Business theme 1 marketing

Business

An organisation that uses resources to provide goods to cosutomersin exchange for money, creating value and profits.

The factors for Production

1. Land - Natural resources available for production 2. Labour - The human input into the production process 3. Enterprise - Someone who organises the factors and takes the risk 4. Capital - Goods used in the supply of other products

The system of a business

Inputs —> processes —> outputs

Print advertising

A form of advertising that uses printed media such as newspapers, magazines, brochures, and posters to promote products or services.

Penetration pricing

A pricing strategy where a product is initially offered at a low price to attract customers and gain market share, often increasing the price later.

Market share

The portion of a market controlled by a particular company or product, typically expressed as a percentage of total sales in that market.

Strategic alliance

A cooperative agreement between two or more companies to pursue a set of agreed-upon objectives while remaining independent organizations, often involving the increase of market share and beating competitors

Organic growth

A method of business expansion that occurs through increasing output, customer base, or sales revenue, rather than through mergers or acquisitions.

Primary sector

The part of the economy that involves the extraction of raw materials and natural resources, such as agriculture, mining, and forestry.

Secondary sector

The part of the economy that produces finished goods and services, utilizing raw materials from the primary sector, typically including manufacturing and construction.

Tertiary sector

The part of the economy that provides services rather than goods, including retail, entertainment, and financial services.

Quaterary sector

The part of the economy focused on knowledge-based activities involving services such as information technology, research and development, financial planning, and education.

private sector

The part of the economy that is owned and operated by individuals or companies, as opposed to the public sector which is government-owned. It includes businesses that provide goods and services for profit.

Public sector

The part of the economy that is controlled by the government and provides services such as education, healthcare, and public safety. It operates for the benefit of the public rather than for profit.

Positives of a public sector

include access to essential services, job creation, funded from government

Positives of a private sector

Provides goods for individuals, Funded from profits

Unincorporated business

A business that is owned by one or more individuals but has not been registered as a corporation, meaning the owners have personal unlimited liability for the business's debts.

Incorporated business

A business that has been legally registered as a corporation, providing owners with limited liability protection and creates a difference between the business and the owner.

Sole trader

A type of unincorporated business owned and operated by a single individual, who is personally responsible for all liabilities and profits.

Positives and negatives of Sole trader

The sole trader structure allows for complete control and simplicity in management but also involves unlimited personal liability and can be limited in terms of access to capital.

Partnership

A business structure where two or more individuals share ownership, responsibilities, and profits, with varying degrees of liability.

LTD - Private limited company

A type of company that limits shareholder liability to the amount unpaid on shares they hold, allowing for private ownership and the ability to raise capital through shares.

PLC - Public limited company

A type of company whose shares can be publicly traded on stock exchanges, providing limited liability to its shareholders and access to capital from the public.

Franchising

A business model where a franchisee pays for the right to operate a business under a franchisor's name and guidance, utilizing established systems and branding.

Franchisor + Franchisee

The franchisor is the original company that owns the overall rights to the brand and business model, while the franchisee is the individual or company that pays to use that brand and operate under its established systems.

Franchisor Benefits and Drawbacks

Company experiences rapid growth, no risk of finance, wider presence, easy to control - potential damage to brand name, can be bad for reputation, need to maintain high quality

Fanchisee benefits + drawbacks

Lower risk as the formula is tested, large scale advertising without paying, joining a proven business, Reduced promotion costs - Can’t use initiative to expand, lack of control, regulated by franchisor, expensive start up + have to pay a royalty

Social enterprise

A business that’s objectives are targeting social and enviromental aims

Marketing

Targeting the product to the correct target audience using price promotion and place

Market

All the customers willing and able to buy the product

Mass Marketing

When a business sell into the largest part of the market in which there are many other products available through competitors

Niche Marketing

When a business targets a smaller more specific segment with customers having more specific needs

Market size

Total amount of all sales of similar products in a market

Price leadership

vey low cost model to compete on price

Added value

Difference between business costs and selling price

Innovation

Developing a product so it is sellable

Reliability

A product will keep doing what it is designed to do without letting down customers

Quality

How good a product is, customer service that comes with it

Convenience

Location, speed of ordering - delivery, short lead times

Dynamic market

I.e clothing, A market that is subject to rapid or continuous change

Competition

when 2 or more businesses attempt to supply goods or services to the same segment of customers

Market orientation

Business philosophy of identifying a customer need or want and maintaining it

Primary research + secondary research

Fist hand data collected for a specific research purpose - Secondary Research, data which already exists and which has been collected for a different purpose

Market segmentation

The classification of potential customers into different subgroups based on responses to marketing approaches and products.

Demand

The quantity of a good that consumers are willing and able to buy at different prices during a particular time period