Impact of competition on the marketing mix. (Four P's)
Price- If there is a lot of competition the firm might have to reduce the price of the product to encourage sales.Alternatively if the product is unique they could price it higher than competition.
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Place- High competition could lead to a business thinking of new ways to distribute or they might just want to increase their distribution network to include more businesses to stock their product
Promotion- High competition will mean extensive use of sales promotion such as buy one get one free, This will cost the firm a lot of money, but ishould lead to increased sales.
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Why is it expensive to gain new customers rather than to keep existing ones?
It is more expensive to attract a new customer as the business would have to encourage sales perhaps through advertising and this is expensive. Also, good customer care costs less and will encourage local customers for repeat business
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What factors would affect the price of a product or service?
Season of year- Prices can rise at certain times of the year. Stock-If you have excess stock you might reduce the price in order to encourage sales. Cost of production- Costs need to be covered to make a profit.
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What are the indicators of the level of competition faced by business?
Sales/ market share- A firm that has a large market share may face less competition. Number of firms- An industry that has a large number of firms means it is highly competitive.
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Impact of legislation of products.
The product must be as described- Businesses must ensure the product meets the description on the label and it weighs/ measures what they have stated it does. Quality-Business must ensure the product is of satisfactory quality.
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What are the responsibilities of an employer relating to health and safety?
Carry out risk assessments, Train staff, Hold regular fire drills, Provide employees with protective clothing, Appoint a health and safety officer.
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What is quality assurance?
Having structures in place to constantly provide high standards of product and service.
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Why would a business want a quality standard?
It improves the businesses reputation which gains them more customers. The business can charge a higher price and therefore earn a higher profit.
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What are the characteristics of an entrepreneur?
Creativity, Risk taker, Ability to motivate staff, Able to work independently.
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-SOURCES OF FINANCE-
Family/ friends- Advantage- No interest. Disadvantage- May not be able to obtain all the money needed.
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Advantages of becoming a franchise.
Easier to borrow money, They will get an already established business name/ brand which can lead to increased sales as people will know the business.
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Advantages of franchising a business.
It can make their business more well- known. Benefit from economies of scale. Can help their business to gain a better reputation. They will earn royalties annually.
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Unlimited liability-->
The debts of the business can extend to personal possessions. House/car can be used to pay debts.
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Competitor based pricing-->
A pricing policy that considers the prices which competitors are charging for the same product.
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PLC-->
Public limited company- Owned by shareholders, but controlled by board of directors. Also, members of the public can buy shares.
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Public sector-->
The sector in the economy that is controlled by the government for the benefit of the people.
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Mission statement-
Motivates staff, It gives the business an aim to work towards, Gives the business a sense of direction, To set objectives and targets, Tells the customer what the business is about.
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Changing trend across the types of production-->
De- industrialisation- Manufactured goods can be imported more cheaply than they can be at home. Increased technology in manufacturing industries requires fewer workers.
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Types of production:
Primary: Extraction of raw materials from land or sea. Secondary: Conversion of raw materials to finished goods. Tertiary: Providing a service eg, banking.
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Random sampling:
Selects the sample at random which means that everyone has an equal chance of being selected.
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Quota sampling:
Selects the target market according to the percentage breakdown of that market and will then ask the specific people.
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Methods of sales promotion:
Special offers- Any offer when the customer feels they are getting a bargain can lead to increased sales
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Other cards in this set
Card 2
Front
Place- High competition could lead to a business thinking of new ways to distribute or they might just want to increase their distribution network to include more businesses to stock their product
Back
Promotion- High competition will mean extensive use of sales promotion such as buy one get one free, This will cost the firm a lot of money, but ishould lead to increased sales.
Card 3
Front
Why is it expensive to gain new customers rather than to keep existing ones?
Back
Card 4
Front
What factors would affect the price of a product or service?
Back
Card 5
Front
What are the indicators of the level of competition faced by business?
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