business 3.2

Product differentiation
Making one product different from another. E.g by design, quality, packaging
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Function
How well a product works and how well it does what its supposed to do.
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Cost
Cheaper cost of production, the better, as it gives a competitive advantage.
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Appearance
Products that look/smell/feel better than competition, which makes the design a success
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Design mix
Appearance, Cost, Function
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Consequences of no stock
Bad image for business, dissatisfied customer, loss of sales revenue, customer may go to a competitor
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Raw Materials
Bought from other businesses
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Work in progress
These are the stock that have been semi-finished
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Finished goods
Products that are made and waiting to be delivered to customers
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Just in case
When stock reaches minimum level more is odered
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Advantages of stock control
Wont loose customers because they can supply goods, able to buy raw materials in bulk so its cheaper because of discounts
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Just in time
Order stock and use it immediately
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Advantages of Just in time
Reducing damage of goods
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Disadvantage of Just in time
If the stock is late the production is lost
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Quality
Achieving a minimum standard for a product/service which meets customer needs
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Quality control
Ensuring that a product meets minimum standards at the end of the production line
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Quality assurance
The quality is checked at every stage of the production line. every worker is responsible
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Disadvantage of poor quality
Potentially loose customers, have to remake the product, wasted materials, damage to brand image
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customer service
the experience a customer has when dealing with a business and how well that experience meets and exceeds customer needs and expectations
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Disadvantages of poor service
No repeat purchase, Bad 'word of mouth', decrease in sales and demand, loose potential customers
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Output
the amount produced by a business
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Productivity
Output per worker in a period of time
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How to calculate *** much is produced
total output divide number of workers
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how to increase productivity
train staff, better equipment, reduce down time , motivate employees
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supply of goods act
all products have to be satisfactory quality and fit for purpose
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trade description legislation
allows customers a guarantee on refund if the product is not fit for purpose or works as it should.
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Ways to increase cash flow
Destocking, external finance, improve cash flow from customers and increase sales revenue
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factor
financial company that will take on debt that is owed to you
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improve cash flow from customer
reduce trade credit, employ a factor
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external finance
loans
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reduce cash flow
delay paying invoice, lease rather than buy
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Other cards in this set

Card 2

Front

Function

Back

How well a product works and how well it does what its supposed to do.

Card 3

Front

Cost

Back

Preview of the front of card 3

Card 4

Front

Appearance

Back

Preview of the front of card 4

Card 5

Front

Design mix

Back

Preview of the front of card 5
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