Business studies

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  • Created by: Flyme03
  • Created on: 21-05-17 13:04
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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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

Preview of the front of card 3

Card 4

Front

What factors would affect the price of a product or service?

Back

Preview of the front of card 4

Card 5

Front

What are the indicators of the level of competition faced by business?

Back

Preview of the front of card 5

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