Business Competition Learning Objectives: To learn: What is meant by business competition How a business competes How a business targets its customers Learning Outcome: You will understand how business competition works and be able start applying it to the businesses you are studying. 15 th October 2008Year 11 - Business Studies

Starter WHICH ONE IS YOUR FAVOURITE? Q. When a customer decides to buy a Cadburys chocolate bar rather than one of their rivals, what must the business make efforts to do? A. Encourage R______ B_________

Who makes these brands of Cereals? 1. Coco Pops 2. Frosties 3. Shreddies 4. Weetabix 5. Cheerios 1.Kelloggs 2.Kelloggs 3.Nestle 4.Own Brand 5.Nestle/General Mills

Competition Nearly all businesses face competition from other businesses. What business wouldn’t be affected by competition? Would this be long or short lived? Definition: Competition is where a number of businesses try to sell their products to the same group of people, attempting to win their custom at the expense of their rivals. Kawasaki vs. Suzuki Who are Apples competitors?

1. Quality and status The price of a product gives a signal about the ______ and _______ 2. Availability “WHEN I WANT!” Businesses try to win customers by making sure their products/services are available where they want them. “WHERE I WANT!” Being available when customers want products or services is also important What kind of pressure can this put on smaller shops? HINT: opening times, stock space 3 WAYS TO COMPETE: Versus

3. Price Sometimes customers just want to buy the cheapest service or products available, whether it’s a phone tariff or a bag of sweets. In markets where businesses have close rivals, a business must make sure that their prices are similar to the competition. If not, what could happen? What could happen if they charged slightly lower prices?

Identifying Competitors In order to compete with it’s rivals, a business needs to identify them. This can be done by finding who offers similar PRODUCTS or BENEFITS …and by remembering that businesses can trade on LOCAL, NATIONAL and/or INTERNATIONAL levels so a business should remember that competitors can come from all over the world. HOW?

Competition & Technology Developments in technology have made markets more open to competition from a range of businesses e.g. The growth in air transport creates an international market for fruits and vegetables because they can now be transported globally by air – quickly! The growth in Information Communication Technology (ICT) has allowed the sale of products and services on the internet meaning a business in one country can compete by SELLING worldwide without having a factory or office in that country. THINKING POINT - you could have a purely virtual business, particularly where a business offers services.

Activity 1: Learning check Write the answers on your worksheets 1.In one sentence, explain why businesses need to compete Businesses need to complete because they must keep their existing customers and try to win new ones if they are to remain in business. 2. Identify 3 ways in which businesses compete for customers 1. Price 2. Quality 3. Availability 3. Complete the sentence: Businesses are able to identify their competition by examining those businesses offering the same a)._________ and the same b).________ to customers. a) Products. b) benefits. 4. Give 2 examples of technology increasing competition for business. 1. ICT developments leading to web based sales. 2. Air transport being more widely available for moving goods around the world

How does a business target it’s customers? S ome goods are aimed at all customers e.g. Staple goods. Examples… Businesses selling these don’t always have to carefully plan for who will buy their products Most products are aimed at particular consumers and the majority of purchases would be bought by the people in the Target Group. By targeting products at certain consumers, businesses can better meet their needs This way, Businesses can increase sales and gain more loyal customers Clearly identified groups of consumers are called MARKET SEGMENTS MARKET SEGMENTS

Identifying Customers Customers can be grouped in various ways... MARKET SEGMENTS AGE LIFESTYLE LOCATION INCOME GENDER HINTS: Infants, teenagers, over 80’s. Clothes, food, drinks HINTS: Socializing, holidays, celebs, civilians, outdoors or indoors. HINTS: wellies vs. Heels. Yorkshire pudding vs. haggis HINTS: Cars, or diamonds. Fashion or football HINTS: Luxury vs. Budget

Learning check 1.Complete the sentence: Businesses aim their products at clearly identified groups of consumers known as _______ _______ 2. Give one reason why businesses target their products at a particular group of customers. ACTIVITY 2 – In pairs Complete Activity 2 on the worksheets ACTIVITY 3 – Independent task Complete Activity 3 using your chosen businesses Hands up!

1. Complete the worksheet from class if you haven’t already. 2. Research how competition effects your businesses using the media. I will be checking individually next lesson, anyone without these tasks completed will be given an instant C2