Unit 2 Business Flashcards
Product orientation
An approach to business which places the main focus of attention upon the production process and product its self
Market orientation
An approach to business which places the requirements of the consumers at the centre of the decision making process
Pros and cons or product orientation
Pros;
- unique products
- good quality
- saves money on market research
- could be widely unsuccessful and fill a gap in the market
Cons;
- unreliable, don’t know if its going to be successful/ make profit
Marketing objectives
Goals that the firm sets to allow it to achieve its corporate objectives (overall aims of the business)
Corporate objectives
Overall aims of the business
Marketing tactics
Short term marketing measures. The practical actions and techniques designed to meet the needs of the strategy
What are the 4 P’s
- product - gap in the market/USP
- price - strategies - skimming/penetration
- place - where to distribute
- promotion - above or below the line
Marketing strategy
A set of plans designed to achieve the marketing objectives of the business
Distribution channels
Route through which a product passes in moving from the producer to the consumer
5 stages of PRODUCT LIFE CYCLE
1 intro 2 growth 3 maturity 4 saturation 5 decline
4 quadrants of boston matrix
Star - high high
Cash cow - high share low growth
? - high growth low share
Dog- low low
Why is the boston matrix useful
Analysis of product portfolio and makes an informed desision of what marketing strategies need to be changed
Branding
A name/term/sign/symbol/design to identify the goods or services of a business and differentiate them from competitors
Branding strategies - individual
Individual products branded with individual names - can be developed for particular market segments (failure of one brand will have an adverse affect on another)
Branding strategies - corportate (Heinz)
When the business name is the brand name
Branding strategies - family (cadburys)
Brand name which includes a number of different products
Brand extensions (coke)
Existing brand name used for new products in the same market
Branding strategies - brand stretching (virgin)
Existing brand name has been taken to unrelated markets
Why analyse the product life cycle? (3 reasons)
- Identify points at which a business may need to consider launching a new product
- Identify where and when spending is required
- Identify when a product should no longer be for sale
- indicate profitability at each stage
- When extension strategies are required
Brand protection - patents
Right to ownership of an invention or process granted by government for a fixed period of time
Brand protection -copyright
Legal ownership of a material such as books, music and films which prevents these bring copied by anyone else
Brand protection - trade marks
Signs, symbols, logos etc that distinguish products and services of one business from those of competitors
Benefits of brand protection
- they can be used to generate income
- can license other business’ who will pay large sums of money to copy the idea legally
- or can sell to other business’ to use
Law of demand
Number of consumers willing and able to purchase a product
Price elasticity
The responsiveness of demand to changes in price
PED calculation
%change in QD/%change in P
Price inelastic (number and define)
Less than 1
change in QD is less than change in price (nessecities)u
Unitary demand
=1
Change in QD is proportional to change in P
Price elastic
More than 1
Change in QD is greater than change in P (luxury cars)
3 corners of the design mix triangle
Aesthetic
Functional
Economic
Unit cost
Total cost/units of output
Capacity utilisation
- the use a business makes or its resources
- (Current output/max possible output) x 100
Just in time
Method of stock control where firms re order stock just in time for the current stock to run out
Benefits of JIT
- increases efficiency because it prevents firms having to wait around for stock
- cuts costs as they dont need as much storage space
- frees up working capital
Drawbacks of JIT
-doesnt work for all business’ as some has unpredictable demand
Market share
(Sales/total sales in market) x 100
How big the company wants to be
Marketing mix
The elements of a business’ marketing that are designed to meet the demands of the customer
Budgets
A future plan which sets out a business’ financial targets
Stock
Can be found in 3 places in the production process
Start - raw
Middle - work in progress
End - finished product
Market position
Which market segments does the company want to be in
Marketing
A way to promote/sell your product using a range of strategies and tools to attract your target audience
Marketing objectives
The goals that a firm sets to allow it to achieve its corporate objectives (overall aims of the business)
Market orientation
An approach to business which places the main requirement of the consumers at the centre of the decision making process
Product orientation
An approach to business which places the focus of attention on the product its self (production process)
Corporate objectives
Main priorities of the organisation
Marketing strategy
A set of plans designed to achieve the marketing objectives of a business
How does a business grow?
1) attract new customers
2) get customers to switch from competition
Labour productivity (calc and def)
Total output/number of employees
A measure of output per worker over a given time
market share calculation
(our sales/total sales in the market) x100
market growth calculation
(change/original)x100
Patents
right to ownership of an invention of process granted by the government for a fixed period of time
Trade marks
Signs/symbols/logos that distinguish the products or services of one company from its competitors
Copy right
legal ownership of material such as books, music and films which prevent them being copied by anyone else
price elasticity (def)
responsiveness of demand to changes in price
PED (calc)
% change in QD/% change in price
Price inelastic (number and meaning)
re order level
Quantity of stock at which you place another order
Stock
Products that can be sold to customers which can be found as raw materials, works in progress or finished goods
Lead time
Time taken for your order to come in
JIT
Method of stock control where a firm reorders stock just in time for the other stock to run out
Lean management
Philosophy that aims to produce more using less, by eliminating all forms of waste
Cell production
Divides the production line into individual teams or cells which each have a certain aspect of production
Time based management
Reduces wasted time by basing production on needs of the customers
Simultaneous engineering
Part of time based management which helps firms develop and launch new products more quickly
