paper 2 Flashcards
What is a private sector? examples?
What is the public sector? examples?
They are owned by a private individual eg sole traders , ASDA, John and Lewis.
They are owned by the government and aim to provide services to the public eg NHS
What are the aims and objectives of a non-profit business? examples?
business such as the red cross disperse money from donations internationally
What are limited and unlimited liabilities? give an ad and dis of both
advantage- Limited liability mean the are not responsible for the deps of the business, this means that it is a less of a finacial risk further more decisons dont have to be made by the investor so there is less stress
however share holder can lose the money that they invested into the business, this may be caused by the product not having as much sucess or demand as expected, short termisum may also affect this
Disadvantage- unlimited liabilities means that the owner and the business is seen as one under the law as a result the business debts becomes the owners debts leading to selling their houses eg sole traders further more small business are more likly to have unlimited liabities and the percentage of small business that close within the first year are 60% so it is a huge finacial risk
howerver the owner would have full control over the business and be able to mold the business the way he want and with maybe his principles or objectives such as useing recyclble material unlike share holders constant focus on profit
what are sole traders? what are the advantages and disadvantages of being one?
They are individuals who are self-employed and trade under his or her name
Freedom and control of decision making of business and The owner is entitled to all the profit made by the business as the owner doesn’t need to share it with shareholders this suggests they can decide whether he or she wants to keep the profit as savings or put it back into the business to further expand the business
however risky as no one to share the unlimited liabilities with so incase of debt the owner can’t share the debt the stress of a declining business can affect a person’s mental health further more all decisions made by the owner are stressful or overwhelming
sole trades have access to limited sources of finance as sole traders are seen as high risk this suggest they have to show constant levls of profit or they may not get the full amount
what is the difference between private limited and public limited companies?
private limited company(LTD) cant sell shares to the public, the business is usually owned by family members, making it less risky and all the share holders has to agree to sell shares
public limited company (PLC) can sell their shares to the public, so they can raise capital quicker duse to the stock exchange however the finances are made public so competitors can see how well the business is doing
what is share capital?
amount of money gained from selling shares
what is market capitalization?
total value of the shares of a business
what are dividends
A dividend is a distribution of profits by a corporation to its shareholders
what is the role of share holder and why do they invest
Shareholders invest in a company by purchasing shares, each of which represents a certain percentage of the business. In return for owning shares, members are entitled to vote on significant decisions and receive a portion of any profit generated by the business.
they are involved in finacial stupport and decision making according to their shares
what are shares
what influences share prices
corporation’s assets and profits equal to how much stock they own. Units of stock are called “shares.”
the share price is determined by the demand and if more people want to sell their shares then the demand goes down furthermore the if the overall performance of the business id high there would higher dividends so higher demand eg if belief of high future performance or a takeover
what are the mission objective and a private sector public sector sole trader public limited company
private sector -maximize profit
public sector - provide eservices for the public
sole trader - may be market penetration(enter the market) create a USP or give the product at lower prices to gain a completive advantage as most business (60%) fail within the first 3 years from the launch of their product by larger business that dominated the market further more they have low amounts of budgets and recourses to be completive
why set market objectives? what can they be, give examples?
Increasing sales volume or sales growth means increased demand over period they can do this by being innovative reducing costs taking care of customer needs to attract and gain more customer loyaty and repeat purchase
markets objectives could also be to increase market share or market size this suggests they could aim to get 10% higher market shar by next year as a result they could see how well they are doing compared to their competitiors consequently this means that they would have to focus on providing better customer service for a growing market they would have to show the customers why their product is better this can be through price or quality depending on wheather it is a luxury item or a nessesity and teir target customer
what are some external and internal influences on marketing objectives?
some of the internal factors that may influence the marketing objective may be whether the objective allies with the corporate objective this suggests that MO helps the business achieve its overall goal for example a small business may want to increase profit or gain market share, as a result, they could reduce prices to increase demand and earn higher profits furthermore the MO should be within the financial budget set for marketing this may mean the amount of retained profits or the share capital for a plc and maybe the amount of dividend a shareholder requires may determine the level at which a business may be able to grow
some external factors may include in deciding marketing objectives may be the economic state for example during a boom a business can increase prices due to customers having a higher level of disposable income ess essay for a luxury business such as Rolex however during a recession reducing the prices more than their competitors may mean they can get higher demand and market share furthermore another factor that may influence MOis new technology this suggests that a business who uses that new technology whether it s to innovate the product of the production to make it more efficient it can give a competitive advantage and may help create a USP for the business leading to an increase in demand and market share
how do you find market growth market shares and sales profit?
market growth = new market size - old / old
market share = sales /market size
sales growth = sales this year - last year / last year
what are the two things market mapping shows and how can a business make use of it (advs /dis)
marketing map shows quality and price
it can help identify gaps within the market find the closest competitors identify and apply new marketing objectives and strategies to presume customers from competitors eg new pricing strategy
difference between primary and secondary research and why is it useful (advs/dis)
the primary is data collected from surveys, questionnaires etc it may be gathered before a launch of a new product in a new region
can be expensive and time-consuming
secondary is already existing data that can be gathered from other businesses or online for cheap
name six different trends that can be shown by a graph and what is extrapolation
seasonal fluctuation, random fluctuation, upward and down wars constant etc
extrapolation is predicting the future trend using the current data and graph
how has technology helped businesses to gather and analyse data about customer needs
social media such as Facebook may have valuable information on customers such s the demographics of the customer that is interested in your product furthermore it can be used to advertise for cheap prices
search engines help gather cheap data easily
most businesses us computer software to do their marketing analysis and formatting however this can be expensive and may need skilled workers to operate which is inaccessible to smaller businesses
what are the price and income elasticity of demand?
price elasticity of demand is how much a change in price can affect the demand for a product and sales revenue for example a product that had a USP may be price elastic as customers may want it for its quality for example whereas a product with an alternative is inelastic
income elasticity of demand is how much income changes demand low income may mean less disposable income as a result customers would be attracted to cheaper products or necessities whereas high income benefits luxury items
give a definition of segment target and position
segment is to divide the market into groups eg age
income or place
target -a niche (Rolex) or mass-market (supermarkets)
position-how to LEAVE IMPRESSION OR WHAT MAKE PRODUCT BETTER TO COMPETE
give a definition of mass and nice market and why would a business target a mass or niche market
niche focus on a small number of customers eg the rich rolls Royce
mass focus on a wide range of customers eg cococla
why is positioning important after targeting a market and what influences it?
the current set of the market eg the competition the amount of market share owned by them whether it’s har to enter it due to the heavy loyalty of customers to competitors
what are the 7 different marketing mix
price place promotion product process planet people
what influences of the marketing mix
competition price/ product
type of business-place
process- customer service
why would a business choose to change its marketing mix
new technology
competition
economic changes
what is a product portfolio with examples and why is it important
A product portfolio is the complete collection of products or services that a business sells diversification
what is the Bostons matrix used for and explain each section shown for a products
star- high market share and growth
cow high market growth low market share
question mark- low market share low market growth
dog-low market share high market growth
name and explain each section of a life cycle
introduction growth maturity and decline
how can extension strategies and product development be important?
improving or redesigning can prolong the life cycle it can provide new innovative ideas for the next project
what is price skimming and price penetration
price skimming is when a product is sold for a high price due to high-quality innovative idea or use so customers are willing to pay for it
price penetration is when a product is introduced with low prices to attract customers and gain market share
advantages of digital advertisement
it’s cheaper and can make use of viral marketing and target marketing
more accessible to customer can be used to find target audience and collect data on a collective intent and advertise in that section whether it be regularly visited websited like yout
why is a multi-channel distribution
they sell their product online and in stores
this means you can reach a higher amount of customers can be reached, having an online and physical store may mean that customers can go to the physical store to check the quantity and order later when decided
why might a business choose people process and physical environment
people= services
process= technology
physical environment = aesthetics
in inventory control what is just in time, buffer stock, lead time and reorder quantity
JIT is a system where products are ordered according to the demand buffer stock is the minimum level of stock kept in case of high demand levels lead time is the time it would take the ordered good to arrive after ordering reorder quantity may depend on the forecasted demand eg during a seasonal period like Christmas
what is the value of suppliers being flexible and dependable
dependable as the company would expect the quality to their standard and providing it to the is the suppliers responsibility and bad quality can negivlt affect the business reputation
flexible as to adapt to the high demands a business may have during a seasonal period this can be don through outsourcing or preipheral workers
what are the advantages and disadvantages of peripheral workers
they are partime, temporary or 0-hour contracts it can reduce fixed causes and adapt to high demands
procrastination
adv and dis of outsourcing
it is when you use another businesses resources to do a task within their own business due to high demand whether its financing or producing a product this can reduce the need for permeant staff to reduce cost however the quality may depend upon the business outsourced to
adv and dis of mass customisation
mass customisation is producing to order this suggests that customers gain customise their products giving the business a competitive advantage and there would be less waste and can sell it for higher prices however may only work for luxury items not necessities
what are three things to look for in a supplier and why
price is important when choosing a supplier cheaper the better as there is less unite cost and more profit however this can lower the quality of the product this suggests that customer loyalty is lost and a bad reputation may impact the brand image, as a result, the business may need to find a supplier that has higher quality and cheap prices
quality due to reputation
flexibility to meet demands
how can improving motivation of employees help a business
highly motivated employees can increase productivity consequently this means that there is more labour turnover and the employees would be more allied with the goal and objectives of the business further more it means that there is more employee retention and fewer absentees, as a result, the business s would have a good reputation for working environments for employees attracting more employees giving the business a wider range of skilled workers to choose for whom can bring new innovation a ideas to the business
what do the theories of Taylor, Maslow and Herzberg say about motivation
Taylor believes money is the motivator so employees should get paid for their productivity however this may affect the quality
mallows hierarchy of needs includes self-esteem, self-actualisation (achieving goals) and social and job security etc
herbert said it was hygiene (working conditions pay etc) and motivation responsibilities and goals
how can payment methods and flexible working improve motivation
piece rate (paid for each product produced )
higher salaries
commission (bonuses )
etc are some financial ways to motivate e employees however these can affect the quality
flexible working is motivative as it provides employees with flexible working hours and pattern to balance their social life eg university
what is GDP how can change in GDP affect a business functional decision making
GDP is the total value of the goods and services in a country a growth or decrease in the economy may create a boom that can turn into recession and then slums and the recovery
boom increase in crease prices lower demands
during ressesion less lower wages low demand
how can inflation or deflation affect a business strategy?
inflation of high demand causes high prices as the demand cannot be met and vice versa this means businesses can implement high prices for their product gaining high profits due to the high levels of disposable income available to customers the economy becomes less competitive
how can exchange rates affect a business strategy?
high exchange rates suggest that the pound would have more value as a result exports are more expensive and imports are cheaper visa versa
how do fiscal policies (taxation) and monetary policies affect business
fiscal policies determine the taxes and government spending this suggests they can increase it to increase government funding s and reduce it to increase economic activity as the people would have more disposable income to spend helping business
what are open trades and protectionism what are the disadvantages and advances?
open trade is when there are imports and exports without any restrictions this means that customers can get unseasonal food imported from different countries that specialise in the product and get it for cheaper prices however there are going to be fewer jobs
this means the country can get introduced to a new economy new technology and different systems with more jobs however this may consequently mean that the country that did free trade is not willing anymore as a result lose products such as cocoa from Africa
what influences the marketing strategy of a product or market
the market may depend upon the level of competition or external factors such as social and political factors or the resources they have available
product may depend upon how well they researched an developed the product to create an innovate produce with use which gives competitive advance as the customer are more attracted to their product
explain how Ansoff’s matrix is used to decide growth strategies
market penetration means existing market and developing existing product
product development existing market new product
market development of existing products in newmarket
diversification of new products and market
what are the following economies of scale economies of scope diseconomies of scale and retrenchment
economies of scale are when the improved experience helps the business increase productivity and reduce costs per unit
economies of scope are reduced in cost due to diversification as they already have the production for the product and have brand loyalty eg Cadbury has a different type of chocolate
dis economies of scale are when production increases the cost increases as larger business are harder to manage
retrenchment includes reducing jobs output delayering etc to reduce cost could be due to low demand
what is over trading and synergy
overtrading is when a business grows beyond its capability to support the growth
synergy is merges
explain griener model of growth
example include leadership crisis control crisis or red tape
why is strategic descison making and implementing strategy difficult
the external and internal environment there is the uncertainty of natural disaster or lack of resources
there may be a miscommunication with the strategy or the organisational change cause problems in culture
planned and emergent strategy
“planned strategy” (the intended strategy which is determined by a formal strategic planning process) and “emergent strategy” (the strategy that actually happens as a business responds to changes in its external environment).
what is strategic drift
the strategy becomes less and less relevant to helping the business this may be due to a technological change to appoint where the strategy is no longer nr=esassary
