prelim 14/12/22 Flashcards
measuring customer service - sales/profit levels
if they are high/improving this may suggest happy customers
measuring customer service - customer feedback
can ask customers to complete a survey or an interview
measuring customer service - employee motivation levels
if employees are happy in the workplace and are not dealing with constant customer complaints they are likely to be more productive
measuring customer service - level of staff turnover
staff are less likely to leave the organisation if the business has good service and happy customers
importance of customer service
increase customer loyalty more purchases, business gets a good reputation and helps maximise sales and profits, increase market share.
staff are more likely to leave, increased number of complaints, decrease in sales and profits.
importance of customer service
increase customer loyalty more purchases, business gets a good reputation and helps maximise sales and profits, increase market share.
staff are more likely to leave, increased number of complaints, decrease in sales and profits.
sectors of economy - private
owned by individuals and aim to make a profit such as sole traders, partnerships and private limited companies
sectors of economy - public
owned by government on behalf of the taxpayer such as schools and hospitals. aim to provide a service
sectors of economy - third
non-profit making organisations such as charities and voluntary organisations. social enterprises also operate in this sector. they aim to help people in need.
features of sole trader - ownership, control, finance
a sole trader business is owned and controlled by one person, the finance is funded by themselves, bank loans or borrowed from friends and family.
features of sole trader - advantages and disadvnatages
easy and cheap to set up, owner makes all decisions and has all control, owner can choose hours of work and holidays, owner keeps all profit.
can be difficult to raise finance to start business. unlimited liability, difficult to take time off as no one to delegate to, no one to share decision making problems with
features of private limited company - ownership, control, finance
they are owned by shareholders who are invited to buy shares normally friends and family of the business, the control is given to board of directors who manage the company, finance from bank loans or selling shares
features of private limited company - advantages and disadvantages
shareholders have limited liability as only shareholders investment is lost, control in company is not lost to outsiders as friend and family buy shares, finance can be raised by selling shares and inviting new people to buy.
profits are shared between more people, shares cannot be sold to public, complicated to setup because of documentation
social enterprise - ownership, control, finance
they focus on improving the quality of life in neighbourhoods and aim to help social or environmental problems. setup by entrepreneurs who recognise gap on market, funded by grants and sponsorships.
features of social enterprise
can be profit making, uses profits to help its cause, has employees and volunteers, operates in third/voluntary sector
stakeholders interests - owner
want the business to make a profit, meet objectives
stakeholders interests - stakeholders
want a good return on money invested, want business to make a profit
stakeholders interests - employees
want a good rate of pay, want good working conditions, want to be trained
stakeholders interests - banks
want loans repaid on time, want the business to open a bank account
stakeholders interests - customers
want high quality product, wan to receive good customer service, want to pay suitable price
stakeholders interests - suppliers
want to be paid on time for materials provided, want to receive repeat orders
stakeholders interests - local community
want jobs in local area, want businesses in the are to be socially responsible
stakeholders interests - pressure groups
support and to promote a specific cuase
stakeholders interests - local government
want jobs in local area, want business to invest money in the local area
stakeholders interests - national government
want low unemployment figures, want tax to be paid, wants the law to be followed
marketing mix - product
this is the actual item (good or service) that the business makes and sells on the market. the product must be what customers want, market research helps identify this
marketing mix - price
this is how much the business charges the customer to buy the product. the product must be a suitable price for the customer to buy
marketing mix - place
this is the way the business makes the product available to the customer and where the product is sold. place include shops, online websites and apps
marketing mix - promotion
this is how customers are told the product exists and how they are encouraged to purchase.
desk research?
gathering information that already exists. this is secondary information. they could use sales record, the internet and newspapers
field reasearch?
gathering new information. this is primary information. a business could carry out surveys, interviews and focus groups.
product development - stage 1
market research may be carried out to see what the customer wants
product development - stage 5
the method of production then needs to be chosen
product development - stage 2
ideas for the products are generate based on the market research information.
product development - stage 4
changes might then be made to the prototype based on feedback recieved.
product lifecycle - introduction
product first launched on market, low customer awareness, sales are low, no profit being made.
product lifecycle - growth
sales starting to rise, more people becoming aware of product, may start to re-coup advertising costs, profit may be made
product lifecycle - maturity
sales at higher, profit at highest, product well known, competition may be increasing
product lifecycle - decline
sales are falling, profit may not be being made, competition too strong on market as newer up to date products being released, product may be taken off market
branding advantages
business can save money once product becomes household name, high prices can be charged as brand may give off image of quality increasing profits, easy to launch new or new versions of product with same brand name, loyal customers
price factors
how much competition charge, how much the product costs to make, how much profit business want to make, the image of the product the business wants
pricing strategies - premium
prices set higher than competitors, gives image of high quality
pricing strategies - low
prices set lower than competitors, targets lower income group
pricing strategies - promotional
price is lowered for a short period of time.
pricing strategies - competitive
prices set similar to competitors, this avoids price wars and allows business to compete on different aspects sic as quality
promotional methods - coupons
when customer receives a voucher to get money off certain products or services
promotional methods - competitions
when customer purchase a product they can be entered into a competition draw to win a star prize
promotional methods - free gifts
when customers buy a product they get something free along with it
promotional methods - loyalty cards
given a card that they scan each time they purchase, points build up for customer and then they are rewarded with money off vouchers or free gifts. business can use this to track customer spending and target specific promotions to them.
ethical marketing activities?
cutting down the volume of paper used by printing fewer copies of leaflets or posters and using social media and internet instead, not being misleading in the way it presents its info in adverts, complying with discrimination laws and good business practice in its adverts by not using child labour or exploiting people, ensuring it marketing activities do not offend beliefs that different people may have
purchasing mix - quantity
any potential supplier of raw materials must be able to meet quantities required
purchasing mix - price
the lowest price for quality desired should be sought to ensure value for money
purchasing mix - location
if supplier is not close by there could be expensive delivery charges
purchasing mix - discounts
discounts should be given by supplier such as bulk buying
quality measures - quality control
products are checked at beginning or end of production process.
quality measures -quality assurance
products are checked at every production stage
quality measures -high quality raw materials
ensure materials are purchased form suppliers of high quality and have no defects
quality measures - employees
train employees to make product efficiently and recruit suitable staff with correct skills
factors affecting method of production?
the actual product being made, way the business will make sure its of high quality, finance available, resources available like staff and machinery
job production?
job production is where a single product is custom-made to a customer’s own specification. production is started only when a customer makes an order. a custom built house, wedding cakes and wedding dresses are made using job production.
batch production?
batch production is the production of groups of similar products. no item in a group goes on to the next stage until all are ready. machinery must be cleaned between each batch.
flow production?
flow production is a process in which the production of items moves continuously from one operation to the next. each part of the process contributes to the eventual production of the final product. usually machinery or robots are used to reduce labour costs. products are produced to a standard specification which mean quality is always the same.
external factors - political
anything to do with the government, at each levels the government has different powers that can influence how a business behaves. i.e. employment laws, health and safety laws
external factors - economic
anything that encourages people to spend or not spend money i.e. inflation
external factors - social
concerned with changing values, opinions and peoples beliefs. what people like/dislike changes all the time as well as lifestyle changes i.e. fashion
external factors - technological
progress in technology has a huge impact on the business, they must aim to keep up with new technology. i.e contactless payment
external factors - environemntal
how the natural world can affect a business i.e. weather
external factors - competitive
a competition may be offering the same or similar products to the business. i.e. advertising and competitors prices
social media
interact and gain feedback from customers, reach large audience, not private
job production advantages
can produce one off orders to meet needs, high prices can be charged, more motivated workers
job production disadvantages
expensive to hire highly skilled staff, expensive machinery, takes a lot of time
batch production advantages
all products identical so no quality differences, no need for highly skilled staff, machinery and robots can be used, each batch can be altered
batch production disadvantages
staff less motivated, expensive machinery, problem with one batch means whole batch wasted
flow production advantages
huge quantities can be produced, machinery work 24/7, machines and robots
flow production disadvantages
expensive machinery, individual requirements not med, repetitive
objective - profit
the aim to make as much money as possible out of the business. businesses in the private sector aim to do this.
objective - social responsibility
all businesses may wish to improve their public image by showing they are socially responsible. they may give money to good causes or spend money to avoid damaging the environment.
objective - survival
this means to continue trading and is often the first objective a business has as other objectives would be pointless if the business didn’t survive.
objective - customer satisfaction
ensuring customers are satisfied by both the products produced and service provided is essential to meet other aims such as survival and profit.
objective - market share
increase market share means the business wants to increase the number of customers it has. if a business wants to become the market leader it wants to have more customers than competitors.
objective - enterprise/innovation
continue to come up with new ideas for products and services to stay ahead of competition in order to satisfy customer wants.
personal interview
involves a face to face interview, can be held on street or by visiting homes
telephone survey
involves a market researcher telephoning people at home and asking them questions.
postal survey
involves a market researcher sending a questionnaire out through the post.
online survey
electronic/online surveys involve creating and then sending a questionnaire via email to consumers.
