Standard Grade Business Management Unit 2.1 Slides

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Standard Grade Business Management Unit 2.1 Slides

  1. 1. Unit 2.1 How do businesses start?
  2. 2. Today’s Lesson <ul><li>The Entrepreneur </li></ul><ul><li>Famous Entrepreneurs </li></ul><ul><li>Reasons for Starting up a Business </li></ul><ul><li>Innovations & Inventors </li></ul><ul><li>Tycoons </li></ul>
  3. 3. The Entrepreneur <ul><li>What is an entrepreneur? </li></ul><ul><li>An individual who brings together the factors of production </li></ul>
  4. 4. Who is he? <ul><li>This is Bill Gates, the world’s richest man </li></ul><ul><li>What is he famous for? </li></ul><ul><li>He owns Microsoft, who created Windows for PCs </li></ul>
  5. 5. Who is he? <ul><li>This is Richard Branson, Britain’s most famous entrepreneur </li></ul><ul><li>He founded Virgin Records and has since moved into airlines, rail, cinema, phones, insurance… </li></ul>
  6. 6. Anita Roddick <ul><li>Founder and former owner of The Body Shop </li></ul>
  7. 7. Sir Tom Farmer <ul><li>One of Scotland’s richest men </li></ul><ul><li>Owns Kwik Fit, and Chairman of Hibernian FC </li></ul>
  8. 8. Roman Abramovich <ul><li>He is the second richest man in Russia </li></ul><ul><li>A billionaire who made his money in oil and aluminium </li></ul><ul><li>Now owns Chelsea FC </li></ul>
  9. 9. Reasons for starting up a business <ul><li>To make money </li></ul><ul><li>To provide a public service </li></ul><ul><li>Because they see a demand </li></ul><ul><li>Because they have an idea </li></ul><ul><li>Because they can do better </li></ul>
  10. 10. Innovators and Inventions
  11. 11. Tycoon <ul><li>John Paul Getty (1892-1976) was an oil baron . </li></ul><ul><li>He was at one time the richest man in the world. </li></ul><ul><li>He was successful in business yet assembled a huge art collection which became a museum in 1974. </li></ul>
  12. 12. Today’s Lesson <ul><li>The Marketplace </li></ul><ul><li>Buyers </li></ul><ul><li>Sellers </li></ul><ul><li>Customers & Consumers </li></ul>
  13. 13. The Marketplace <ul><li>The Marketplace brings together both buyers and sellers </li></ul><ul><li>A stall </li></ul><ul><li>Corner shop </li></ul><ul><li>Auction </li></ul><ul><li>Mail order </li></ul><ul><li>Internet </li></ul>
  14. 14. Buyers <ul><li>Buyers use money to get goods and services </li></ul><ul><li>Buyers can also be from the industrial market </li></ul>
  15. 15. Sellers <ul><li>Sellers offer goods and services for money </li></ul>
  16. 16. Customers and Consumers <ul><li>What is the difference between customers and consumers? </li></ul><ul><li>Customers buy the product; consumers use the product </li></ul><ul><li>Consumers are called end-users of the product </li></ul>
  17. 17. Today’s Lesson <ul><li>What is marketing? </li></ul><ul><li>Product v Market Orientation </li></ul><ul><li>Introduction to the Marketing Mix </li></ul>
  18. 18. Marketing <ul><li>Marketing is not just about selling. </li></ul><ul><li>Marketing is knowing about and satisfying customer needs </li></ul><ul><li>For businesses to be successful and market their goods/services they have to consider: </li></ul>
  19. 19. Product v Market Orientation <ul><li>Firms which are product orientated focus on making the product/service better, in terms of quality & technical excellence </li></ul><ul><li>Firms which are market orientated focus on what the customer actually wants </li></ul>
  20. 20. The Marketing Mix <ul><li>The 4 Ps: </li></ul><ul><li>Product </li></ul><ul><li>Price </li></ul><ul><li>Place </li></ul><ul><li>Promotion </li></ul>
  21. 21. Product <ul><li>This is the good/service produced </li></ul><ul><li>Does it satisfy consumers’ needs? </li></ul><ul><li>Is it good quality? </li></ul><ul><li>Can demand be met? </li></ul>
  22. 22. Price <ul><li>The monetary value offered to consumers </li></ul><ul><li>Does the price help cover production & labour costs? </li></ul><ul><li>Is price affordable to consumers? </li></ul>
  23. 23. Place <ul><li>This is where the product/service is available to consumers </li></ul><ul><li>Shops? </li></ul><ul><li>Direct mail? </li></ul><ul><li>Online? </li></ul>
  24. 24. Promotion <ul><li>This involves letting people know about your product/service </li></ul><ul><li>Word of mouth </li></ul><ul><li>Advertising </li></ul><ul><li>Sales Promotions </li></ul><ul><li>Public Relations </li></ul>
  25. 25. Summary <ul><li>The marketing mix is: </li></ul><ul><li>Selling the right product </li></ul><ul><li>At the right price </li></ul><ul><li>At the right place </li></ul><ul><li>With the right promotional tool </li></ul>
  26. 26. Today’s Lesson <ul><li>Identify Needs </li></ul><ul><li>Market Research </li></ul><ul><li>Desk Research </li></ul><ul><li>Field Research </li></ul>
  27. 27. Identify Needs <ul><li>Before we satisfy consumer needs we need to find out what they are! </li></ul><ul><li>What do people want? </li></ul><ul><li>Research the market: Ask consumers! </li></ul>
  28. 28. Market Research <ul><li>The two main methods are: </li></ul><ul><li>Field Research </li></ul><ul><li>Desk Research </li></ul>
  29. 29. Desk Research <ul><li>Also called Secondary Information </li></ul><ul><li>Using info already at hand (Internal info) </li></ul><ul><li>Using info already published by others (External info) </li></ul>
  30. 30. Desk Research Data <ul><li>Internal Data </li></ul><ul><li>Sales figures </li></ul><ul><li>Customer records </li></ul><ul><li>Customer complaints </li></ul><ul><li>External Data </li></ul><ul><li>Government publications </li></ul><ul><li>Media </li></ul><ul><li>CD Roms, Internet </li></ul><ul><li>Trade Associations </li></ul>
  31. 31. Field Research <ul><li>Also called Primary Research </li></ul><ul><li>Gathering new info by themselves </li></ul><ul><li>Can use questionnaires, surveys or interviews to find out about what consumers want </li></ul>
  32. 32. Today’s Lesson <ul><li>Surveys & Questionnaires </li></ul><ul><li>+/- of Post </li></ul><ul><li>+/- of Phone </li></ul><ul><li>+/- of Face-to-face interviews </li></ul>
  33. 33. Methods of Conducting Surveys/Questionnaires <ul><li>By Post </li></ul><ul><li>By Telephone </li></ul><ul><li>Face-to-Face </li></ul>
  34. 34. Research by Post <ul><li>Advantages </li></ul><ul><li>Cheap </li></ul><ul><li>People can think about answers </li></ul><ul><li>people may respond rather than personal interview </li></ul><ul><li>anonymous </li></ul><ul><li>Disadvantages </li></ul><ul><li>Low response rate </li></ul><ul><li>How valid are answers? </li></ul><ul><li>Limited amount of information </li></ul>
  35. 35. Research by Phone <ul><li>Advantages </li></ul><ul><li>More flexible than by post </li></ul><ul><li>Response rate higher </li></ul><ul><li>Quick and easy </li></ul><ul><li>Disadvantages </li></ul><ul><li>Person hasn’t time to think </li></ul><ul><li>Limited info collected </li></ul><ul><li>expensive </li></ul>
  36. 36. Face-to-Face Research <ul><li>Advantages </li></ul><ul><li>Flexible & allows more control </li></ul><ul><li>Detailed info collected </li></ul><ul><li>Can use visual aids </li></ul><ul><li>Disadvantages </li></ul><ul><li>Expensive & time consuming </li></ul><ul><li>People don’t like being stopped in street </li></ul>
  37. 37. Today’s Lesson <ul><li>How products are developed </li></ul><ul><li>Stages in New Product Development </li></ul><ul><li>Prototypes </li></ul>
  38. 38. Product Development
  39. 39. Stages in NPD
  40. 40. Prototypes <ul><li>Before a new product is released, a prototype is made. </li></ul><ul><li>Prototypes are working models used to get potential customers opinions on them. There are only a few of them as it is costly to go into full production on a gamble. </li></ul>This is NASA’s Venture Star, the Space Shuttle’s replacement
  41. 41. Today’s Lesson <ul><li>Market Segmentation </li></ul><ul><li>Consumer Behaviour </li></ul>
  42. 42. Market Segmentation
  43. 43. Consumer Behaviour
  44. 44. Marketing Mix
  45. 45. Product Life Cycle
  46. 46. Branding
  47. 47. Pricing
  48. 48. Place
  49. 49. Promotion
  50. 50. Business Support <ul><li>Support is offered in the shape of money or advice </li></ul><ul><li>The Prince’s Trust </li></ul><ul><li>Local enterprise companies </li></ul><ul><li>Local government </li></ul><ul><li>Business start-up schemes </li></ul><ul><li>banks </li></ul>
  51. 51. Business Plan <ul><li>“ If we fail to plan, we plan to fail!” </li></ul><ul><li>If a business is to meet its goals and objectives it needs a business plan </li></ul><ul><li>When do we use it? </li></ul><ul><li>When starting out for the first time </li></ul><ul><li>Showing potential investors </li></ul><ul><li>When planning for expansion </li></ul>
  52. 52. Business Plan Format <ul><li>The Background </li></ul><ul><li>The Personnel </li></ul><ul><li>Business Activity </li></ul><ul><li>The Market </li></ul><ul><li>Trading Summary </li></ul><ul><li>The Proposal </li></ul>
  53. 53. Detailed Business Plan <ul><li>Business Name </li></ul><ul><li>Company Objectives </li></ul><ul><li>Location/premises </li></ul><ul><li>Management/staff </li></ul><ul><li>Description of product/service </li></ul><ul><li>Equipment </li></ul><ul><li>Marketing Plans </li></ul><ul><li>Financial position/plans </li></ul><ul><li>Production details </li></ul><ul><li>Future aims </li></ul>

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