one business product to another business e,g selling surgical gloves to a local hospital trust
B2C marketing
sales of business products to consumers
loyalty cards
e.g getting a stamp each time buy a drink
once collected certain amount get free drink
encourages customer to regularly return to business
saver schemes
customers collect points based on amount they spend e.g TESCO club card
how are employees an asset to a business
do soemthing in business that has value
skills and abilities add value
how are employees liabilities of a busienss
have to be paid so cost busienss money
dismissal
contract endds for the employee
redundancy
job is no longer needed
zero hour contracts
firm employees worker but does not offer them guaranteed offers
used when needed
adv-can work around other commitmeents
dis-provides little finical security
outsourcing
outsource tasks to external businesses
what does it mean havign multi-skilled staff
means dont have to employs as many staff
workers can be moved when necessary
recutiment
process of finding and hiring someone for job role that needs filling
stages of recuritment
identify vacancy
wirte job descirption and job specification
advertise job
process applications
shortlist most suitabel candidates
asses most suitable candidates
appoint most suitbale candidate
what is a job descrition
job role
salart
repsonbilites
job specification
includes qualifications of what job needs
what are the 3 wasy to select candiadtes
assement days
intray exercises
interviews
iai
interviews
most common method
one to one
or face to face
assessment days
range of activties to assess candiates
group exercises
in tray exercises
given a scenerio in which play a member of staff
given list of tasks that need completing
e.g emails, phone calls
internal recuritment
recuritng someone who is already in the busienss
external recuritment
recuritng someone outside of the business
adv of internal ercurimtent
know they get along with other staff
doesnt take long
cheap
motiavtes workers for promotion
dis of internal recuritment
leaves vacancy in other department
can cause resentment betweeen collegues
adv of exertnal recuriment
bring in new fresh ideas
may have knowlegde about other businesses
larger numner of applicants
dis of external recuritment
expensive
long peridod
dont know if we get along with others
what are potential costs of recuting
costs of vacancy post-adverts placed in magazines
once appointed, may need trainign
induction training
introducing them to the work place and their new role
on the job training
training inside business
off th job training
doing trainign from outside business
adv of on the job training
specific
cheap
dis of on the job training
no new ideas brought into business
trainers are not fully productive dueintg training
adv of off the job training
specialsitis
new ideas brought into business
dis of off the job training
not specific
expensive
no beefit to business whilst training
what are centralised organisations
all decisions are made by senior managers at top of business
adv of centralised organitstion
decisions can be made quickly as dont have to consult anyone
have lots of experince of makign decisions
dis of centralised organitation
excluding employees from decision making can be demotivating
organisation recats slowly to change
decentralised organisations
authoity is shared out to more junior employees
adv of decentralised organisations
involvement in decision making increases motivation
can use expert knowlegdge of their sector
dis of decentralised organsiations
may not have enough experince making decisions
taylors scientific managment
concentrate of effeciency
workers were motivated by MONEY
believes would do minimum amount of work if left to own devices
favoured division of labour-breaking down work into a lot of small repetitive tasks
in paying workers by the quantitiy they produced
adv-few workers needed
dis-increase in productivity led to reduction in quality
maslows heirachy of needs
BSSSS
basic hysic needs-food, shelter
safety-safe work environment
social needs-friendship, team work
self esteem-achievennt
self actusaliton-meating full potential
dis of maslows heirachy of needs
isnt always obvious whcih level an idnididual is in
someone may put there list of imporatnce in difefrent order e.g may value freinship more then reaching full potential
Herzberg’s two factor theory
foun two groups that influence motiavtion of workers
hygiene factors-working condicitons, pay
motiavting factors-interesting work
mayos human relation theory
one group of employees worked in usual workign condiditons
one group had their working conditions changed
e.g changes in length and number of breaks
brightness of workplace
foudn that group exposed to changes showed increase in productivity even if working conditions got worse
attention givent ot workers by managemnt that imporvedd producitty, not any sepcific change in working conditions
showed increase in prodcutivity if worked in teams rather then individually
non financial motivation is piecework
when workers are paid per unit prodcued
commision
paid when completed a task
often bonsu on top of their salary
leadership styles
autocratic-when manager makes all decisions
workers dont ahve say
useful when dealing with unskilled workers
paterlistic-softer form of autocratic
make decsiosn but then talk to staff and persude them that they ar of thier interset
democratic-leader ancourages workers to partciapte in decisions making process
delegate repsonsbility and listen to advice
laissez faire-hands off form of leadership
rarealy interfere with running of business
transformational leader-when business needs to drastically change
what is profit maximiatision
making as much profit as ossible
profit satisying
making enough but not pushing to maximise it
what are different types of busienss es
franchise-an aggrement which allows an entrepreneu to use busienss idea, name,logo to an establishedd business
online businesses0trade though internt
lifestyle businesses-focus on lifestyle not profit
