1. How do I develop my product from an idea to something I could sell?
The 5P’s of Business
How do I develop my product from an idea to something I could sell?

2. Learning Objectives Nod y Wers Lesson 1 of 2 – Introducing the 5P’s
To develop an understanding of each of the 5P’s in business
To begin to apply your knowledge to a business idea
To begin to understand how you will develop the 5P’s for your own product AND how you will display this in your visual display
Planning and organisation
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Skills Demonstrated
Critical thinking and problem solving
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3. The Marketing Mix Is a phrase used to describe the combination of essential elements of a good marketing strategy.
A successful marketing mix will:
Sell a good product that satisfies a customer’s needs.
At the right price which customers are willing to pay and which makes a profit for the business.
In the right place to allow a customer to access it.
With effective promotion which informs and persuades the customer to buy.
After this slide complete task 1 in the work booklet.

4. Product
Place
Price
People
Promotion

5. The 5P’s Which do you think is the important one to start with?
Key Word
Definition
Price
The amount of money customers have to give up to acquire a product
Product
The good/service produced by a business and made available to customers
Promotion
Communication between the business and the customer, making the customer aware that the product is for sale
Place
The way in which a product is distributed – how it gets from the producer to the customer
People
The customers who will be buying the product and the staff you need to make the product.
Which do you think is the important one to start with?

6. Coming up with a product idea
On the BBC show “The Apprentice” Lord Sugar is often giving his contestants the challenge to create a new product in a very short period of time. The product idea is crucial to the success or failure of the task.
You are going to be watching a series of clips taken from an episode of The Apprentice. There are questions to answer at the end of each one.

7. Clip 1: Coming up with an initial idea
How did the boys choose their product idea?
How did the girls choose their product idea?
 e.g. clear direction from Team Leader
 e.g. Brainstorming
Boys method
Girls methods
What was good about the method?
 e.g. Positive responses from colleagues
 e.g. simple idea
What was bad about the method?
 e.g. insufficient time to pitch
 e.g. too many people talking at once
Activity 2 needs to be done as they watch the videos

8. Clip 2: seeing the prototype for the first time
What was the boys reaction to seeing their product?
What was the girls reaction to seeing their product?
 e.g. ‘awesome’
 e.g. putting on a brave face
How would you evaluate each of the product ideas?
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9. Clip 3: pitching an idea BOYS GIRLS Who did they pitch to?
What did the company think of the product?
BOYS
Who did they pitch to?
What did the company think of the product?
GIRLS

10. Clip 4: back in the board room
Boys feedback
Girls feedback
e.g. chair is too tall
e.g. clever interlocking system

11. Product.
Top Tip:
Your USP is about making people buy from you rather than from your competition. This means that there should be something different about your products than other products. You could have:
1.A unique product idea, like the Apple IPod or
2.A better service than your
competition.
Now complete the activity on USP’s
Must meet the customer needs
The look and design of the product might be important factors in consumers’ decisions about buying it.
Needs to have a feature/look that is unique.
Activity 3 needs to be done from the work sheet after this slide

12. USP A
Product
USP A B C D E F

18. The Product in your visual
display
of your product
mock version
This is a
You will usually have a prototype for your product.
It is really important that you are able to describe in detail the features and look of your product as well as how it works. The more you know about your product and can explain to others the more enterprising you will be.

19. Challenge Task
Each group will choose a product from the Enterprise bag.
You will then have 5 minutes to describe the main features of your product and it’s USP.
GOOD LUCK!
Activity 4 from the work sheet needs to be done after this slide

20. Place
Products must be available to buy at locations convenient to customers
E.g.
Shops
Internet
Catalogues
Market stalls
Examples of products you’d find at each of the locations – then complete activity 5 from the work booklet

21. What factors are involved in Price?
Consumer
willingness
to pay
Costs of
production
DETERMINING
PRICE
Profit
margin
Competition

22. Costs of Production
You need to make sure you know all the items you will need to buy in order to make your product.
Make sure you have figures that are as accurate as they can be for each of these.
When you have your total costs divide by the number you can make out of the materials to give a cost per unit.

23. Consumers willingness
to pay
Consumers will not be paying for goods that they feel are of poor quality or those that are over priced.
If your costs are too high you may not be able to sell the product.

24. Competition What are other people charging for similar products?
This is linked to knowing what a consumer will pay.
Many companies will try and price their goods just below a competitors (but only if they will still make a profit).

25. Profit margin
This is the difference between the cost of the unit and the amount of profit you will make.
You will often see it called a mark up.
A mark up will be a percentage e.g. a 100% mark up will mean you will charge double the cost of the product.

26. Discrimination Pricing Psychological Pricing
Definition
Charging different prices to different customer groups for the same item
Definition
A percentage mark up is added to unit cost of producing an item
Definition
Price is set low in order to gain market share
Discrimination Pricing
Cost Plus Pricing
Penetration Price
Definition
Price matching your nearest competitor
Definition
Price is set below cost price as a way of attracting customers
PRICING STRATEGIES
Loss Leader
Competitor Pricing
Price Skimming
Destroyer Pricing
Psychological Pricing
Definition
Price is set high, usually at launch in order to maximise profit
Definition
A strategy of sustained low prices designed to drive a competitor out of the market
These are colour coded and can be removed to be individualised to classes. The green prices are the most commonly used and the most accessible for all pupils to understand. The orange pricing strategies would not suit you lower ability pupils, while the red are those that may be understood only by MAT pupils. This slide could help them when they are pricing their product but may be removed if you do not feel that it would help your pupils. The price section is activity 6 on the work booklet.
Definition
Pricing an item to make it appear better value than it is e.g. £9.99 not £10.00

27. People Target Market Staff
This is about the type of people who will buy your product.
To work these out you need to think about:
Age
Gender
Location
Cultural issues
You need to work out how many staff you will need to make your product.
You will then be able to work out how much they will cost you in wages.
For some businesses you will not be employing staff at the start.

28. Recap on target markets
Age – children, teenagers, ‘twenty something’s’ and so on.
Gender – male or female.
Income – low, middle or high.
Location – is the business a local or national company, where is the business placed. Some businesses will also be able to have higher prices in some areas of the country e.g. in the capital city you might find the price of food and drink in cafes will be more expensive. Equally in the country if there is no competition the price may be higher.

29. Recap on target markets
Ethnicity – the ethnic origin of people may determine what they buy e.g. Afro-Caribbean, Chinese, Indian would have different eating habits and so buy different food.
Religious Groups – different religions have different ideals and laws that would affect what their customers would buy e.g. in a food shop there would need to be Kosher food if customers were Jewish.
Socio-economic group – this is about whether an individual customer is working class, middle class or upper class.
Activity 7 from the work booklet can be completed at this point.

30. Promotion Promotion serves many purposes: Increase awareness
Inform customers what a product is
Inform customers how the product will meet their needs
Persuade customers to buy
Persuade customers to buy again

31. Promoting your product
Would you have applied for this?
Discussion. At first this seems a bad advert as it won’t get many responses – but it is actually a good example of marketing as it was only those that really wanted to do it and understood the dangers would apply.

32. Types of Promotion Promotional Activity:
Match the promotional activity to the promotional definition.
Offering a free gift or the chance to enter a competition
when you purchase a product. 1 1
Personal selling
Displaying your product in an appealing way to
encourage people to buy. 2 2
Merchandising
Talking to the customer about the product and why
they should buy it. 3 3
Advertising
Also referred to as i-marketing, web-marketing,
online-marketing or e-Marketing, is the marketing of
products or services over the Internet. 4 4
Sales promotions
Communicating with customers through television,
radio, newspapers and leaflets. 5 5
Public relations
This is activity 8 on the work booklet
Getting the business in a local paper for free by
making a news story out of the business 6 6
Sponsorship
Funding a local event or team to make sure
everybody knows your businesses name. 7 7
Internet marketing

33. Methods of advertising
Advertising should be targeted using
Television: expensive and wide coverage
Radio: cheaper and smaller audience; no visual stimulus
Cinema: local audience
Newspapers and magazines: can be expensive but more specialised; if kept can be long lasting
Posters: cheaper; have impact but may be ignored; little opportunity for targeting
Leaflets: delivered to peoples homes or distributed in the street; cheap but little opportunity for targeting

34. Methods of promotion
What type of advertising would be most suitable for a small business?
Public relations
Press releases and news stories released to the press can provide cheap promotion that can be targeted by using trade press
Sponsorship of events and television programmes bring the product or business to peoples’ awareness but can be expensive
Endorsement by celebrities associates the product with the celebrity
Activity 9 in the work booklet can be completed after this slide

35. Putting this in a visual display
There should be a section for each of the 5 P’s.
You should be able to explain all of your decisions in detail.
You have a worksheet that can be used to provide guidance on the minimal information you should include.
In most businesses there would not be a template for this so you will be able to put in as much detail as you can in your final piece of work.
You will also be able to explain your decisions in your final pitch.

36. Evaluate your skills What you have learnt about the 5P’s?
Share your knowledge and discuss what you have each learnt and what you are stronger and weaker at.
As a group discuss how you could use the 5P’s in your next enterprise challenge and how to overcome your weaknesses.