Partnership

2 people/ more

ADVANTAGES

• easier to raise capital
• problems/ ideas can be discussed
• greater range of skills and expertise
• cover for holidays + sickness
• death of a partner means share needs repaying

DISADVANTAGES

• unlimited liability
• profits shared
• may be disagreements 
• decisions/ actions legally binding on all partners

Sole Trader

1 owner

• Unlimited liability (owners responsible for all debts and may have to sell personal assets)

ADVANTAGES

• easy to set up and give personal service
• owner independent
• can make quick decisions
• min of paperwork
• knows customers- help avoid bad ideas

DISADVANTAGES

• unlimited liability
• long hours, no cover for holidays/ sickness
• capital may come from savings
• need business skills
• business ends on death

two entrepreneurs!

Name of entrepreneur: Brad Deal

What is she renowned for? – Sticks and Stones Gifts

 Brad Deal is infact a father when he became successful entrepreneur; he had initiative that he saw something good and decided to go for it. He was also very clever in business and economics area as had economics degree, he was playing games with his little daughter teaching the alphabet when he though of idea, out of box so space in market, this lead to the multi-million dollar fortune. It was his family that lead him to think of his new idea, his walks with his daughter the fact she enjoyed nature and the architecture, and he with his daughter noticed find sticks/stones that resembled letters and began to take photos. He used the photos to teach his daughter slowly the pile of photos grew. However there still was no business until a Teacher of their daughter gave them a gift and they came up with idea of framing the photos to do form the teachers last name, she loved it, and the entrepreneur side of Brad kicked in. their website Sticks and Stones and gathered all the photos, framed them and placed them on their catalogue. They visited Oprah Winfrey ( host and entrepreneur) and got the unique gift delivered to eye of public, she personally was impressed and ordered one for Celebrity Actor Tom Cruise!!! The family business kicked off. Nowadays there are even ‘’sticks and stones’’ in the White House along with millions of houses, they are no millionaires and the business is forever growing. They have got 3 daughters and teach still the alphabet with sticks and stones.

Name of entrepreneur: Josephine Esther Mentzer (known as Estee Lauder)

What is she renowned for? - Cosmetic Company Estee Lauder.

Josephine was brought up in a large family which helped with getting to the network of people she needed that would help her end up being one of the most successful lady entrepreneurs known in America. Her father owned a store, so she learnt and grew up in an environment of business. She started by getting a job through her uncle who was a chemist (owned a company which sold lotions to beauty shops) selling creams. I think that she got to see how business world works as whole as how stores get their supplies (through uncle) and how they sell it to customers (through father). Also her uncle inspired her into her passion of cosmetics, to start with cream, she created her own Brand Estee Lauder and formulated her own creams. She met up with the manager of Sak’s Fifth avenue who she convinced to carry her new creams which actually sold out in 2 days I think what landed her this hit was that she was so persuasive and again like Hugh had a passion and strong belief for what she was selling. This breakthrough also increased her confidence and set out to sale every major department store in the United States, with her products. She succeeded in signing contracts with three 3 important contacts. However she than unsuccessfully tried to convince several advertising agencies to take her company on as a client. She had the initiative and decided to do her own campaign by offering free samples in the mail and free gifts with the purchase of one of her products. This was a fantastic marketing plan as nowadays many beauty and food companies use this technique. However her large hit was when she developed ‘’Estee Lauder’s Youth Dew’’ a combination of bath oil and perfume, building on this success she increased her target market to men making a line for them. Within 20 years her products were available in every major department store in more than 70 countries. She was clearly hardworking and never gave-up to get to this success infact she was hard worker till she had to stop her career at age of 86 as she unfortunately broke her hip. Estee Lauder, Inc. went public, and four years later it became the nation’s largest cosmetic company accounting for more than 50% of all retail beauty products sold across the USA. She became the only women to be on the 20 most influential business geniuses of the century, in 1988; Times Magazine. Unfortunately Estee Lauder died 6 years ago however leaving a more than successful business with revenues in excess of $6.4 Billion, and over 25000 employees. Today the Estee Lauder brand is available in over 118 countries.

What is an entrepreneur?

 SOMEONE WHO MAKES A BUSINESS IDEA HAPPEN THROUGH THEIR OWN EFFORT/ BY ORGANISING OTHERS TO DO WORK

Someone who exercises initiative by organizing a venture to take benefit of an opportunity and, as the decision maker, decides what, how, and how much of a good or service will be produced.
An entrepreneur supplies risk capital as a risk taker, and monitors and controls the business activities. According to economist Joseph Alois Schumpeter (1883-1950), entrepreneurs are not necessarily motivated by profit but regard it as a standard for measuring achievement or success. Schumpeter discovered that they (1) greatly value self-reliance, (2) strive for distinction through excellence, (3) are highly optimistic (otherwise nothing would be undertaken), and (4) always favor challenges of medium risk. 

Define the 4 stages of the business cycle and explain why they happen.

1. RECOVERY/ UPSWING

• (recovers from slump)
• production + employment increase
• consumers spend more as more confident in the security of their employment
• no major decisions are required to meet rising demand whilst spare capacity exists (use idle resources)
• as business confidence increases, firms may invest in further fixed assets (e.g. factories)
• employees find jobs more easily + wages rise

2. BOOM

• high levels of production + expenditure by firms , consumers, goverment
• lead to prosperity + confidence in business community
• investment in fixed assets rise
• can experience pressure
• skilled workers become scarce and firms offer higher wages
• shortages occur as insufficient raw materials to meet high demand
• price rise
• combination of higher wages + rise in price of raw materials --> inflation (lead to end of boom)

3. DOWNSWING

• incomes + output start to fall
• rising prices of labour + materials increase cost of production
• business lower profits
• UK government normally raise interest rates to avoid inflation
• falling profits + rising interest rates --> delays in new plans for new factories/ offices
• production can fall and amount of spare capacity raises
• some businesses fail + level of bankruptcies rise

4. SLUMP

• production at lowest
• unemployment high
• increasing numbers of firms suffer from isolvency

How does economic activity relate to GDP

GDP depends on economic activity. (e.a --> relate to level of spending and production)
rising economic activity will cause higher level of GDP

What is the business cycle and what is meant by GDP?

• Describes the regular fluctuations in economic activity.
• GDP--> Gross Domestic Product --> measures the value of a nation's output over a period of time (normally a year) 

What can a business do to improve their cash flow?

• dispose of surplus assets
• debt factoring
• proceeds from new share capital
• reduction in inventories
• Have a reliable cash flow forecasting system
• Actively manage working capital
• Choose the right sources of finance for the business needs

What is cashflow? what is the difference between Cash Inflows and Outflows?

CASH FLOW = Incomings and outgoings of cash, representing the operating activities of an organization.

IN = Money received by an organization as a result of its operating activities, investment activities, and financing activities.

OUT = Money paid out by an organization as a result of its operating activities, investment activities, and financing activities.

Why is it important for businesses to calculate the cost of production?

To manage cashflow and realise how much everything would cost

How is average cost calculated?

(Fixed costs + Variable costs) ÷ Total output = AVERAGE COST

Opportunity costs

A benefit, profit, or value of something that must be given up in order to achieve something else. Since every resource (land, money, time, etc.) can be put to alternative uses, every action, choice, or decision has an associated opportunity cost.

TOTAL COST

DIRECT + INDIRECT = TOTAL

What are Indirect + Direct costs?

INDIRECT = An expense (e.g. advertising, computing, maintenance, security, supervision) Indirect costs are usually constant for a wide range of output

DIRECT = An expense that can be traced directly to ) a specific cost center or cost object such as a department, process, or product. Direct costs (such as for labour, material, fuel or power)

How are fixed and variable costs different? what are semi-variable costs?

Fixed =  set price contract
variable = depends on usage
Semi-variable= fixed + variable elements

How are running costs different to start up costs?

RUNNING- runs business
start up is once to START up business!

What do you understand by start-up costs? Highlight some examples

Non-recurring costs associated with setting up a business.

EXAMPLES

• accountant's fees
• legal fees
• registration charges 
• advertising
• promotional activities
• employee training

why do you think that not all businesses trial their products?

• waste of time as competitors may release product before - miss out on opportunity (opportunity costs)
• a lot money in short run
• high demand already as brand name
• there are better marketing research techniques
• multi-national use countries as test marketing

What benefits do you think there would be to trialling a product?

• good way to get product into consumer's hands
• ensure doesn't damage brand name
• more successful (sales)
• cost efficent
• customer loyalty
• know supply + deman
• control over product
• less risk
• opinion/ feedback = reinvent/ innovation
• safety/ reliable

Is product reliability the most important part of product quality?

It is one of 4 considerations - quality, function, reliability, safety

How doe a product-testing certificate help a business differeniate its products?

• Represents a high tested level of quality etc.

Outline 3 potential customer benefits of the product testing process

1. make sure product is safe
2. if it works - reliability (function)
3. quality

Why do you think that launching a new product is going to be risky, even for established businesses?

• Could damage brand name 
• failure is risky
• the forecast of sales could be wrong and ruin cashflow
• high quality + high price = decline
• loss of bran loyalty
• damage other product reputation
• lack of investment

What is the difference between product trialling and product testing?

TRIALLING -A temporary offering intended to provide market information by allowing consumers to examine, use or test a product prior to fully committing company resources to a full launch./ sell to business but only small amount see if it gets sold (trial sales) limited items/ time.


PRODUCT TESTING http://news.bbc.co.uk/1/hi/business/8414768.stm
more personal. give to consumer and ask for feedback, test every aspect.

Uncontrollable variables

Thins business cannot do anything about what they do.

• competition
• technological change
• consumerpreferences
• tax rates
• laws + legislation
• trends
• state of economy
• quantity of available material
• variable costs
• supplier costs
• goverment
• banks - rates of interest in loands
• employees- resign./ strike
• min wage
• laws on employees
• investors
• wars + terrorism

What is a market leader?

Brand, product, or firm that has the largest percentage of total sales revenue (the market share) of a market. A market leader often dominates its competitors in customer loyalty, distribution coverage, image, perceived value, price, profit, and promotional spending.

What is the difference between Barriers to entry and Barriers to exit? Give Examples

Entry
Economic, procedural, regulatory, or technological factors that obstruct or restrict entry of new firms into an  market.

• clear product differentiation
• necessitating heavy advertising expenditure to introduce new products
•  economies of scale --> necessitating heavy investment in large plants to achieve competitive pricing 
• restricted access to distribution channels
• collusion on pricing
• well established brands
• fierce competition.

Exit

 Legal restrictions placed on the right of certain industries (or on industries in certain localities) to close down their operations and redeploy their resources in more fruitful ventures. 

• loans
• debts
• owed products to consumers
• contracts with suppliers

How do you think large businesses can affect their suppliers?

• ask for lower costs
• higher demand - suppliers need more employees + machinery + raw materials
• grow larger
• ask for products quicker - stressful
• make supplier more popular

Side effect of business growing larger

• economies of scale
• larger proft
• larger market share
• expansion
• multi-national
• more employees
• more machinery
• number of input + output + outlets
• higher running costs
• more brand awarness

Monopsony power

It is a market situation in which there is only one buyer. Example of a  pure monopsony is a firm that is the only buyer of labour in an isolated town; such a firm would be able to pay lower wages to its employees than it would if other firms were present. Though cases of pure monopsony are rare, monopsonistic elements are found wherever there are many sellers and few purchasers.
U.S. Steel - anti-trust prosecution failed in 1911. 

A monopsonist has buying power in a market , this means they can exploit their bargaining power with a supplier to negotiate lower prices; reduced costs of purchasing inputs increases their potential profit margins.

Limit Pricing

Lowering prices so much that it would force any new entrants out the market, although sacrifice in short-term efficient in long-term.

Contestability

For a contestable market to exist there must be low barriers to entry and exit so that there is always the potential for new suppliers to come into a market to provide fresh competition to existing suppliers. For a perfectly contestable market, entry into and exit out of the market must be costless
The reality is that no market is perfectly contestable (there are always some “barriers to contestability”). That said it is also true that virtually every market is contestable to some degree even when it appears that the monopoly position of a dominant seller is definite.

Contestable markets and perfect competition - the differences
Contestable markets are different from perfect competitive markets. E.g. it is feasible in a contestable market for one firm to dominate the industry, have price-setting power and also for firms in a market to produce a differentiated product both of which run counter to the assumptions behind the traditional model of perfect competition.
There are three main conditions for pure market contestability:

1. Perfect information and the ability and/or the right of all suppliers to make use of the best available production technology in the market
2. The freedom to market / advertise and enter a market with a competing product
3. The absence of sunk costs – this reduces the risks of coming into a market

Brand proliferation

A brand is a name and symbol and with this symbol, ideas associated with a product:
Mercedes-Benz --> expensive German cars.
Heinz --> ketchup

Brand proliferation is when a company puts on the market a product and variants of a product under different names.

Heinz would produce the standard ketchup, the 57 brand and then a cheaper ketchup called "the Red one" and an other one called the "H ketchup", very expensive with a special bottle and so on.
Advantages: to compete with low price ketchups or very expensive ketchup while keeping your main brand intact.

Disadvantages:
the overlap of brands on market segments, positioning, price, and distribution space. You may not increase you revenues, because you are selling the other brand names but you selling less your main brand name.

Game theory

Set of concepts aimed at decision making in situations of competition and conflict under specified rules. Game theory uses games of strategy (e.g. chess) but not of chance (e.g. rolling a dice). A strategic game represents a situation where two/ more participants are faced with choices of action, by which each may gain/ lose, depending on what others choose to do or not to do. The final outcome of a game, therefore, is determined jointly by the strategies chosen by all participants. These are also situations of uncertainty because no participant knows for sure what the other participants are going to decide.

Cartel

Group of firms or nations who attempt to control price or supply of a commodity (such as oil) through mutual restraint on production. Although such collusion among sovereign countries (such as in OPEC) is grudgingly accepted, it is illegal among corporations.

Monoply

Market situation where one producer controls supply of a good/ service, and where the entry of new producers is prevented/ highly restricted. Monopolist firms (in their attempt to maximize profits) keep the price high and restrict the output, and show little/ no responsiveness to the needs of their customers.
Most governments therefore try to control monopolies by:
(1) imposing price controls
(2) taking over their ownership (called 'nationalization')
(3) by breaking them up into two or more competing firms.
 Although monopolies exist in varying degrees (due to copyrights, patents, access to materials, exclusive technologies, or unfair trade practices) almost no firm has a complete monopoly in the era of globalization.

Oligoploy

Market situation between, and much more common than, perfect competition (having many suppliers) and monopoly (having only one supplier). In oligopolistic markets, independent suppliers (few in numbers and not necessarily acting in collusion) can effectively control the supply, and thus the price, thereby creating a seller's market. They offer largely similar products, differentiated mainly by heavy advertising and promotional expenditure, and can anticipate the effect of one another's marketing strategies.  

Examples include airline, automotive, banking, and petroleum markets.

Benefits of a perfectly competitive markets for consumers.

• Lower prices for consumers
• Improvements in technology – with positive effects on production methods and costs
• A greater variety of products (giving more choice)
• A faster pace of invention and innovation
• Improvements to the quality of service for consumers
• Better information for consumers allowing people to make more informed choices

Perfect & Imperfect competition

PERFECT COMPETITION 
The theoretical free-market situation in which the following conditions are met:
(1) there are too many buyers and sellers  which are all too small to have any degree of individual control over prices
(2) all buyers and sellers seek to maximize their profit (income)
(3) buyers and seller can freely enter or leave the market
(4) all buyers and sellers have access to information regarding availability, prices, and quality of goods being traded.
Also called perfect market or pure competition.

IMPERFECT COMPETITION  

 Conditions that help cause imperfect competition include
(1) restricted flow of information on costs and prices
(2) near monopoly power of some suppliers
(3) collusion among sellers to keep prices high
(4) discrimination by sellers among buyers on the basis of their buying power.

Product extension stratergies

• Increasing the use of the product- 1980's Milk Marketing Board stressed the benefits of drinking an extra pint of milk each day. Shampoo products always advise you to rinse and wash again thereby doubling the usage rate.
• Encouraging the use of the product on more occasions - Head & Shoulders was seen by consumers as a product to use when you had dandruff, the company tried to change this perception to get people to us it all year round to prevent dandruff.
• Reducing the price- as products approach the maturity stage, firms often cut the price to maintain sales.
• Adapting the product- supermarket use this technique a lot, 'new, improved'.
• Introducing promotional offers- another technique often used by firms to keep sales high is to have competitions to boost their sales.
• Changing the image of the product- For example Vodka, which have had their image changed to appeal to a younger audience. New versions have been launched, such as vodka and mixers, and the branding and packaging has been changed.

Take-overs and Mergers

Takeover =   Assumption of control of another (usually smaller) firm through purchase of 51 percent or more of its voting shares or stock                                                            example is Cadbury by Kraft foods in 2010

 

Merger=Voluntary mixture of  2 firms on roughly equal terms into one new legal entity.  Owners of each pre-merger firm continue as owners, and the resources of the merging entities are pooled for the benefit of the new entity. If the merged entities were competitors, the merger is called horizontal integration, if they were supplier or customer of one another, it is called vertical integration.          

example of horizontal integration is Orange and T-mobile

example of vertical integration is Time Warner Incorporated ( a major cable operation) and the Turner Corporation, which produces CNN

Competition through the use of loyalty schemes

BENEFITS FOR THE CUSTOMER

• discount
• promotional offers
• larger awareness of products/ services
• basis for information exchange of what customer wants.
• customers often feel more positively about the rewarding, thanking/ treating aspects of the schemes rather than the discounts. some enjoy the 'game' of collecting points through offers to get the reward they want.
• benefit from buying power of scheme organiser to get 3rd party offers which they otherwise could not afford.

BENEFITS FOR THE COMPANY

• better knowledge of actual and potential customer value, behaviour and needs, providing a quantified, measurable basis  for determining and implementing efficient policies.
• customer knowledge for use of other parts of marketing and the company
• creating focus 
• the ability to get quick learning from launches, other trial activities and marketing activity in general
• improving pricing management and its balance with promotional activity
• allowing brand-strength to be extended and deepened through use of more target communication.

EXAMPLES ARE BOOTS, SUPERDRUG, SAINSBURYS, TESCOS


http://www.alternativeminds.co.uk/DG1.pdf  for more reading

Price wars

Market situation in which (usually two) powerful competitors try to grab hold of each other's market share by progressively reducing prices until one of them retreats, at least temporarily.

Define what you understand by each of the four p's of the marketing mix.

A planned mix of the controllable elements of a product's marketing plan the 4Ps are product, price, place, and promotion.These four elements are adjusted until the right combination is found that serves the needs of the product's customers, while generating optimum income.

PRODUCT
EXAMPLE QUESTIONS -

What does the customer want from the product/service? What needs does it satisfy?
What features does it have to meet these needs?
Are there any features you've missed out?
Are you including costly features that the customer won't actually use?
How and where will the customer use it?
What does it look like? How will customers experience it?
What size(s), color(s), and so on, should it be?
What is it to be called?
How is it branded? How is it differentiated versus your competitors?
What is the most it can cost to provide, and still be sold sufficiently profitably?

Product can be split into 2 different categories, consumer and producer products.

• Consumer products- Purchased and used by individuals / citizens for use within their homes and these products fall into 3 categories:
• Convenience products. Fast-moving consumer goods (f.m.c.gs) sold in supermarkets, such as soap, chocolate, bread, toilet paper, etc. These often carry a low profit-margin. 
• Shopping products. These are durable products which are only purchased occasionally, such as dishwashers, televisions and furniture. They often carry a very high profit-margin.
•  Speciality products. These are very expensive items that consumers often spend a large amount of time deliberating over, due to the large investment requires to purchase the product. Examples include cars and houses. The profit-margins are, again, very high.

• Purchased by businesses and are either used in the production of other products, or in the running of the business. For example, raw materials (timber, steel), machinery, delivery vehicles, and components used to make larger products (e.g. tyres and headlights for vehicles).

PRICE

What is the value of the product/ service to the buyer?
Are there established price points for products/ services in this area?
Is the customer price sensitive? Will a small decrease in price gain you extra market share?
What discounts should be offered to trade customers, or to other specific segments of your market?
How will your price compare with your competitors?

PLACE

Where do buyers look for your product or service?
If they look in a store, what kind? A specialist boutique or in a supermarket, or both? Or online? Or direct, via a catalogue?
How can you access the right distribution channels?
What do you competitors do, and how can you learn from that and/or differentiate?


PROMOTION

Where and when can you get across your marketing messages to your target market?
Will you reach your audience by advertising in the press, or on TV, or radio, or on billboards?  Through PR? On the Internet?
When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the timing of your market launch, or the timing of subsequent promotions?
How do your competitors do their promotions? And how does that influence your choice of promotional activity?

What happens to companies as they expand? What is meant by economies and dis-economies of scale?

• The company develops, turns multinational, increase in sales --> more profits, more customers, more staff, locations/ outlets rise, more well-known, more brand awareness, products more accessible.

• Economies of scale is the reduction in long-run average and marginal costs (from an increase in size of an operating unit). Economics of scale can be internal to an organization (cost reduction due to technological and management factors) or external (cost reduction due to the effect of technology in an industry). 
   
  • Increase in long-term average cost of production as the scale of operations increases beyond a certain level. This anomaly may be caused by factors such as (1) over-crowding where men and machines get in each other's way, (2) greater wastage due to lack of coordination, or (3) a mismatch between the optimum outputs of different operations. 
   

Why is the distribution of profits always a tricky decision?

Profits can be divided into two categories.

Distributed Profits-these profits are paid to shareholders or other owners, normally in the form of dividends.
Undistributed Profits-this portion of a business's profits are kept for investment in the business. Such profits maybe used to purchase new machinery/ properties.

They key issue in distributing profits is the balance between short term and long term. Distributing a high proportion of profits may keep shareholders happy in short term but might not be in the interests of those looking for a long term investment. Such shareholders want to see the company grow over a number of years and to benefit from rising share prices which in turn would increase the value of their investments.

How is profit calculated?

PROFIT = TOTAL REVENUE - TOTAL COSTS

What other financial considerations does a busines have?

• considering the possibility of having cashflow problems during the early stages of product life cycle.
• finance for promotions
• credit given to customers
• finance for new product development
• fixed costs
• variable costs
• semi-variable costs
• direct costs
• indirect costs
• opportunity costs
• overheads
• revenue = quantity sold * average selling price
• start up cosrs
• wages
• running costs
• costs for expansion
• money saved for investment

What are profits and why are these important to a business?

Profit is the surplus remaining after total costs are deducted from total revenue, and the basis on which tax is computed and dividend is paid. It is the best known measure of success in a firm.

Profit is a very important concept for any business  (particularly a start-up).  Profit is the financial return that firm aim to achieve to reflect the risk that they take. Given that most firms invest in order to make a return, the profit earned by a business can be used to measure the success of that investment. Profit is also an important signal to other providers of finance to a business; banks, suppliers and other lenders are more likely to provide finance to a business that can demonstrate that it makes a profit (or is very likely to do so in the near future) and that it can pay debts as they fall due.
Profit is also an important source of finance for a business. Retained profits are an important source of finance for any business, but especially start-up or small businesses.  The moment a product is sold for more than it cost to produce, then a profit is earned which can be reinvested.

Profit can be measured and calculated.

PROFIT = TOTAL SALES less TOTAL COSTS

The 4 p's

http://www.youtube.com/watch?v=3Y5KdCr2aog

http://www.youtube.com/watch?v=FB8JTB2TNgI&list=UUaey8K-hi8GvHnQ4MbWPGng&index=7&feature=plcp

http://www.youtube.com/watch?v=tv1w8pdEWV8&list=UUaey8K-hi8GvHnQ4MbWPGng&index=9&feature=plcp

http://www.youtube.com/watch?v=E4WHymuiJE4&list=UUaey8K-hi8GvHnQ4MbWPGng&index=10&feature=plcp

Help with market share

http://www.youtube.com/watch?v=3Y5KdCr2aog

Why do many businesses only pay careful attention to their Shareholders instead of their stakeholders?

Some consider needs of stakeholders irrelevant and often expensive to adress. They feel that improving the quality of employees lives is not the firms responsibility and unnecessary to spend money on e.g training and better conditions. They should try force the suppliers to cut prices in order to save money; pay as late as possible, to keep own money in bank for as long as possible. Firms needn't worry about the environment/ community unless law says to do so as any change in products process is an extra expense. Shareholders are the ones that actually invest money.

What are shareholders?

Shareholders relate specifically to public and private limited firms. A shareholder is able to make and contribute to business's decision.

For EACH of the stakeholder groups, how can they impact upon a business?

Customers- buy the product (give income), can affect the reputation and therefore the growth.

Governments- Could change laws or in taxes, cause chaos, effect customers and employees.

Competitors- Might take away the gap in market and further succeed.  Could take away customers and market share.

Investors- Place own money so expect profit if no profit will not invest therefore less money.

Pressure groups- Can affect the reputation and therefore customers and if dislike the policy will make you change your work ethics would could change your pricing strategies.

Employees- Put out reputation and level of services show customer satisfaction, if fell treated unethically could involve government and sue.

Suppliers- If brand not doesn't represent suppliers well can pull out or charge more.

Media- Affect how customers see brand could bring in employees.

Banks/ lending organisations - Invest money so expect money back or will not lend.


Shareholders- Source of investment and can contribute to decisions can change the business's direction.

What is a mission statement? Find some examples of mission statements for a variety of businesses.

A mission statement is a written declaration of an organization's core purpose and focus that normally remains unchanged over time. Good ones will serve as filters to separate what is important from what is not, and clearly state whichmarkets will be served and how, and  communicate a sense of intended direction to the entire organisation. A mission is something to be accomplished.

EXAMPLES

• McDonalds- To provide the fast food customer food prepared in the same high-quality manner world-wide that is tasty, reasonably-priced & delivered consistently in a low-key décor and friendly atmosphere
• Apple- Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.
• Sainsburys- Our mission is to be the consumer's first choice for food, delivering products of outstanding quality and great service at a competitive cost through working 'faster, simpler and together'
  
  

Factors that make a market more competitive

• new products
• prices changes
• similar products
• location
• tax prices
• take overs
• overheads/ distribution costs
• imperfect market
• size of a market

What is the difference between qualitative and quantitative data?

Qualitative data is one that uses opinions. Quantitative data is numerical it can be quantified and verified and is can be altered to be used in statistical manipulation. Quantitative data defineswhereas qualitative data describes.

Confidence level

A measure of reliability of findings of primary research.

What is a sample?

Small number of people/ items which is meant to represent the target population.

Why do businesses conduct market research?

To find out about the market and customers needs and wants. What do the consumers like and dislike. How much are they prepared to pay for your service/ product? What are competitors prices and market leader?

The firms would use the information to focus customers needs so to get them interested and beat competitors, to be money-efficent, to increase market share, to find good place in market, identifies areas of opportunity, gap in the market, identifies demand, any change, pricing strategies, current trends, sends message to banks and lending organisations, isp, find target market.

Define what you understand by Primary & Secondary research? Outline examples of advantages and disadvantages for each.

Primary research - Field research
Involves gathering information for the 1st time.
-generally collect by a specialist research company.

MORE ACCURATE
MORE UP TO DATE
RELIABLE
MORE SPECIFIC
NO-ONE ELSE HAS IT
EXPENSIVE

COULD BE MORE TIME CONSUMING

NOT VARIED DATA

Secondary research- Desk research

Is researching through secondary data, e,g newspapers, internet. Involves gathering and analysing data that has already been gathered, can be from within firm or obtained outside. It is better for general trends. 

COMPETITORS CAN USE IT

CAN BE BIAS

CAN BE IRRELEVANT

CAN BE NOT UP-TO-DATE

LESS RELIABLE

CHEAPER

QUICKER

EASIER TO DO

Asset-led Marketing

(wiser choice) It looks for marketing opportunities --> match to firm's own strengths , it looks at the appropriate opportunities (given firms assets) e.g brand name, expertise, range.

Adding value

Depends on benefits offered compared with price. More benefits something offers in relation to price (better value). Doesn't need to be cheap in relation to benefits it provides. To be competitive firm must at least match the value of the competitors (better value and win over customers)

Product orientation

If a business is product-led it focuses more on what it can produce/ hopes it will fit the customers requirements, this is risky as it may make a irrelevant product. However it can work if customer has a limited choice than if lucky will produce product that is wanted.

Market Orientation

If a business is market-led it bases it's decisions on the customer needs. It would constantly monitor its 'environment' see what customers want, what competitors offer and changes in current market. This would ensure  that the product/ service matches the customer's needs.
The benefit of this is customer satisfaction and its directly meeting needs and is not risky.

What impact does a large market share have on businesses and their competitors?

By having a large market share the firm, it would mean they are the market leader therefore having the most money and control which would benefit them greatly. Their volume and value of sales are higher than any competitor. Competitors would have to follow their paths,

What is the difference between a Geographical and non-geographical market?

Geographical is where you can purchase fresh.fruit or vegetables for example in a market or a high street. Firms wishing to sell these products can take a stall in market and expect buyers. It brings buyers and sellers together.

Non-geographical markets allows increase in range of products bought and sold without buyers and sellers meeting, via internet, phone or credit card. 

Stop high street dying

Mary Portas a retail expert suggest to change the perception of shopping from solely to do with shopping to  a multi-functional social figure, by bringing in 'new magnets' for example creches, gym and churches on the high street. By having 'town teams' more than just the council but giving voice to communities.

Eurozone is heading for a recession in 2012

Analysers have predicted the economies of 17 countries in the eurozone to shrink in the 1st 2 quarters of 2012. It predicted that there will just a growth of 0.1% for the whole year and there are warnings that unemployment will fall. These findings are backed up by economic data from Markit.