Business Retake Unit 2-Managing a Business

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Marketing
The anticipating and satisfying of customres wants in a way that delights the consumer and also meets the needs of the organisation.
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Purposes of Marketing
Ancipating customers' wants. Satisying customers' wants in a way that delights customers. Meeting the needs of the organisation.
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Marketing Objectives
The goals of the marketing function in an organisation. Types of marketing objectives: Size, Market Positioning, Innovation/Increase in Product Range, Security and Survival.
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Product Portfolio-The Boston Matrix
A tool of a product portfolio analysis that classifies products according to the market share of the product and the rate of growth of the market in which the product is sold.
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The Boston Matrix-Stars
These are the products that have a high percentage market share in a high growth market.
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The Boston Matrix-Cash Cows
High percentage market share in a low growth market. Often exist in established markets that have reached maturity.
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The Boston Matrix-Question Marks
Low percentage market share in a high growth market. They rise a difficult problem for a firm. Competing in a competitive market.
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The Boston Matrix-Dogs
Low percentage market share and low growth market. In recession, these products are likely to be withdrawn if they become unprofitable.
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Marketing Mix-Product...Focus On Core (1)
Concentration on areas of expertise will lead to greater efficiency, as the firm will benefit from specialisation. The firm is more likely to understand the nature of its core business and is thus more likely to recognise the needs of the market.
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Marketing Mix-Product...Focus On Core (2)
Each product is likely to be produced on a much larger scale, so the firm will benefit from internal economies of scale. Consumers will trust a firms ability to deliver quality if it concentrates on a few carefully selected areas of activity.
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Marketing Mix-Product...Focus On Core (3)
Directors will be more capable of controlling an organisation with a narrow focus than one that covers many different activities. Focus on core focuses on having a narrow product range.
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Marketing Mix-Product...Product Proliferation (1)
Product Proliferation is when a business has a wide product range and isnt completely focused on certain products. Increasing the number of products will spread risks and this may help to secure the firm's future.
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Marketing Mix-Product...Product Proliferation (2)
Different products or variations of a product can appeal to different market segments, so this approach will allow a firm to increase sales. Market saturation may mean that a firm can only grow if it diversifies into different areas of activity.
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Marketing Mix-Product...Product Proliferation (3)
New products may have some connection to existing products and help sales. These may be greater scope for expansion in other product areas. Customer tastes may be changing and spreading.
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Marketing Mix-Product...Product Life Cycle (1)
The stages that a product passes through during it's lifetime-Development, Introduction, Growth, Maturity and Decline. Development-This stage will consist of generation of ideas, analysis of ideas, product development, test marketing and launch.
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Marketing Mix-Product...Product Life Cycle (2)
Introduction-New on the market, sales pick up slowly and shops arent keen to stock these new unknown products. Growth-Becomes more popular. Maturity-Make a profit. Decline-Eventually, sales will fall.
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Marketing Mix-Product...Product Life Cycle (3)
Product Extension-Extension strategies to extend the life of the product before it goes into decline. Advertising-Try to gain a new audience or remind the current audience. Price Reduction-More attractive to consumers. Adding Value-Add new features.
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Marketing Mix-Product...Product Life Cycle (4)
Extenstion strategies-Explore more and new markets eg abroad. New packaging or new brand image.
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Marketing Mix-Promotion (1)
Promotion and advertising can be informative or persuasive. Has many different purposes:Attention, Interest, Desire and Action. Attention-First step is to get the attention of the consumer and improve awareness of the name and product.
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Marketing Mix-Promotion (2)
Interest-After hearing a brand name repeatedly, consumers are more likely to trust it. The intention is to make the consumers want to find out more about the product. The choice of the media, messages & images used will be based on the target market.
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Marketing Mix-Promotion (3)
Desire-This often involves informative advertising, such as certain specifications of the product model. Desire is fuelled by imagery. Promotions will be persuasive rather than informative.
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Marketing Mix-Promotion (4)
Action-This is the final step where the consumer is in the action of purchasing the product. Point of sale displays, special offers and competition entries are popular methods of achieving this aim.
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Marketing Mix-Promotion (5)
Types of promotion:Branding, Merchandising, Sales Promotions, Direct Marketing including personal selling and Trade Fairs/Exhibitions.
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Marketing Mix-Promotion (6)
Branding-The process of differntiating a product or service from its competitors through the name, sign, symbol, design or slogan linked to that product/service. Merchandising-Attempts to persuade consumers to take action at the point of sale.
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Marketing Mix-Promotion (7)
Sales Promotions-Short-term incentives to consumers to make them buy. Direct Marketing- High labour costs have led to a decline in door to door selling however items such as houses or cars the role of the individual salesperson is still crucial.
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Marketing Mix-Promotion (8)
Trade Fairs/Exhibitions-Most are used to target other businesses. They can be used to 'network' and get to know other businesses, but more importantly they are used to demostrate products to potential customers.
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Marketing Mix-Place (1)
The place element of the marketing mix involves decisions about the location in which goods and services can be purchased. The objective of distribution is to make products available in the right place at the right time in the right quantities.
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Marketing Mix-Place (2)
Direct vs Indirect. Direct-Channel where a producer and consumer deal directly with eachother without the involvement of an intermediary. Indirect-Involves the use of an intermediary between the producer and consumer.
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Marketing Mix-Place (3)
A distribution channel moves a product from production to consumption. Retailer, Wholesaler, Distributor and Agent/Dealers are groups that operate between producers and consumers on a number of different channel levels.
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Marketing Mix-Place (4)
The functions of a distribution channel: Physical distribution- Assortment, storage, sorting, bulk buying and transportation. They can reach consumers too far away to be reached directly.
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Marketing Mix-Place (5)
Takes part of the rise away from the producer through (a) financing by holding the stock and (b) allowing the producer to make fewer deliveries. Provides information and after sales for final customers.
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Marketing Mix-Place (6)
Helps in marketing prodcuts as they may specialise in retailing expertise that the producer doesn't have. And different intermediaries can reach different market segments.
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Marketing Mix-Place (7) Retailers
Retailers-The main roles of the retailer is to serve the needs of the customer by: Convenience- a 'place' that is easily accessible to consumers. Advice-Knowledge to help the consumer reach the right buying decision.
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Marketing Mix-Place (8) Retailers
Retailers provide: Financial Assistance-Retailers often provide credit terms or accept methods of payment in a form that suits the consumers needs. After-Sale Support- For durable products, the quality of the guarantees service can be crucial.
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Marketing Mix-Place (9) Distributors
Distributors: When a business sells stuff abroad they may have no expertise or contacts, businesses then would use a distributor and often on the product it may say 'distributed in the UK by...'
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Marketing Mix-Place (10) WholeSalers
Wholesalers- The main task of wholesalers is to buy in bulk from the manufacturer (producer) and sell in smaller quantities to the retailer. Can benefit both producers and retailers.
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Marketing Mix-Place (10) WholeSalers
Producers save on storage costs as its moved on as soon as its produced and then the wholesalers store it until the consumers want it. Plus paying immediately, can help cash flow of producers. Retailers also benefit from lower delivery costs.
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Marketing Mix-Place (10) Agents
Agents-They usually negiotiate sales on behalf of the seller. They are not usually involved in ownership and they usually take commission.
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Marketing Mix-Place (10) Short or Long Channels
Factors to Consider:Amount of people they are supplying to, Amount of profit they wish to make, Complexity of product, Perishable Goods, How Specialist the product is, Whether the consumer requires detailed knowledge, Less Control and Profit.
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Marketing Mix-Price....Pricing Strategies (1)
Price Skimming-A strategy in which a high price is set to yield a high profit margin. Often used during the introduction to early adapters.
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Marketing Mix-Price....Pricing Strategies (2)
Penetration Pricing-A strategy in which low prices are set to break into a market or to achieve a sudden spurt in market share. Predator Pricing- A strategy in which a firms sets very low prices in order to drive other firms out of the market.
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Marketing Mix-Price....Pricing Tactics
Loss Leaders- A tactic in which a firm sets a low price for it's product(s) in order to encourage consumers to buy other products that provide profit for the firm. Psychological Pricing-A tactic intended to give the impresion of value eg £9.99.
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Marketing Mix-Price....Influences on the Pricing Decisions
Level of competition, The Mark Up-% add up of product, Aims/Objectives of the business, Price customers are willing to pay.
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Designgin an Effective Marketing Mix and the Influences on the Marketing Mix (1)
Influences such as Finance, Technology, Market Research and other factors can alter design of a marketing mix.
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Influences on the Marketing Mix-Finance (1)
Cash slow, if a business is suffering from cash flow problems, it may need to reduce spending on items such as promotion, as this can lead to significant expenditure before any revenue is received.
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Influences on the Marketing Mix-Finance (2)
Discounts-Is the organisation large enough to acquire raw material at discounted lower prices. Businesses usually base their promtionl decisions on cost effectiveness. Often measured by cost per thousand/ Eg cost-£60,000 reaching 60,000 people=10p.
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Influences on the Marketing Mix-Technology (1)
Technologically advanced products (iPhone) require much less effort in terms of promotion, more word of mouth advertising. Organisations database-If a business has acquired info on specific customers, it is more likely to use direct mail or internet.
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Influences on the Marketing Mix-Technology (2)
Lower costs, Advances in Technology enable organisations to produce high quality products at relatively low prices. Online selling, promote and target.
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Influences on the Marketing Mix- Market Research (1)
Level of competition, if its got a great deal of competition a business needs to differentiate its product. Availability of subsititues-Businesses must look beyond their own market and know the impact of other industries.
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Influences on the Marketing Mix- Market Research (2)
Consumer Opinions-Must satisfy the needs of the consumers so market research is required. Niche or Mass Marketing. The Market Segment-Some target marketsmay be easier to reach through certain media. Wealthy market-high price can be charged.
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Influences on the Marketing Mix- Other
Relative power of buyers and suppliers-If a firm is in a strong position to dictate terms. Quality of the promotion. Elasticity of Demand. Reputation of the business (price affects image) and Convenience of the Location.
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Marketing Mix-Market Conditions
Students should be aware of a range of markets with differing numbers of businesses and degrees of competition. They should consider how this impacts on the design of the marketing mix. Eg Monopoly, Oligopoly, Monopolistic and Perfect Competition.
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Marketing Mix-Market Conditions...Monopoly (1)
Monopoly-Where there is a single firm in a market, over 25% of the market. Eg Tesco have 32% of the grocery market. Product-Only 1 organisation, little need for new product development.
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Marketing Mix-Market Conditions...Monopoly (2)
Price-They are the price leaders/setters and take advantage of no competition by setting high prices. Promotion-High barriers of entry, promotion=informative. Once the consumer recognises the need, no alternative supplier.
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Marketing Mix-Market Conditions...Monopoly (3)
Place-Important, needs to be conviently located, once access is gained, little effort is then required to persuade customers.
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Marketing Mix-Market Conditions...Oligopoly (1)
Oligopoly-Where a very few firms dominate the market eg. 5 banks. Product- Crucial to success because product differentiation is the way in which a unique selling point can be achieved. Spent most money on research & development and market research.
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Marketing Mix-Market Conditions...Oligopoly (1)
Price-Isnt main element, price wars cause all to suffer. Promotion- IMportant, one the main ways in which product differentiation can be achieved. Place- Important as many competing and prefer easy access.
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Marketing Mix-Market Conditions...Monopolistic Competition (1)
Monopolistic Competition-Lots and lots of firms that like to compete on brand and reputation eg Fashion. Product-Vital, however vast number of competitors makes it difficult to achieve a completely distinctive product.
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Marketing Mix-Market Conditions...Monopolistic Competition (2)
Price-Firms usually accept that prices tend to be similar and use other mechanisms to compete. Promotion-Need to be price competitive, likely to limit promotional budgets, less singificant. Place-Important, transport and distribution costs.
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Marketing Mix-Market Conditions...Perfect Competition (1)
Perfect Competition-Where there are countless businesses selling the same product and very little difference in price (Eg Market Stalls).
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Marketing Mix-Market Conditions...Perfect Competition (2)
Buyers and sellers are too numerous and too small to have any degree of individual control over prices, all buyers and sellers seek to maximize their profit (income), buyers and seller can freely enter or leave the market.
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Marketing Mix-Porter's 5 Forces (1)
Because ideas about market conditions are quite theoretical, many prefer to use Porter's 5 forces to work out how competitive their industry is.
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Marketing Mix-Porter's 5 Forces (2)
Consists of:Power of Customers, Power of Suppliers, Threat of Market Entry,Intensity of Rivalry and Threat from Substitutes.
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Marketing Mix-Porter's 5 Forces (3)
Intensity of Rivalry-Competition that already exist and compete directly against you (Eg Mcdonalds and Burger King. Compete over price or product, if they are doing something different then price can be altered.
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Marketing Mix-Porter's 5 Forces (4)
Threat from Substitutes-Other industries that customers could do with their time and money eg Cinema/Bowling/Swimming. Power of Customers-Level of need, how easy is it to get elsewhere.
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Marketing Mix-Porter's 5 Forces (5)
Threat of Market Entry-Industries with high/low barriers will vary the threat of market entry. Cost of setting up will affect how easy it is to set up. Power of suppliers-Competitors in the suppliers and need affect power. Eg Gas-Have to pay.
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Other cards in this set

Card 2

Front

Ancipating customers' wants. Satisying customers' wants in a way that delights customers. Meeting the needs of the organisation.

Back

Purposes of Marketing

Card 3

Front

The goals of the marketing function in an organisation. Types of marketing objectives: Size, Market Positioning, Innovation/Increase in Product Range, Security and Survival.

Back

Preview of the back of card 3

Card 4

Front

A tool of a product portfolio analysis that classifies products according to the market share of the product and the rate of growth of the market in which the product is sold.

Back

Preview of the back of card 4

Card 5

Front

These are the products that have a high percentage market share in a high growth market.

Back

Preview of the back of card 5
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