Bs unit 3 section 6 of 6

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Bs unit 3 section 6 of 6

  1. 1. Scholar Virtual Academy Address : No 03, Daisy Villa Avenue, Bambalapitiya, Colombo 04 Tel : (94 11) 2553466 / 2593571 Email : applicationises@scholar.lk Website : www.international-scholar.com EDEXCEL AS Business Studies REVISION by Apsara Sumanasiri© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  2. 2. AS Business Studies Unit 2 Section 1 Marketing Plan© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  3. 3. Marketing objectives & Strategy© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  4. 4. What is marketing? Marketing is the management process that is responsible for identifying, anticipating and satisfying customer requirements profitably© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  5. 5. What is marketing? Customer is KING! If firms want to survive, they must satisfy consumer wants.© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  6. 6. The role of marketing The main purpose of marketing is to increase customer demand, i.e. to shift the demand curve outwards.© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  7. 7. The role of marketing The marketing department does not work in isolation. The objectives of the marketing department must fit in with the objectives of the business.© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  8. 8. Marketing objectivesPossible marketing objectives could be:• To increase sales• To create brand loyalty• To develop the product range• To survive in the market• To change the market position• To increase Market Share© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  9. 9. What determines marketing objectivesExternal factors: Internal factors:• Customer behaviour • Market Research• Competitor Findings behaviour • Forecasted Sales• The economy • Forecasted Profits• Technology • Availability of• Government Finance• Changes in the law• Suppliers© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  10. 10. Forming a marketing strategy A marketing strategy is designed to achieve the marketing objectives. The marketing strategy should consider: • The target market • The marketing mix • The strategy of the business© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  11. 11. Mass Vs. Niche Marketing A niche market: A mass market: • Targets a very small • Appeals to the segment of a whole market market • Requires high sales • Sales will be lower, volume and low but prices will be prices higher© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  12. 12. The marketing mix The marketing mix in said to consist of the 4 key elements needed for successful marketing, often referred to as the 4 Ps.© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  13. 13. Marketing Mix * Product *© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  14. 14. The marketing Mix - Product Developing new products is time consuming and businesses will want to protect their new products and ideas (intellectual property). This can be done through: • Patents • Copyrights • Trademarks© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  15. 15. Product Life Cycle© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  16. 16. Product Life Cycle© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  17. 17. Product Life Cycle© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  18. 18. Managing a product portfolio A product portfolio refers to a range of products produced by a company or brand.A portfolio can be managed using a product life cycle approach© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  19. 19. How useful is the product life cycle?The product lifecycle is important to findthe approach on the other factors of themarketing mix, however:• It’s impossible to tell how long a product is going to last and therefore identify where on the PLC the product is.• It’s of little use to tertiary sector businesses• Less effective for firms with a large product portfolio (eg. NOKIA)• It only considers sales and profits© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  20. 20. Boston Consultancy Group Matrix© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  21. 21. Boston Consultancy Group MatrixA portfolio of products or simply put, agroup of products can be analysed usingthe Boston Matrix. This matrix categorisesthe range of products that the business hasinto one of four different types, Stars,Problem child or question mark, Cash cowand question mark.This classification is done based on twocriteria ie. Market share and marketgrowth.© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  22. 22. Boston Consultancy Group Matrix• Market share – refers to the proportion of the total industry sales that a particular product hold and thus looks at whther the product being sold has a low or high market share?• Market growth – looks at whether the numbers of potential customers in the market growing or not?© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  23. 23. Boston Consultancy Group MatrixStars are high growth productscompeting in markets where they arestrong compared with the competition.Often Stars need heavy investment inorder to sustain the market share duringgrowth. Eventually growth will slow and,assuming they keep their market share,Stars will become Cash Cows© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  24. 24. Boston Consultancy Group MatrixQuestion marks are products with lowmarket share operating in high growthmarkets. These are typically new productsin the market. Therefore, would have lowmkt share togetherwith a high potential forgrowth.. This suggests that they may needsubstantial investment to grow marketshare at the expense of larger competitors.Management have to think hard about“Question Marks” - which ones should theyinvest in to help grow? Which ones shouldthey allow to fail or shrink?© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  25. 25. Boston Consultancy Group MatrixCash cows are low-growth products with ahigh market share. These are mature,successful products, thus have a high mktsh together with less growth potential dueto the products maturity in the mkt andthus low potential to grow any futher..these products need to be managed forcontinued profit - so that they continue togenerate the strong cash flows that thecompany needs. Thus, re-investment is veryimportant.© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  26. 26. Boston Consultancy Group MatrixUnsurprisingly, the term “dogs” refers toproducts that have a low market sharein unattractive, low-growth markets.Dogs may generate enough cash tobreak-even, but they are rarely, if ever,worth investing in. Dogs are usually soldor closed.© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  27. 27. Marketing Mix * Price *© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  28. 28. Influences on price• Demand and supply• Market conditions• Production costs• Market structure• Taxes and subsidies• Business Objectives• Marketing mix© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  29. 29. Pricing strategiesShort-term pricing strategiesThese are often used for promotionalreasons• Penetration pricing• Market skimming• Discounts/Sales• Loss leader© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  30. 30. Pricing strategiesLong-term pricing strategies• Demand-based• Cost-based• Competitor-based• Psychological© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  31. 31. Price Elasticity of Demand PED shows the responsiveness of quantity demanded to a change in price. It can be calculated as:© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  32. 32. Price Elasticity of Demand PED is always negative, due to the inverse relationship between price and quantity demanded. Once the negative sign is ignored there are three possible outcomes:© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  33. 33. PED and total revenue Price increase Price decrease Demand elastic Revenue falls Revenue rises Revenue remains Revenue remains Unit elastic constant constant Demand inelastic Revenue rises Revenue falls© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  34. 34. Marketing Mix * Place *© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  35. 35. Good Luck Hope you’re doing some effective revision… Happy Revising! Apsara © 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
  36. 36. For more details and revision material contact: Scholar Virtual Academy Address : No 03, Daisy Villa Avenue, Bambalapitiya, Colombo 04 Tel : (94 11) 2553466 / 2593571 Email : applicationises@scholar.lk Website : www.international-scholar.com© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy

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