Exam Specific Questions Flashcards
Proposed Marketing Plan
Product
Combination of utilities to satisfy needs of offered by businesses
Consumers can learn about them, obtain them and use them.
Durable - long lifespan like furniture
Non-durable - short lifespan like sweets
Convenience Products - know well (groceries)
Selective Products - compare with variety of shops (suitable, quality, price & style).
Specialty Products - unique characteristics (cars) special effort to purchase
Proposed Marketing Plan
Price
Amount of money consumer gives in exchange for product or service
Price value = value consumer gets
Price determined by
Cost price of product Cost to run business Reasonable profit Competitors' prices Demand/supply
Proposed Marketing Plan
Place
Near home Good Parking Place Good Prices Quality Products Helpful service Good security Clean & neat Enough space between shelves Good ventilation & lighting Large variety of products Convenient business hours Regular Special Offers Variety of Packaging Credit Service
Proposed Marketing Plan
Promotion
Inform, remind, persuade consumers to buy products/services
Advertising - Impersonal mass communication - identifiable sponsor pays.
Personal Sales - person to person communication to try to convince consumer to buy product.
Sales promotion method - personal & impersonal way to get consumers to buy products - free samples, competitions, bonus products
Publicity - impersonal stimulation of demand for product by giving news information to mass media -> favourable & free news coverage obtained -eg, sponsorship & news conference
Franchise Contract
Expiry date of contract
Start-up date for franchise
Franchisee
Possibility to renew contract
Exclusive rights to do business in specified area.
Independent contractor -> not employee of franchiser
Should obey all laws & regulations
Can’t share information about business of franchise to public.
Franchiser
Not liable for actions of franchisee
Must approve business area.
Can’t share info about franchisee & business with public.
People as Consumers
Rights of Consumers
Right to correct information - can only make well informed decisions if protected against dishonest & misleading information.
Right to safety - heath or lives never at risk.
Right to free choice - choose between variety of products & services -> if no alternative must satisfy needs.
Right to get products or services at realistic prices - price value of product or service = value consumer gets from product or service.
Right to makes needs known - Express needs of what product & quality.
People as Consumers
Buying & Selling
Product bought - clear agreement about article between seller & buyer in all contracts of sale.
Price paid - agreed between seller & buyer in all contracts of sale -> must be expressed as an amount of money.
If product bought transported & freight rate charged, buyer & seller decide freight rate included in price or not.
Local Price - not include freight rate.
Free on rail (FOR) - seller pays freight rate to seller’s station.
Rail charges paid - price includes freight rate.
People as Consumers
Quality of Goods
Consumers should insist on high quality products.
Can benefit many other consumers -> refuse to buy low quality or resource wasting products or complain to producers that are not satisfactory.
Value of Products and services should = values of community -> should complain about products or services that go against values.
Producers who care about consumers’ needs want to know what not satisfied -> Complaints prevent malpractices -> consumers be sure of facts before complaining.
People as Consumers
Production of Products & Services
Production Factors
Natural Resources - limited or scarce except crude oil & water -> SA has many natural resources -> needed to produce anything but can get resources from other countries (Japan & Taiwan do this).
Labour - physical & mental skills of workers -> need skill training & productive workers to support needs of consumers. Resources can only be effectively turned into useful items with skills and labour of workers.
Capital - Equipment & machinery needed to produce product & products produced to help produce more products -> need money to produce products.
SA economy = not viable to produce certain products -> not big enough.
Entrepreneurship - Products only produced if someone plans, organises & advises production process -> coordinates proper use of natural resources, labour & capital -> check necessary natural resources available, labours knows what to do & have enough money and machinery (capital) for production process.
People as Consumers
Consumer & Retailer
- Bring products closer to consumers
- Sell according to quantity consumers require
- Grant credit -> can delay payments
- Study interests & needs -> attend personally to & help consumers choose products
- Use advertisements to notify consumers -> new products, fashion changes, price changes -> but keep trade marked products that consumers like.
- Deliver well-known trade marked products to homes
Intrinsic Motivation
Actions executed because Inner drive -> own goals, curiosity & interests.
Wants to participate in something because find it interesting, informative & helps with self-actualising.
Don’t need external encouragement or pressure.
Eg. More satisfaction from studying than from passing exams.
Extrinsic Motivation
Participates in an activity for external reasons such as being given orders to, being rewarded or to impress or satisfy someone.
Has no enthusiasm & has to constantly driven to carry out activities.
Has no initiative or creativity
Connection between intrinsic & extrinsic motivation
Extrinsic & Intrinsic motivation both important for motivational development in adolescence.
Too much extrinsic motivation can prevent students opportunity of taking responsibility for own actions & they prefer to follow than lead.
In job world motivated by salary & fringe benefits than by job satisfaction starting own business and self-actualisation.
Intrinsic motivation mainly comes from an inner drive to improve self or satisfy self.
Entrepreneurship Education - intrinsic motivation must be ultimate goal.
Can use extrinsic motivation to start motivational development & make students aware of instinctsI motivation.
Production x3
What needs to be produced
- Study needs of consumers.
- Product for consumers no for producer.
- Sell product -> process of exchange - consumer wants product & will pay for it.
How to produce
- Material needed limited
- Careful choices -> production techniques
- Production process -> efficient but also economical -> cost of production & prices consumers pay must balance.
For whom to produce
Directed at specific area in market
Study potential clients’ needs -> how differ from others.
What things do they prefer.
Price over quality or quality over price?
Make cheaper -> sacrifice quality.
Factors that Influence Profit x8
Kind of business - How much profit entrepreneur want to earn depends on business he owns & how greats consumers’ needs are for business’ products or services. Eg. English schools always in demand can afford to lower profit.
The element of risk - Degree of uncertainty differs from business to business -> greater uncertainty = higher expected profit & loss & lower uncertainty = lower expected profit & loss -> well-established businesses = less uncertainty.
Competence of Entrepreneur - Businesses that offer same products & services differ because of how competently & efficiently business is run including how well production factors are organised & managed.
Turnover & market size - Size of market place is big = business can lower profit on each product produced -> helps entrepreneur in long run -> increases turnover -> increases total profit.
High turnover = Lower prices.
New production techniques - Used by businesses motivated by competition & desire to make most amount of profit possible -> When new techniques executed = greatly increase profit. Old techniques = not much profit.
Business Cycles - When economy grows = profits generally high
When depression = more losses than profits
->value of products increases & decreases quicker than cost to make them.
Rise in unforeseen costs - irrecoverable debts, accidents, dated equipment & drop in demand & strikes -> big influence on profit.
Competition & price wars - unfair competition & price wars -> businesses close or have to lower prices.
