Thursday 10th October 2013 Mr Nicholls Year 11 Business Thursday 10th October 2013 Mr Nicholls

Objectives To further develop our understanding of key business terminology.

Today… Following my checking over of your exam papers, today we’re going to have a recap session on a couple of points – just to make sure you’re 100% clear on things. You’ll be given your exam papers to check where you need to reinforce your knowledge. Overall – not bad.

Firstly…

Extension Strategies… Extension strategies extend the life of the product before it goes into decline. Businesses use marketing techniques to improve sales.  Examples of the techniques are: Advertising – try to gain a new audience or remind the current audience Price reduction – more attractive to customers Adding value – add new features to the current product, e.g. video messaging on mobile phones Explore new markets – try selling abroad New packaging – brightening up old packaging, or subtle changes such as putting crisps in foil packets or Seventies music compilations

What is marketing? The marketing mix deals with the way in which a business uses price, product, distribution and promotion to market and sell its product. The marketing mix is often referred to as the “Four P’s” - since the most important elements of marketing are concerned with: Product - the product (or service) that the customer obtains Price - how much the customer pays for the product Place – how the product is distributed to the customer Promotion - how the customer is found and persuaded to buy the product

Basic terms… The action or business of promoting and selling products or services.

Differentiation A business could do any of several things to differentiate themselves from their competition: Giving the product/business a USP. Improving quality Branding/Advertising Packaging More Convenience More Choice Faster Delivery Lower Prices

Why will a business differentiate? Simple really – It makes the firm stand out. Increases the number of repeat purchases. Enables the firm to add value. Allows the firm to charge higher prices without the loss of demand. Makes it harder for new firms to set up in competition. So – in relation to the Amazon question – Branding gives Amazon a clearer identity and personality. This will make the firm stand out more because the internet is very competitive.

Ways of collecting quantitative data… Several ways – make sure you’re aware of at least 2 from – Questionnaires/Surveys Internet Data Past Sales Figures Competitors Sales Figures/Prices Census/Market Research Organisations Information from loyalty cards Why? Increase/Decrease prices Change targeted market Change its promotion strategy Improve the product.

Boston Matrix…why use it? Why does a business use the boston matrix? Can help balance the product portfolio The company will be able to see if it has too many products in one quadrant It will allow the company to identify and withdraw dog products It will be able to identify whether it has enough funds to support the marketing of stars and question marks. It will identify whether or not the firm will need to invest in innovation or research and development. Helps a business plan ahead.

Internal Finance/External Finance Inside the Business Outside the Business