Business management 2 Flashcards
What is market research?
The process of finding and analysing information about the customer wants and needs and the nature of the market
Whys is market research carried out?
To help business make decisions that will appeal to customers and allow them to compete
How does market research help? (3 points)
Allows businesses to gain insight into an industry and assess the potential success of the concept
Aims to provide qualitative and quantitative data
More detailed understanding of industry and customer tastes -> make more informed decisions about the business -> allow the business to adapt to what the customer wants
What are the 3 main areas that market research can be used in
1) To identify new opportunities
2) To assess the feasibility of different plans/ideas (feasibility study)
3) To review the success of the plans/ideas once implemented
What is primary research
The collection of information first-hand by a business for a specific purpose
Examples of primary research
Surveys, questionnaires, interviews, observations
Advantages of primary research (2)
Data is accurate and up to date
Fully specific to the purpose or cause
Disadvantages of primary research (4)
1) Time-consuming
2) Expensive
3) May be biased if the business is inexperienced in carrying out research
4) May lack validity if the research was not conducted amongst a large and relevant audience
What is secondary research?
The use of information that has been collected previously. This could be by another organisation/business or for a different purpose
Examples of secondary research
Newspapers, reports, websites (internet), journals, statistics
Advantages of secondary research (2)
1) Often cheaper than conducting primary research
2) Quicker as the information is already available
Disadvantages of secondary research (2)
1) Not completely applicable to specific requirements of the business
2) Business is not aware of the conditions under which the research has been conducted
Market research process
1) Research objectives
2) Perform secondary research and analyse the data
3) Decide on primary research methods
4) Conduct primary research and analyse the data
5) Present the data and produce the report
What is qualitative data
Non-numerical data including opinions or written responses
What is quantitative data
Numerical data, such as figures and statistics that can be more easily analysed
What is the marketing mix
The elements of a firm’s approach to marketing that enable it to satisfy and delight its customers
What are the 4 P’s used for
The 4P’s are manipulated by the firm:
To maximise sales and profit
Create a bran
Develop customer loyalty
Create a unique ceiling point/preposition
What are the 4 P’s
Place, price, promotion, product
What is product
This includes the physical features and specifications of the product
What is SWOT
Is a study undertaken by an organisation to identify its internal strengths and weaknesses, as well as its external opportunities and threats
Strengths
Internal
Factors that are positive relative to competitors (e.g innovative staff, products unique selling point)
Weaknesses
Internal
Factors that are negative relative to competitors (e.g high wastage, high staff turnover)
Opportunities
External
Factors in the external environments that can be beneficial to the organisation
(e.g move into foreign markets)
Threats
External
Factors in the external environment that can be detrimental to the organisation
(e.g increased competition, the need to keep up with changing technology)
Benefits of SWOT
A SWOT is an analysis of the effectiveness of the company’s operation and the internal factors which influence its success
Shows the current and potential future positon of a company
Highlights the company’s strengths and weaknesses against competitors
Used to help the company meet consumer needs and keep up with the competition
Drawbacks of SWOT
Weaknesses and strengths are often a matter of perception rather than fact (often through consumer research)
May be advisable to employ an outside company to carry out regular audit of the business
Open to interpretation (no 2 opinions are the same)
Information is never perfect and the future always changes
What is management style
Behaviour and attitude of the manager
What are the situational variables
Nature of task
Time
Experience of employees
Manager of preference
Nature of task
Is the task dangerous? creative? straightforward?
Time
Is there any time pressure? What time frame is involved in decision making process?
Manager of preference
What does their personality align with?
What are the management styles
Autocratic
Consultative
Laissez Faire
Factors in management styles
Decision making
Communication
Importance placed on
Control
Autocratic
Decision making: centralised - manager makes the decisions with no staff input
Communication: one way-top down and very clear directions given/ employees are told what to do
Importance placed on: completing the task efficiently and effectively (tends to be degree of uniformity)
Control: high lvl of control
When is autocratic appropriate (situational variables)
Nature of task: High risk or crisis situation, large groups of employees working on a task simple in nature
Time: limited
Experience of employees: lack the skills, knowledge and experience to complete the task
Manager preference: prefers to maintain control, can fear delegating/ lacks faith in staff
Advantages of autocratic
High level of clarity = clearly defined procedures = consistency in outcome
Employees’ roles and expectations are set out plainly = performance can be monitored + staff held accountable
Decisions made quickly = highly responsive in time of crisis
Disadvantages of autocratic
Doesn’t allow the manager to access staff knowledge/ ideas = potential that the best decision is not made
Employees = no power = no chance to develop skills + feel undervalues = decrease morale -> low job satisfaction -> high staff turnover
An ‘us and them’ mentality may develop = lack of employee pride in performance = meet expectations but don’t go above = lower overall business performance
Consultative
Decision making: Decisions made by management (centralised) AFTER discussion with employees to obtain opinion
Communication: Two-way communication
Importance placed on: obtaining info from staff to improve decision making BUT management is still responsible
Control: Manager maintain ultimate control HW greater importance is placed on employee involvement + some control over information flow is passed over during decision making process
When is consultative appropriate
Nature of task: More complex/creative tasks, when there are elements of the task where employees have more knowledge than the manager, when there are a wide variety of considerations to be taken into account (different interests from different stakeholders)
Time: limited time pressure - may take time to consult employees
Experience of employees: higher levels of experience and skills - employees may have very detailed knowledge of elements of area/decision being made about but not knowledge of the ‘big picture’
Manager preference: likes to include employees and values input, however, still makes final decision
Consultative advantages
Greater variety of ideas = improve management decisions = improved business performance
Employees have some ownership = increased motivation and commitment
Employee development/learning through consultation process + enables management to identify high potential staff based on input = increase employee development
