Prelim Flashcards
Methods to measure customer service
sales/ profit levels - if sales are high suggests happy customers
customer feedback - business could ask customers to fill out a survey or an interview
employee motivation levels - if employees are happy and not dealing with complaints they are more likely to be productive
level of staff turnover - staff are less likely to leave if business has good service and happy customers
Importance of customer service
increase customer loyalty this means they will make more purchases in the future
gives the business a good reputation and helps maximise sales and profits
helps increase market share
Sectors of economy
Private - Businesses that are owned by individuals, aim to make a profit. Sole traders, partnerships, private limited companies
Public - Owned by the government on behalf of the taxpayer, aims to provide a service. Schools and hospitals
Third - Non profit making organisations, aims to help people in need. Charities, voluntary organisations, social enterprises
Private sector objectives
profit - make as much money as possible
social responsibility - improve public image
customer satisfaction - ensuring customers are
satisfied with business
market share - increases number of customers it has
Features of a sole trader
owned and controlled by one person
- cheap and easy to set up
- owner makes all the decisions and has complete control of the business
- owner can choose their hours of work and holidays
- the owner keeps all the profits
- it can be difficult to raise finance to start the business
- the sole trader has unlimited liability meaning that if they go into debt they lose their own property
- difficult to take time off
- no one to share decision making problems with
Features of a private limited company
-Owned by shareholders who are invited to buy shares.
-Shareholders are friends and family of the business.
- Shareholders receive a dividend
- Control is given to the board of directors
- Legal documentation has to be set up
Features of a social enterprise
can be a profit making organisation
uses its profits to help its cause
has social or environmental aims
provides community benefits
funded by grants and sponsorships
has employees and volunteers
operates in the third sector
advantages and disadvantages of private limited companies
shareholders have limited liability
control of the company is not lost to outsiders as only friends and family can buy shares
finance can be raised by selling more shares
profits are shared between more people
shares cannot be sold the the public. This means its more difficult to raise finance
more complicated to set up
stakeholders interests
owners - wants the business to make a profit
meet objectives
shareholders - want a good return on money invested want the business to make a profit
employees - want a good rate of pay want good working conditions want to be trained
banks - want loans to be repaid on time want the business to open a bank account
customers - want a high quality product want to receive good customer service want to pay a suitable price
suppliers - want to be paid on time for materials required want to receive repeat orders
local community - want jobs in the local area want business to be socially responsible
pressure groups - support and promote a specific cause
local government - want jobs in the local area want the business to invest money in the local area
national government - want low unemployment figures want tax to be paid wants the law to be followed
external factors (PESTEC)
political - anything to do with the government
economic - anything that encourages people to spend or to not spend money
social - changing values/ opinions
technological - must aim to keep up with new technology
environmental - how the natural world can effect a business
competitive - a competitor offering the same products
impact of external factors
political - if there is an increase in national minimum wage laws then businesses will see a rise in costs and possibly less profit as they will need to pay staff to abide by the new law
an increase in income tax will mean that customers will have less money to spend meaning there is less demand for goods businesses may lose customers
economical - boom in economy people have more money to spend increasing business sales
social - customers wants cam change rapidly a business may need to invest in market research
technological - businesses without online websites will lose sales
environmental - bad weather can spoil crops reducing supply
competitive - competitor can lower prices meaning the business will lose more customers
Marketing mix
product - the item that the business is selling product must be what customers want this is found out through market research
price - how much money the business charges for their product
place - the way the business makes its product available to the customer
promotion - how customers are told the product exists and how they are encouraged to purchase
market research
desk research - gathering information that already exists, secondary information
cheap to obtain
readily available at any time
may be biased
may be out of date
may not be relevant to businesses needs
field research - gathering new information, primary information
new and up to date information
specific to business needs
not available to competitors
expensive to carry out
time consuming to carry out
people may need to be trained
personal interview
involves a face to face interview
allows two way communication
researcher can encourage respondent to answer
mistakes ans misunderstandings can be dealt with
takes a lot of time and can be expensive
interviewers may need to be trained
telephone survey
a market researcher telephoning people and asking them questions
relatively inexpensive
the response is immediate
large number of people can be surveyed quickly
many people don’t like strangers calling them and asking questions
some people just hang up
