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Business Studies Educators (16 - 19) - Marketing
This section is designed as a resource for teachers and lecturers teaching Marketing at AS, A2, A
Level (AVCE) and BTEC. The resources include lesson plan/s, presentations to introduce a
topic area on PowerPoint and as a mind map and activities designed to support the lesson and
stimulate student learning. The mind maps give the big picture and are available as a graphic or
as text. Each resource can be used together or as a stand alone - for example, the activities can
be used for homework.
Marketing
Asset-led versus Market-led Marketing - Lesson Plan
Marketing - PowerPoint Presentation [145 KB]
Marketing - Mind Map
British Airways: Asset-led or Market-led? - Activity
The Benefits of e-Business and Marketing
Creative Corporate Communication
Developing a Promotional Campaign
E-Commerce
Explanation of the Internet and the WWW: How Does it Work?
Guerrilla Marketing - Lesson Plan
Guerrilla Marketing - PowerPoint Presentation - Basic version [150 KB]
Guerrilla Marketing - PowerPoint Presentation - Full version [404 KB]
Guerrilla Marketing - Mind Map
Guerrilla Marketing - Activity
Market Analysis - Lesson Plan
Market Analysis - PowerPoint Presentation [275 KB]
Market Analysis - Mind Map
Market Analysis - Activity
The Marketing Mix - Lesson Plan
The Marketing Mix - PowerPoint Presentation - Basic version [281 KB]
The Marketing Mix - PowerPoint Presentation - Full version [376 KB]
The Marketing Mix - Mind Map
The Marketing Mix - Activity
Marketing Tactics
Market Power, Competition and Regulation - Lesson Plan
Competition, Legislation and Regulation - PowerPoint Presentation [86 KB]
Competition - Mind Map
Market Power, Competition and Regulation: Anti-Competitive Behaviour - Activity
Market Research - Lesson Plan
Market Research - PowerPoint Presentation [209 KB]
Market Research - Mind Map
Market Research - Activity
Mergers, Takeovers and Product Differentiation
Mergers and Takeovers - PowerPoint Presentation [56 KB]
Pricing Policies, Quality, Adding Value and Advertising
Pricing Policies, Quality and Adding Value - PowerPoint Presentation [91 KB]
Pricing Strategies - Lesson Plan
Pricing Strategies - PowerPoint Presentation - Basic version [419 KB]
Pricing Strategies - PowerPoint Presentation - Full version [744 KB]
Pricing Strategies - Mind Map
Pricing Strategies - Activity
Principles of Online Presence
Product Portfolio Analysis - Lesson Plan
Product Portfolio Analysis - PowerPoint Presentation - Basic version [140 KB]
Product Life Cycles and the Boston Matrix - PowerPoint Presentation - Full version [316 KB]
Product Portfolio Analysis - Mind Map
Product Portfolio Analysis - Activity
Profit, Loss and Value Added - Lesson Plan
The Role of Profits and Markets - PowerPoint Presentation [257 KB]
The Role of Profits and Markets - Mind Map
Profit, Loss and Value Added: The Mobile Phone Industry - Activity
Promotion, Advertising Agencies and the Media: Promoting Biz/ed
Simple Business Web site: Development Lifecycle
Simple Business Web site: Domain Names and Hosting
Simple Business Web site: How to Create Web Pages
Simple Business Web site: Legal Obligations
Simple Business Web site: Measuring Success
Asset-led versus Market-led Marketing - Lesson Plan: 2 x 1 hour
lessons
A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal
with Asset-led versus Market-led Marketing and are relevant to the following specifications:
• AQA: Module 4, 13.1
• Edexcel: Unit 6
• OCR: Module 2874
Aim:
The lessons set out to help students to make a distinction between asset-led and market-led
business approaches. The context used is that of British Airways (BA). BA has faced a number of
challenges in the last ten years and the strategies developed have, in some respects, sought to
focus on exploiting its assets and cutting costs. In so doing, it could be argued that it has not
spent sufficient time focusing on its market. The problems experienced in the summer of 2004
with cancellations and flight delays were caused by staff shortages, something that the boss Rod
Eddington accepted had been due in part to its strategy in recent years.
The Activity is broken up into a series of tasks that lead the student through the process of
building up information, providing the tools for analysis, before posing a final task that asks
students to use their knowledge and to evaluate the extent to which BA can be described as
'asset-led'.
The Activity can be tackled in small groups, with each developing their ideas and then feeding
back to the rest of the class before getting the class as individuals to tackle the final task, or it
could be developed as a series of tasks for individuals. The final task can be treated as a written
piece for assessment or could be presented by groups with a discussion being held on the
different judgements made by each group.
Learning Objectives:
At the end of the lessons, students should understand the following:
• The difference between asset-led and market-led marketing
• The application of the two concepts to a specific case study
• An approach of researching a topic, understanding analysis and developing an
evaluative response
Resources:
• PowerPoint Presentation - Marketing [117 KB]
• Mind Map - Marketing
• Activity - British Airways: Asset-led or Market-led?
• PC and digital projector
• PCs for student research
Lesson Structure:
The Activity should take no longer than two lessons. However, the structure will depend on the
approach adopted. If the approach is to encourage individuals to work on the tasks then the
lessons will need to be punctuated by some brief teacher input before each task to help clarify
what is required.
If the group based approach is chosen then time will need to be allocated for the discussion
periods following each group's feedback and for the final presentation on the group's judgements
to be made.
The Presentation can be used at the beginning of the first lesson to introduce some of the key
principles in the subject. The tasks and the discussion can then follow.
Marketing - Mind Map
Mind Maps have been produced to introduce topics and give students an overview of key topics
being studied. The maps can be viewed as a whole page or, for those who prefer a more linear
approach, as a text version.
View larger version of the mind map.
• Asset-Led
o Strengths of the Business
 Physical Assets
 Distribution
 Manufacturing base
 Global Reach
 Intangible Assets
 Brand Name
 Image
 Personnel
 Core Competence
o Needs of Consumer + » See also: Strengths of the Business
• Market-led
o Customer at the heart
o Extensive use of market research
o Customer needs
o Customer service
o Customer servility (being a slave to the customer)
o Building relationships
 Suppliers
 Customers
BTEC Business - 3rd April 2006
The Benefits of e-Business and Marketing
A definition of marketing given by the Chartered Institute of Marketing is as follows:
Marketing is the management process responsible for identifying,
anticipating and satisfying consumer requirements profitably.
In introducing this resource, it is important that you understand the implications of this definition.
• Firstly, marketing is a process - it occurs over time and evolves.
• Secondly, it is about identifying, anticipating and satisfying consumer needs. These needs
are both real and imagined by the consumer. We need food to survive. We don't need
chocolate-covered doughnuts, however, but a business might be interested in creating this
'need'. Identifying needs is about finding out what consumers want now; anticipating needs
is about finding out what consumers might want in 2, 3, 5, 10, 20 years' time and satisfying
those needs is making sure the consumer gets what they want.
• Thirdly, it is about satisfying those needs profitably. This means that having identified the
consumer need, a product or service can be devised to meet that need. If the cost of
developing that product means that the price that consumers would have to pay is
extortionate then it is likely that it would not be profitable - consumers simply would not be
able or willing to pay the sort of price that might be necessary to bring the product or
service to market.
More and more businesses are seeing the benefits that e-business can bring. Copyright: Carl
Dwyer, from stock.xchng.
Definition
e-Business refers to any form of transaction (exchange) that uses an electronic medium to
facilitate the transaction.
The way we pay for many of the goods and services we buy these days is a world away from that
envisaged even 10 years ago! Copyright: Melodi 2, from stock.xchng.
e-Business, therefore, can include the following:
• Internet-based companies which operate wholly through the Internet to conduct their
business. Examples are eBay and Amazon.
• Companies that combine traditional business formats with information on the business
provided via the Internet, for example Ikea.
• Companies that combine traditional business formats with the opportunity of buying online.
Examples include Marks & Spencer, John Lewis, HMV, Tesco and Argos.
• Companies that collect information on customer profiles and markets and sell this
information to interested parties for example Experian and Mintel.
• Any device used to facilitate exchange such as 'Chip and Pin' technology, automatic
ticketing, electronic ticketing, credit card transactions and so on.
• Business to business (B2B) activity.
• Using the opportunities that IT presents to improve the flexibility of working patterns
The Benefits of e-Business
There are a number of benefits to e-business but in thinking about these benefits it is essential
that we make the link back to our definition of marketing in order for the benefits to be fully
understood.
The benefits can be summarised as:
• The opportunity to reduce costs of production by reducing overheads - for example, not
having a retail outlet in a busy high street location with high rents, reducing stock costs etc
• The opportunity to increase sales
• The opportunity to access new markets across the globe
• The chance to target market segments more effectively
• Provide more accurate information and improve customer service experience
• Improves the efficiency of the supply chain
• Improve employee motivation through more flexible working methods
• Allowing 24/7 access to the firm's products and services
• Provides convenience and comfort for customers
Task
Take each of the benefits above and try to think of a business that you are aware of where these
benefits would be particularly significant and where the business would or has embraced e-
Business. The business can be a small to medium sized local business to you, or a major multi-
national - it's up to you!
Let us explore some case studies of companies that use e-business strategies in different ways.
1. Saab
Saab provides opportunities for customers to see what models are available and to explore
different specifications and prices before ever visiting a showroom. Copyright: Erik Johansson,
from stock.xchng.
Follow this link to the Saab motor vehicle Web site . This link takes you to a series of pages that
allow you to input information and specifications about a Saab car. Go through the steps to build
your vehicle.
2. Amazon
Go to the Amazon.co.uk Web site. Search for a DVD or a CD of your choice - if you have an
account on Amazon it will remember you through the use of a 'cookie' - this is a method of
identifying users by packaging up information you enter initially and then sending this information
to the Web server. Whenever you access these or similar pages in the future, the server will send
information that is more personalised.
Shopping for a CD or a DVD can now be a more personalised and convenient experience - not to
mention bringing a much wider range of artists and material to your home. Copyright: Lotus
Head, stock.xchng.
Once you have put in some basic information, the future pages you are given will relate more
specifically to the sort of music or movies etc. that you like.
3. A Concert Venue
Go to the home page for the Colston Hall. This is a concert venue in Bristol (you can probably get
similar results by looking at a local concert venue near you).
e-business methods allow you to be able not only access tickets without queuing but also to
choose your seat. Copyright: Kelly O'Conner, from stock.xchng.
The page allows you to be able to view what events are coming at the Colston Hall. You may be
interested in buying a ticket, in which case the Box Office is the place to start. Not only can you
buy your ticket but also specify where you would like to sit in the auditorium!
4. easyJet
Go to the easyJet home page.
Find out about the prices and availability of flights from your nearest airport to a destination of
your choice.
5. British Airways
Look at this page from the British Airways Web site. This page explains the benefits of e-ticketing
to passengers.
The use of e-Business methods allows companies such as BA to reach customers and improve the
convenience and quality of the service they receive. Copyright: Marek Wojtal, from stock.xchng.
In addition, once you have booked your flight (which you can do online of course) you can also
manage your booking - select seats, check in online and so on.
6. HM Revenue and Customs
Her Majesty's Revenue and Customs operates an Electronic Data Interchange (EDI) service for
businesses throughout the UK to help them manage the payroll implications of tax, National
Insurance and pension payments to HM Revenue and Customs.
The software needed to be able to do this does require some initial investment but there is then a
host of information that can be transferred between the business and HM Revenue and Customs.
The service is especially useful for businesses employing large numbers of staff or who have high
staff turnover ratios.
Completing PAYE tax returns can present a major administration task for businesses, especially
large businesses with many employees. What can e-Business offer them? Copyright: Tijmen van
Dobbenburgh, stock.xchng.
e-Business and Competition
Apart from offering the benefits that we have explored here, there are also other aspects to e-
business that firms have to consider. The Internet makes information transfer far easier and as a
result, people are able to share information about goods and services and the quality of a
company - wherever they are.
Businesses like Amazon provide opportunities for customers to review all the products they sell to
help inform other customers. There are also more dedicated sites that provide information to help
consumers make decisions. Look at the following example: Tripadvisor.com.
In the relevant box, type in the name of a hotel near where you live and find out what people
have to say about this hotel.
Information exchange is having an impact on competition - no business can rest on its laurels!
Copyright: Colin Nixon, stock.xchng.
Task
Given the feedback that customers have given the hotel you chosen, explain how the business
concerned might react to the existence of such sites in relation to the definition of marketing
given at the outset.
Are there ways that the existence of such information helps businesses to create new business
opportunities?
Creative Corporate Communication
This resource is designed specifically for Unit 4 of the Edexcel BTEC qualification, 'Presenting
Business Information'.
Heineken, the fourth largest brewer in the world, announced that it was not going to advertise its
product on TV in the UK from 2006 onwards. You might be forgiven for thinking that the company
was somehow 'one can short of a six pack' for taking such a decision. Surely it is madness to not
advertise on the most obvious medium that reaches into the homes of millions of people every
year?
Image: Heineken - is their decision to not advertise on TV a good example of creative corporate
promotion? Copyright: Gyorvári Gábor
Just stop and think for a minute about the things that you associate with Heineken.
In the box below, type in a phrase that you associate with Heineken or an advert that you
can remember. Press the 'Submit' button and you will be able to get a response from us to
compare with your own.
Can't get this question to work? Then take a look at this...
If you have anything remotely similar to the comments we had, then Heineken were doing their
job.
Creative corporate communication is all about getting your message across to your customers.
What that message is might be the starting point of discussions within the firm. The message can
be communicated in many different ways.
Heineken argued that with the increase in the number of TV channels, they did not feel that they
could get their message across to their target market as effectively as they would have liked. As a
result, they evaluated their position and felt that other ways they communicate their message
were adequate and possibly more effective than running more TV adverts.
Heineken are sponsors of the Heineken European Cup in rugby union. It is also one of the
sponsors of the European Champions League (Amstel beer is one of its brands). It will therefore
get exposure on TV through this and feels that its target market are more likely to be accessed
through these sort of events rather than blanket TV adverts.
It also believes that it needs to be more creative in the way it gets its message across. In
competitive markets where there are many choices, making sure customers associate your
product with their needs is crucial.
Methods of Communicating
There are several main methods of communicating an organisation's image with its end users.
Remember that corporate identity is not just something that private sector organisations strive
for; it is also very important for many public sector organisations.
Mission Statements
Mission statements aim to encapsulate what the business is about and what it wants to be
associated and identified with. The mission statement is used not only to communicate an
external identity but to bind together staff in a common culture and identity.
Packaging
Packaging is becoming increasingly important not just to maintain quality and to protect products
but as a form of communicating messages about the company as well. Colgate, for example, now
supplies toothpaste in a small container that sits easily on bathroom shelves as opposed to the
traditional tubes (which are still available). What message does this send out?
Logos
Most organisations now have logos. The designs of these are very important. They often
communicate messages that are subtle and may rely heavily on an understanding of our
psychology. For example, having three parts of a company's name all in the same size and font
may communicate a different message to one which has the first word larger and in a different
colour to the other two. Logos are intended to ensure that the company becomes instantly
recognisable even if there is no writing or words to convey the message.
Images: Logos may contain a name but a good logo may not need any words to communicate the
company, organisation or message. Copyright: Sándor Balázs, Paul Holmes, Outrequin JC and Kay
Pat
Livery
Livery is the colour scheme adopted by a business. In many cases, the colour/s used is enough to
communicate who the company or organisation is. The company may use this colour scheme
throughout all its communications media to maintain consistency and raise awareness and
identity. What colours do you associate with Tesco, for example? How about Sainsbury's and
easyJet? What are the colours of British Airways?
Image: BA not only use corporate colours to convey their message, it is repeated throughout all
aspects of the business, from staff uniforms right through to letterheads. Copyright: Frank van
den Berg
Straplines
This seems to be a relatively new word but has rapidly entered the corporate communication
vocabulary. A strapline is a phrase or short sentence that is meant to represent the company or
create awareness in customers and end users.
The example of Heineken above is a case in point but there are others that are equally
memorable:
• 'I'm lovin' it'
• 'Try something new today'
• 'Reassuringly expensive'
The idea of using a phrase is not new - many years ago, Kellogg's used the line 'the best to you
each morning' and KitKat had 'have a break, have a KitKat' - a strapline that they still use!
Endorsements
Some businesses will associate themselves with a famous celebrity or personality to get a
message across. The celebrity has to be carefully chosen to ensure that the sort of person chosen
embodies the qualities that the firm wants to be recognised for. At the time of writing, this has
been brought sharply into focus following the news about Kate Moss, the supermodel, who was
alleged to have been photographed taking cocaine. Also, there are the problems faced by
Burberry whose image seems to have been overtaken by 'chavs' - much to their annoyance. Put
the two things together and you have the wrong message being communicated.
Image: Burberry have been hit by the chav culture hijacking its products where youngsters
embodying violence, lack of respect and anti-social behaviour have worn the famous Burberry
check. Then came the news that one of its key models was taking cocaine! Copyright: Jon Wisbey
Other Methods
The whole point of creative communication is the idea that you come up with new ideas. Some
that have been used in recent years include getting products high exposure, for example, getting
a product used on a top rated TV programme, using famous songs to help sell products
(remember the Levi ad?), sponsorship (see the Heineken example above) and having an online
presence. In addition, many companies are using so called 'viral marketing' as a means of getting
their messages across. (See the Biz/ed presentation on guerrilla marketing [369 KB].)
What is important in any attempt to communicate effectively is to balance out the costs of the
method/s against the exposure that is gained and the effect on sales. This is not always very easy
to quantify but it must be a consideration.
Clearly Heineken do not believe that the cost of putting further adverts on TV is justified and that
the benefits they are gaining from their other activities are sufficient to get the message across
that they want.
Task
In your assessment, you are required to select a corporate communication case study of your
choice. In the information above, we have tried to give you a flavour of some of the more high
profile businesses that you will be familiar with but you are free to choose any business or public
sector organisation that you wish.
1. Describe the method/s of communication that the business/organisation has chosen.
Remember to try and include the variety of communication methods outlined above.
2. Provide an analysis of the business you have chosen. Is the strategy being used successful?
How will you judge that success and if it is successful what is about the communication that
makes it so successful? (You can of course analyse it on the basis that it is not, in your
judgment, successful!)
3. Evaluate the strategies used by your business to communicate their ideas creatively. How
creative are the strategies? What other methods might they use that would improve the
communication they are giving out? (You might use the guerrilla marketing ideas here.)
You could present your ideas for the last part of the task as a presentation - you could try and
incorporate video clips, sound clips and so on in your presentation. Some references below point
you in the direction of clips that can be downloaded. If you do this, remember the copyright
restrictions that will be in place and remember to fully reference any clip that you use.
• TV Whirl
• Collection of TV adverts by an advert 'fan'
• Feature on viral advertising - from Channel 4
Developing a Promotional Campaign
Image: The Dome will be transformed into a state of the art concert venue and the whole site will
become a hub for entertainment. How will you promote this exciting new venue for London?
Copyright: www.freeimages.co.uk
This resource is designed specifically for Unit 3 of the Edexcel BTEC qualification, 'Creative Product
Promotion'.
OK - here is a real challenge to your business understanding and skills! Develop a promotional
campaign for the Millennium Dome.
You might think that this will be an impossible challenge given the negative publicity about the
Dome before, during and after the year long period that it was open in 2000.
But changing the public perception and promoting the new Dome is exactly what mobile phone
firm O2 and the Anschutz Entertainment Group (AEG) are planning to do. O2 and AEG have joined
forces to redevelop the Dome into an entertainment and leisure centre, which is due to open in
April 2007. The centre will include a 23,000 seater concert venue, bars, clubs, restaurants, a
smaller 2,000 seater music venue and a 10 screen cinema complex. The venue is expected to host
150 concerts each year and O2 and AEG promise it will be the best venue in Europe.
Quite a vision I'm sure you will agree! Your job is to plan out the promotional campaign that will
reignite public interest and the public perception of the Dome in preparation for the opening in
2007.
The data and figures used in this resource are entirely fictional and are intended for educational
purposes only - they are not based on any data that O2 and AEG might possess.
To launch a successful promotion campaign a number of stages will normally be followed through.
We will briefly outline what each stage entails and then give you a scenario on which to base your
investigation and planning.
Stage 1: What are the objectives of the campaign?
A campaign brief will be issued outlining the objectives of the campaign. These should relate to
what are called SMART targets - Specific, Measurable, Achievable, Realistic and Time related. This
ensures that there is a focus to the campaign and that all involved know exactly what they are
supposed to be doing and where they are going.
Stage 2: Who is the campaign aimed at?
This will involve identifying who the target market is going to be and this, in turn, may be related
to the market segment/s that the business is focusing on. A market segment is a group of people
with similar characteristics that may influence spending on the business's products. A market
segment might be related to gender, age grouping, occupation, leisure pursuit, lifestyle, house
type and so on. This will help to ensure that the campaign gets to the people who are most likely
to benefit from it and buy the product/service concerned.
Image: Ensuring the right groups of potential customers are targeted is a vital part of the
preparation of a successful promotional campaign. Copyright: Sara Tusar
Stage 3: What is the message?
A promotional campaign is designed to try to make customers more aware of a product, brand or
service. Getting the right message across is therefore important and as such making sure the
message is clear and unambiguous is vital. The message may determine the type of promotional
media used - TV, radio, internet and so on. In this case, the message might involve changing the
perception of the Dome - the first step is the renaming of it to become 'The O2'.
Stage 4: What is the budget?
Most promotional campaigns will have to work within a pre-determined budget. This will give
planners some idea of what they have available to spend and thus will determine the type of
promotional media used. The budget might be linked to the expected returns on the project or the
amount of investment being put in in the first place.
Stage 5: What mix will be used?
The marketing mix refers to the relative importance of price, product, promotion and place in the
marketing function. For some products and services, price might be the crucial factor in
determining the success of the product in other cases the product/service itself may be more
important. The promotional campaign therefore must ensure that it focuses on what the important
elements of the mix are. There are now other Ps that can be seen as being part of the marketing
mix - these are people, processes and packaging making 7Ps in all!
Stage 6: What is the time frame?
When the campaign is scheduled to run, for how long and the long term plans need to be
considered. In some cases, a campaign might initially run for four weeks and then be 'rested' to
return after a few months - possibly in a different format. The time of year might be relevant, and
in the case of The O2, the timeframe will be especially relevant as the development work
progresses. The opening of the new venue might be a time of fevered activity and then
subsequent campaigns might be needed as specific events take place.
Stage 7: How is the campaign evaluated?
Assessing how the campaign has gone in relation to its objectives will be essential in informing the
future direction of subsequent campaigns and learning from the experiences gained. There may
be a number of things that happened during the development of the campaign that will need to be
addressed by the team and which will help them to not only plan new campaigns more effectively
but will also help in the ongoing campaign - remember the time frame in stage 6!
Image: The message about the redevelopment of the O2 might not just be about the venue itself
but might also involve a focus on the impact on the surrounding area - the positive externalities.
Copyright: Jeroen de Boer
Your Task
You will work as a team to prepare a promotional campaign for the opening of The O2 venue in
April 2007. The campaign brief below gives you some background on which to base your plans.
The information in the brief is fictional but some of the data has been based on market statistics.
Campaign Brief
The Millennium Dome was constructed for the year 2000 celebrations. It has had a difficult
history. The initial plans were to use the Dome as a means of sparking regeneration in a deprived
area of south London and to put on an entertainment extravaganza celebrating the new
millennium. The cost of constructing the Dome escalated and there were a number of injections of
cash that aroused the hostility of the general public.
The Dome was predicted to host up to 12 million visitors but in the end only attracted 6.5 million.
The public perception of the Dome is that it is a 'white elephant' that cost the taxpayer millions
(£758 million) and is still doing so whilst plans for its redevelopment were negotiated. The
estimated cost per year since it closed its doors to the public in maintenance and security has
been £30 million.
Against this backdrop AEG and O2 are taking on a project to continue the re-development of the
area and the site. One of the biggest problems is going to be changing the public perception of the
Dome, hence the importance of renaming it The O2 and getting this name firmly established in
the public mind.
The plans for a concert venue come amidst a number of criticisms about the quality of large music
venues in the capital. Recently Queen played a concert at the Wembley Arena and its lead
guitarist, Brian May, was critical of the state of London's concert venues.
O2 and AEG have the right credentials to make this venture a success. O2 have experience in
mobile technologies as well as a database of 24 million customers in Germany, Ireland and the
UK. It has a widely recognised brand name and is also associated with other, similar high profile
brands such as Big Brother, the England rugby team and Arsenal Football Club. Its revenue in
2004-05 amounted to £6.7 billion.
AEG might be less well known as a brand but have extensive experience in entertainment
promotions. It has been involved in promoting some of the most famous names in the music
business including Sir Paul McCartney, U2, Elton John, The Eagles, Coldplay and the Stereophonics
and has also been involved in promoting the Grammy Awards and the Treasures of Tutankhamen
exhibition.
AEG have already pioneered many of its ideas through its head office of the Staples centre in Los
Angeles. This is a state of the art venue, which stages around 250 concerts, sporting events and
conventions each year.
The campaign will seek to promote awareness of this new venue and what it can offer consumers
of entertainment. It is seeking to achieve a target of 150 concerts in the first year in the main
arena which seats 23,000 with a sales target of 90% for each concert.
In addition, there is an objective of ensuring that 45% of people in the 14 - 35 age range
associate the brand O2 with the concert venue by the beginning of January 2007. The budgeted
revenues for the first year is £69 million (based on 150 concert events each selling 23,000 tickets
at an average price of £20). The total investment in the development is £2 billion and the
promotion budget is being set at £150 million.
The promotion campaign should begin in January 2006 and run at intervals through 2006 in
preparation for the first events, which are scheduled for April 2007. The year before the opening
is vital in ensuring that consumers become acquainted with this new venue and what it offers.
E-Commerce
Image: The opportunities for contacting customers have increased as technology has developed.
E-commerce is not just for selling! Copyright: Ed Tilsley
This resource is designed specifically for Unit 6 of the Edexcel BTEC qualification, 'Business
Online'.
E-commerce is business activity conducted through some electronic medium. This is becoming an
increasingly important method for business to be involved in and many businesses will have taken
the opportunity of setting up a Web site as a means of establishing a presence - electronically.
It might be that this presence is merely to provide information to customers; it could be that the
presence is part of the total presence the business has, i.e. it might have stores on the high street
as well as a method of purchasing online. In other cases, the business might be just an online
service only.
Whatever form it takes, an online presence and the opportunity to do business using technology is
increasingly important especially as business goes global. It is not just personal computers (PCs)
that are the medium through which business can trade. The development of mobile devices such
as phones and PDAs also allows businesses to be in touch with their customers 24 hours a day
wherever the customer might be.
The transmission of information and the range of services that can be provided are subsequently
much greater and this can help a business expand.
It also has risks - the competition is much greater, the speed with which customers can access
information about rival firms, prices and so on is that much more efficient and just having an
online presence is no guarantee to business success.
Types of e-commerce
There is a certain amount of jargon associated with e-commerce that it will be useful to know.
• b2c - This refers to businesses engaged in servicing consumer demand directly - this could
be a firm like Dixons, who now have an internet presence, or it could be a small village café.
b2c refers to 'business to consumer'. Even small businesses will have to think about some
element of e-commerce because they might have to think about using credit and debit card
services which use electronic means of funds transfer.
• b2b - This refers to businesses that service the requirements of other businesses. They will
be suppliers of machinery, equipment, spare parts and other services such as payroll,
insurance, banking services and maintenance.
• Clicks and mortar - These are businesses that might combine high street presence with an
internet presence. Some, like amazon.co.uk and lastminute.com, might be wholly dedicated
to an online presence only.
Considerations in developing an e-commerce strategy
Image: Setting up payment systems can be complicated - most credit card companies will make
some charge for using their services and these have to be considered along with security issues.
Copyright: Lotus Head
If a business is thinking of expanding into e-commerce there are a number of factors that it
should consider.
The first might be the need to develop a Web site for the business. This is not something that
should be entered into lightly and to be effective a great deal of thought will need to go into it.
You can get full details of this process in our pages on the principles of online presence.
Apart from the issues involved in getting an appropriate and effective Web presence, there are
many other factors to consider:
• Payment systems - How will your customers be able to pay for the goods/services they
want to buy?
• Security - How will you convince customers that buying from you online is safe and secure?
• Distribution methods - How will you get your goods to your customers - having an online
presence may reduce some overheads but delivery costs can be very high especially for
bulky items. Will you deliver internationally or just to the UK or Europe? If you do go
international, what are the implications of such methods for tax and import licence/duties?
• Maintenance and updating of the site - How will you manage the day to day running of
the site? If there are problems and the site is down it can lose you potential customers!
• After sales service - What measures are you gong to put in place to cater for after sales
service/customer queries? What happens if a customer does not like the product - this might
be highly relevant to those businesses where customers are not able to see the product
before they buy?
• Legal issues - What are the legal requirements involved in setting up e-commerce
systems? Are you aware of the range of legal provisions you will have to satisfy? What are
the rules about the use of any databases of customer details that you possess? What role
does the EU play in regulating e-commerce? What is the difference between marketing your
business by e-mail and SPAM?
Task
You are considering starting up a new business. You can use one that you might have been
working on for other units or use one of the suggestions below.
You are considering setting up purely as a Web based business and have been asked by your bank
to provide a short report outlining the costs and benefits of this business model.
The Department for Trade and Industry publish a range of guides regarding e-commerce that will
help you in preparing for the report as well as the guidelines given above.
When constructing your report ensure you meet the following:
1. State clearly the business's aims and objectives.
2. Identify the expected costs associated with using e-commerce (you are not expected to be
precise in financial terms here but to give an outline only).
3. Identify the expected benefits of using e-commerce as the basis for your business model.
4. Explain how your business will expect e-commerce to help it achieve the aims and objectives
of the business.
References
Image: Is there money to be made online from arranging travel for these fans? Copyright: Ingrid
Müller
The following Web sites might give you some further information on which to base your report:
• China 'yet to embrace e-commerce' - from the BBC
• Statistics on e-commerce - from the Office for National Statistics (ONS)
• Briefing paper on e-commerce - from the Institute of Development Studies
Suggested business ideas
• A business selling details of concerts, plays, leisure activities, clubs and pubs to young
people in the 18-35 age group. This business has tailored information depending on where
the customer lives.
• A business that searches databases from local newspapers around the country and puts car
sellers in touch with car buyers. Car buyers pay a small registration fee to join for the
duration of their search and the business takes a commission if a deal is made.
• A business selling hard to find CDs and DVDs in fringe genre music and media.
• A travel business dedicated to helping sports fans journey to sporting events more easily.
This business will make all the arrangements for you including cheap accommodation. All
you have to do is tell them where you want to go, where you are starting from and what the
event is.
Explanation of the Internet and the WWW: How Does it Work?
This resource is designed specifically for Unit 6 of the Edexcel BTEC qualification, 'Business
Online'.
Aim
The aim of this section is to generate an understanding of how the Internet works and the
difference between the Internet and the Web.
What is the Internet?
Image copyright: Carl Dwyer, stock.xchng
Very simply, the Internet is worldwide collection of computers all connected together to form a
huge network. These computers communicate with each other through a set of common software
standards known as protocols. These protocols allow the sending and receiving of emails; viewing
of Web pages; the transfer of files between one computer and another; instant messaging with
other users, etc.
In order for these protocols to work there must be a way of identifying each machine connected to
the Internet. Each machine connected to the Internet has an address known as an Internet
Protocol address (IP address). The IP address takes the form of a series of four numbers
separated by dots, for example: 123.45.67.890
With this in mind, what happens when you type a Web page address into your Web browser?
1. A user types in the address http://www.bized.co.uk into a Web browser (for example:
Microsoft Internet Explorer or Mozilla).
2. The Web browser sends this information to a program called a name server. Usually this
program is running on a computer operated by the people who provide you with an Internet
connection (your Internet Service Provider or ISP). Part of the sign up process with an ISP
involves 'telling' your computer the location of the name server - usually the setup software
from the ISP does this for you so you are rarely involved with the setup.
3. On receiving the Web address the name server may communicate with other name servers
running on computers all over the world. The name servers associate the Web address with
an IP address.
4. This IP address is then returned to the Web browser.
5. On receiving the IP address the Web browser now knows the precise address of the
computer it needs to connect to in order to receive the appropriate Web page.
In the above description the Web address is an example of a hostname. Name servers
turn/resolve these hostnames into IP addresses refering to computers on the Internet. The
network of programs and information sources that allow the resolution of hostnames is known as
the Domain Name System (DNS). Although the example referred to a Web address the process is
the same for establishing where to deliver email or setting up file transfers between different
computers.
What is the World Wide Web?
The World Wide Web (WWW, W3 or just Web) was invented by Sir Tim Berners-Lee and is an
information system that allows users to view documents (called Web pages) using a piece of
software called a Web browser. These Web pages are located on computers all over the world
(connected via the Internet); these computers all run software known as a Web server (the most
commonly used is called Apache) which waits for requests for Web pages (as outlined above),
processes the request and sends the requested page back to the Web browser. These Web pages
contain links to other related documents. It is these links between documents that give the Web
its name. The links work because every document on the Web is referred to via a Universal
Resource Locator or URL (although the more modern/correct practice is to use the phrase:
Uniform Resource Identifier or URI instead, the reasoning behind this is out of the scope of this
BTEC resource). The URL for this page is:
http://www.bized.co.uk/educators/16-19/business/marketing/lesson/internet1.htm
The specific parts of this URL are:
http:// - stands for HyperText Transfer Protocol. You'll remember that the Internet is made up of
computers communicating with each other through standard protocols. HyperText is one such
protocol and is the one used to transfer Web pages.
www - the name of the computer/server on which the files you are requesting reside.
bized.co.uk - the domain/host name. The .ac.uk part means this domain name is for an
academic organisation in the UK. Other examples include .com = intended for commercial
organisation (but not exclusively so), .gov.uk = UK government, etc.
/educators/16-19/business/marketing/lesson/ - directory/folder path on the Web server.
internet1.htm - the filename for this page.
Task 1
An April 2005 survey suggested that the Web is made up of over 62 million Web servers.
• Given the size of the Web what problems may a business face when promoting a new Web
site?
• How might the business overcome these problems?
Guerrilla Marketing - Lesson Plan: 2-3 x 1 hour lessons
A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal
with Guerrilla Marketing and are relevant to the following specifications:
• AQA: Module 1, 10.3 and and Module 4, 13.3
• Edexcel: Unit 2, Section 4
• OCR: Module 2872 and 2874
Aim:
The purpose of this series of lessons is to encourage students to look at new approaches to
advertising that are increasingly being adopted not just by smaller firms, but also by larger
corporations. There is a misunderstanding amongst some businesses, it seems, about the real
nature of guerrilla marketing - it is not, according to its proponents, an excuse to be tasteless,
crass and 'upfront' in your advertising style. Instead, they point to the energy and enthusiasm
needed by guerrilla marketers in building relationships, networks and contacts that help to spread
the message about their business. The Activity is to get students to look at the potential benefits
to a small company of using such tactics in comparison to more traditional methods of
advertising.
Learning Objectives:
At the end of the lessons, students should:
• Be able to give a clear definition of the meaning of the term 'guerrilla marketing'
• Understand the strengths and limitations of guerrilla marketing tactics for a firm
• Understand the limitations of the use of such tactics
• Be able to apply guerrilla marketing methods to different business types
• Demonstrate analysis and evaluation skills through the medium of a report
Resources:
• PowerPoint Presentation - Guerrilla Marketing [369 KB] (basic version also available for
quicker download [135 KB])
• Mind Map - Guerrilla Marketing
• Activity - Guerrilla Marketing
• Projector and PC
• PCs for student research
• Interactive whiteboard (optional)
Lesson Structure:
Lesson 1
It is important for the success of the Activity that students have a thorough understanding of the
meaning of 'guerrilla marketing'. The use of the Powerpoint Presentation on this technique will be
an important starting point.
1. Begin the lesson by asking students to note down as many types of advertising as they can
think of. (5 minutes)
2. Ask questions to get students to think of the advantages and disadvantages of the methods
they have identified - these can be noted down on a large sheet of paper and put up around
the room for later reference or noted on the 'flip chart' feature of an interactive whiteboard
if one is available - the notes can be printed off at a later stage for the students to refer
back to. (15 minutes)
3. Pose the questions - 'How does a business increase the likelihood of its advertising being a
success?' and 'How does it know when its advertising has been a success?'. Discuss the
student responses - the aim is to get them thinking that just because a firm advertises it
does not necessarily guarantee success and that advertising has to be appropriate. This is
designed to take students away from the often given response to the request to suggest a
strategy to solve a business's problems that they can simply advertise and the problems go
away. (10 minutes)
4. Next, bring the students to an understanding that small firms may be at a significant
disadvantage given a lack of advertising budget - so ask them how small firms could
advertise effectively. (10 minutes)
5. Show the Presentation and spend time discussing the concept of guerrilla marketing and the
implications for a business of such a method. (15 minutes)
6. Review the outcomes of the lesson. (5 minutes)
Lesson 2
1. Review the key points from the last lesson regarding traditional and guerrilla marketing
methods. (10 minutes)
2. Set students the task of looking at the four sites given in the Activity - the aim is to give
them an insight into the range of methods employed by guerrilla marketers and the
potential advantages and limitations of these methods. (35 minutes)
3. Discuss the outcome of the students' research and outline the task. (15 minutes)
Lesson 3
1. Review the task and the learning objectives. (5 minutes)
2. Set students on the task. (55 minutes)
Guerrilla Marketing - Mind Map
Mind Maps have been produced to introduce topics and give students an overview of key topics
being studied. The maps can be viewed as a whole page or, for those who prefer a more linear
approach, as a text version.
View larger version of the mind map.
• Principles
o Presence
o Activity
o Energy
o Networks
o Smart
• Non-traditional advertising methods
o Use of the Internet
o Pop-Up ads
o Use of Internet technology (e.g. log details)
o Word of Mouth
 Roach Baiting
 Undercover Marketing
 Live commercials
o Stickers
o Badges
o Web logs (Blogs)
o Free consultations
o Demonstrations
o 'Illegal' methods
 Bill stickers
 Spray paint logos
 Graffiti Ads
o Generating mystery or intrigue
o SMS Messaging
o Peer marketing
• Advantages
o Flexible
o Low Cost
o Targeted
o Simple
Market Analysis - Lesson Plan: flexible timing
A series of 'off the shelf' lesson plans and resources for use in the classroom. This lesson deals
with Market Analysis and is relevant to the following specifications:
• AQA: Module 1; 10.1
• Edexcel: Unit 2, section 1 and 3
• OCR: Module 2872
Aim:
This lesson serves as an introduction to the marketing function of a business and seeks to cover a
range of factors relating to market analysis. The lesson begins with an introduction to the notion
of market analysis via the use of the PowerPoint Presentation and the Mind Map. This provides the
background to the key terms introduced, which students will be further investigating later in the
lesson. The students are then directed to Biz/ed's Business Profiles, where they are given a
structure to analyse the market for one of the companies. Students can select a company of their
own choice.
The questions serve as the guide to the analysis: some answers will be easily available through
the relevant Business Profile or through the company Web site; other questions will prompt
students to spend more time thinking through the implications of the information they have read.
Learning Objectives:
At the end of the lesson, students should understand the following:
• The meaning of the marketing function
• How markets are broken down by businesses to help target their activities more
successfully
• The meaning of the term 'market positioning'
• The meaning of the term 'market segment', appreciating its diversity
• How a business can target a market segment or combination of segments and
apply this knowledge to a specified business case
• How the market structure and the market share influences the marketing function
Resources:
• PowerPoint Presentation - Market Analysis [244 KB]
• Mind Map - Market Analysis
• Activity - Market Analysis
• Projector and PC
• PCs for student research
Lesson Structure:
1. Introduce the issue of marketing by asking students what they think marketing is - many
will possibly refer to 'advertising'. Consider the responses and discuss the outcomes - arrive
at a definition of 'marketing'. (The process whereby a business seeks to identify and assess
the needs of its customers and find ways of meeting those needs profitably.)
2. Use the PowerPoint Presentation to identify the main point in market analysis - the process
whereby a business seeks to understand the market/s it is operating in and to assess how
this information can help it to address customers needs more effectively.
3. Outline the task using the Activity and stress the learning outcomes of the Activity.
4. Monitor students' progression through the Activity
5. Discuss the results that students have come up with. Draw comparisons and contrast with
the different companies and the different market structures they are operating in.
6. Reinforce the learning objectives by doing a short question and answer session or get
students to write short sentence answers to the learning objectives above.
Market Analysis - Mind Map
Mind Maps have been produced to introduce topics and give students an overview of key topics
being studied. The maps can be viewed as a whole page or, for those who prefer a more linear
approach, as a text version.
View larger version of the mind map.
• Market Position
o Market Niche?
o Market Leader?
o Market Follower?
o Market Challenger?
• Market Objectives
o National Growth
o International Growth
o Ethical Objectives
o Market Share
o Consumer Focus
o Product Focus
o Image
o Social Responsibility
o Revenue Maximisation
• Shareholder Value
• Overcome Competitors
• Which Segment?
o Mass Markets
o Multiple Segment
o Single Segment
• Market Segments; See also: Which Segment?
o Age
o Religion
o Gender
o Income Level
o Lifestyle
o Ethnic Grouping
o Social Class
o Registrar General's Grouping
o Institute of Practicioners in Advertising (IPA) Grouping
o Geographical region
o Family Circumstances
• Behaviouristic
• Market Structure
o Highly Competitive?
o Imperfect Competition?
o Oligopoly?
o Duopoly?
o Monopoly?
The Marketing Mix - Lesson Plan: 2 x 1 hour lessons
A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal
with the Marketing Mix and are relevant to the following specifications:
• AQA: Module 1, 10.3
• Edexcel: Unit 2, Sections 3 and 4
• OCR: Module 2872 and 2874
Aim:
The purpose of these lessons is to encourage students to apply knowledge of the marketing mix to
a variety of real life products and services. The intention is that students should take what they
know and use that information in developing an understanding of the blending of the elements of
the marketing mix. It also aims to develop the ability to make judgements, given that the student
will have to think about the relative importance of the elements of the mix and the way in which
different products and services are marketed. The inclusion of services in the list of potential
sources of investigation is designed to get students thinking about the impact of the 'additional'
three Ps - people, process and physical environment.
The outcome of the Activity can be in the form of a written summary for formal assessment, or
the summaries can be passed round the group for discussion and comment, focussing on why
students had different interpretations of the importance of the elements of the mix.
Learning Objectives:
At the end of the lessons, students should:
• Understand the meaning of the 7 Ps in marketing
• Understand the necessity of blending the elements of the marketing mix to achieve
marketing objectives
• Be able to apply judgement in placing significance on the elements for a variety of
products and services
Resources:
• PowerPoint Presentation - The Marketing Mix [330 KB] (basic version also available for
quicker download [260 KB])
• Mind Map - The Marketing Mix
• Activity - The Marketing Mix
• Projector and whiteboard
• PCs for student research
• Sample product pack
Lesson Structure:
Lesson 1
1. Begin the lesson by showing students the sample product pack. This can be from any
commonly-used product - cereal packet, drinks carton, confectionery, etc - and ask students
to note down what they think are the most significant features about the product. What
comes to their mind about the product? The aim is to begin with what students know and
recognise and then build the theory around this. (10 minutes)
2. Highlight the key points from students' comments under the categories of price, product,
promotion, etc on the whiteboard - briefly introduce a definition of 'the marketing mix'. (5
minutes)
3. Go into further detail on the nature of the mix by introducing the PowerPoint Presentation.
Discuss the key elements in relation to the sample product used earlier during the
Presentation. Pose open-ended questions asking students to make judgements about how
important the element is to the sample product used and to justify their comments. (25
minutes)
4. Point students to the Activity - the first 'example product' should be worked on in the
remainder of the lesson. (15 minutes)
5. Review the main points arising from the lesson and remind students of the task in the next
lesson. (5 minutes)
Lesson 2
1. Review the main points from the last lesson and remind students of the task in the Activity.
(5 minutes)
2. Set students on task.
The remainder of the structure will depend on the method of feedback and assessment chosen. If
the educator is not expecting a written submission, use the students' work as the basis for
discussion as outlined in the 'aim' section above.
Marketing Mix - Mind Map
Mind Maps have been produced to introduce topics and give students an overview of key topics
being studied. The maps can be viewed as a whole page or, for those who prefer a more linear
approach, as a text version.
View larger version of the mind map.
• Product
o Design
o Technology
o Usefulness
o Convenience
o Value
o Quality
o Packaging
o Branding
o Accessories
o Warranties
• Promotion
o Special Offers
o Advertising
o Endorsements
o User trials
o Direct mailing
o Leaflets/posters
o Free gifts
o Competitions
o Joint ventures
• Place
o Retail
o Wholesale
o Mail order
o Internet
o Direct Sales
o Peer to Peer
o Multi-Channel
• People
o Employees
o Management
o Culture
o Customer Service
• Process
o Especially relevant to service industries
o How are services consumed?
• Physical Environment
o Smart
o Run-down
o Interface
o Comfort
o Facilities
• Price
o Strategies:
 Skimming
 Penetration
 Psychological
 Cost-Plus
 Loss leader, etc.
Marketing Tactics
This resource is designed specifically for Unit 5 of the Edexcel BTEC qualification, 'Business
Enterprise'.
Many students see marketing and advertising as being the same thing. Advertising is certainly
part of marketing but in reality it is likely to be a small part of the marketing tactics employed by
a business.
It is really important therefore to ensure that you have a clear understanding of what marketing
means. The following definition will be used as the basis for the work in this resource.
Marketing is the process by which customer needs are anticipated and identified. Ways are found
of meeting those needs at a price that consumers are prepared to pay and which allows the
business to make a profit.
Look at this definition really closely and you will see that it really does involve a whole lot more
than just advertising.
Image: Having impressive adverts may be a useful marketing tactic but the role of the marketing
function involves much more than this. Do customers recognise the brand? Is there a unique
selling point (USP) that can be used to differentiate your product or service from another? How
will the firm manage its cash flow? All these factors and more are part of the tactics that are used
in the marketing function. Copyright: Gunter Hofer
To tell the story of the role of the marketing function in a business, we are going to follow through
what might have happened in the marketing of a major new chocolate bar. As an example, you
can get some background to the launch of the Fuse bar from the Cadbury Web site.
We will try and put some more flesh on this story to show how marketing tactics could be
developed.
Your task at the end of the process will be to apply this knowledge to another product - it can be
something real that has just been launched or something you make up! You will have to present
your tactics in the form of an oral presentation and you will have to be prepared to have questions
asked of you by your peers. This form of assessment is part of what you will have to do to earn a
merit in unit 5.
1. Assessing the market
The market for chocolate bars is highly competitive. There are a small number of large firms in
the industry - Mars, Cadbury, Nestlé and Suchard being the most well known. Many of the brands
in the market have been in existence for a long time and have a high amount of brand loyalty.
Openings for new products therefore are limited. There are many examples of products that have
been launched and which have been withdrawn because they could not sustain long-term sales
success. Can you remember the Prize Bar, Aztec and Junglies?
The market for certain types of chocolate bar has changed in recent years. The growth of the so -
called 'count-line bar' (shaped like Mars bars) became popular as people ate chocolate on the go
as opposed to sitting down in a room with a traditional bar of chocolate. Companies had to
respond to these changes. Rowntree (now owned by Nestlé) changed the shape of their Aero bar
and Cadbury brought out a rival bar called Wispa. Both of these were designed to exploit this
growing market.
The market is still changing but using chocolate as a snack as opposed to sharing a bar amongst a
family or giving chocolate as a gift is still a growing part of that market.
Task
Do some research on the market for chocolate. Who are the main businesses involved? What are
the main brands? What are the relevant market shares of different brands and manufacturers?
How has the market changed in recent years?
A visit to a local supermarket or corner shop might help here but there are also a number of Web
sites that will be relevant:
• Mars
• Cadbury Schweppes
• Nestlé
• Suchard
2. Identifying a gap in the market
Once the market has been analysed it might become clear that there is a gap in the market. What
this means is that there is an identifiable customer need that is not currently being met by an
existing product. It could also be where a rival might have a presence and where the company
concerned believes it could offer a competitive alternative.
Market research which, in many cases is on-going, will have given the business some idea of the
nature of the market and the extent of the possible market. It may be that further research is
used to target particular market segments that the business feels will be the ones most likely to
purchase this product and what it is they want out of the product. Much of this will be used to
inform the marketing mix.
Image: There are lots of people in any market but identifying who are the most likely groups to
buy your product informs different aspects of marketing tactics. Copyright: José A. Warletta
Task
What do you think will be the most likely market segments that a business like Cadbury
developing a new chocolate bar would target? Ensure that you justify your answer.
Explain the meaning of the term 'marketing mix' and describe how the market research collected
might inform decisions on the mix for a new chocolate bar.
3. Developing the product
Quite often businesses in this particular industry want to develop a 'brand personality'. What this
means is that they will want consumers to associate something specific with the product. KitKat
for example is associated with a 'break' making it the perfect accompaniment to a cup of tea or
coffee. The personality of the product will be in line with the market research and analysis carried
out. The ingredients, the look of the product, its texture when eaten, its name and packaging and
how it will be promoted will all be key factors that will be informed by the development of the
brand personality.
A very good example of this process is the development of Yorkie. Yorkie was developed as a
contribution to the count-line bar market. It aimed to use the concept of a chunky chocolate bar
but in a different format to allow it to be eaten on the go. The key thing to emphasise was the
chunky nature of the chocolate and to do that Rowntree developed its early marketing around the
length of time it would last and it being an ideal accompaniment for long journeys. The trucker
image stuck and gave the bar a 'masculine' personality. In recent years this has been exploited
with a deliberate campaign suggesting that it is so chunky it is 'not for girls'!
Image: Yorkie - originally associated with truckers but now developed along the same masculine
lines - this is a bar not for girls! Copyright: Michael Sellwood
Task
Think about the product you are going to develop. What sort of brand personality is it going to
have? Seductive, romantic, sexy (think of the Flake adverts?), youthful, a product for those on the
go, a quick break product, light, filling, energy giving, masculine, feminine and so on.
Think of the sort of catch phrase that might be used to capture this type of product personality
(for example: 'Have a break, have a KitKat'; 'A Mars a day helps you work, rest and play'; 'A
sweet you can eat between meals without ruining your appetite' (Milky Way), 'Bite it and believe'
(Wispa)).
This should also help you to begin thinking about the type of ingredients in your product, what it
will look like and how you might develop the promotion of the product and how it will stand out in
the market.
4. Product testing
Once these stages are gone through, the product is likely to have to be tested. People may be
given choices of different names or different packaging prototypes to see what consumer reaction
is.
It may be that this type of problem has been resolved at an earlier stage in which case more
substantial user testing may be used by virtue of a test-market. This may be a selected region of
the country where there is a profile of users that is representative of the country as a whole.
Using test markets gives relatively accurate feedback but is also much cheaper than a national
launch, which might not see the product doing as well as anticipated.
Remember, that to feed a market the capital investment has to be there to back it up and if the
test market showed that the product was going to be very popular the business would have to
ensure that sufficient capacity was available prior to a national launch. You would certainly not
want to have a product launched and people not be able to get hold of it!
Image: User testing is an important aspect of marketing strategy - it gives a good idea of the
likely market reaction without incurring the costs of a national launch. Copyright: Nick Benjaminsz
5. Launch
All these stages in the development of the product will have required significant investment. The
sums of money involved in developing new products can be large and of course the hope is that
once launched the product will begin to start repaying some of that investment.
In its early stages however, the product will need further expenditure to support it and make sure
that customers know about it. For chocolate bars the secret is to get people trying it but to follow
that up by buying it again, and again and again for many years. In other words repeat purchases
are essential in a fast moving consumer goods market.
During this early stage managing the cash flow of the product will be important. This will mean
balancing the returns of the product from sales with the on-going costs of production and
marketing. If these get out of balance the future of the product will be called into question and it
may be worthwhile pulling the product before any further costs are incurred and 'cutting your
losses'.
To manage the launch and development of a product, therefore, marketing tactics will really come
to the fore. It will be important to keep a close link with consumers to find out what they think
and also to keep the brand in their horizon amongst the competition. Sometimes this might be
something simple like getting your product displayed prominently in shops so that impulse buyers
select your product or customers are drawn to your product at the expense of rivals. This in turn
will mean having sales people with good relationships with retailers.
Finally, maintaining cash flows in the short term will also be determined by the success of the
advertising and promotional campaigns that are developed. Does the firm go for traditional TV ads
along with ads in magazines and billboards or does it go for more guerrilla marketing techniques
to raise awareness? Should it have an online presence - many branded products have Web sites of
their own, for example?
These are all important factors to consider and the launch of the product does not mean the job is
done!
Task
How might you use product portfolio analysis and the Boston Matrix to analyse the current
position of your product and manage its cash flow?
The Presentation on Product Life Cycles and the Boston Matrix [197 KB] will be of help.
Why might you use guerrilla marketing tactics as opposed to traditional marketing strategies to
promote a new product such as a chocolate bar? See the Presentation on Guerrilla Marketing [378
KB] for help here.
Final Task
Remember for part of the assessment for this unit you will have to deliver an oral presentation
outlining your marketing tactics for the development of a new business venture. The aim of this
activity has been to give you a framework around which you can develop this.
You can put the tasks together in order to do this. Remember that you will have to answer
questions on your presentation. To get to distinction level you will have to be able to evaluate the
viability of the product you develop. This means not simply assuming that it will be a rip roaring
success but really looking at the steps you have gone through. You need to ask whether the
product really is that much different to what is already on the market and whether it will really be
a long term success.
Good luck.
Market Power, Competition and Regulation - Lesson Plan: 4 x 1 hour
lessons
A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal
with Market Power, Competition and Regulation and are relevant to the following specifications:
• AQA: Module 3, 12.2
• Edexcel: Unit 1, Sections 1 and 4
• OCR: Module 2871
Aim:
This could cover three or four one-hour lessons, with at least two of the lessons being devoted to
the research activity and preparation, whilst the third or fourth could be devoted to the
presentations themselves. Some time will need to be spent at the outset explaining the context -
the Presentation and Mind Map should be able to cover the main areas here.
There is a good deal of background information and students need to be aware that an outline
knowledge only is required of the legal framework rather than any details of the relevant Acts of
Parliament. The aim of the Presentation is to give students some understanding of the sheer
volume of legal and regulatory powers that cover business and to impress upon them that such
powers are a force for good. However, it also aims to show the disadvantages in terms of the
added cost burdens that businesses have to face in complying with and monitoring these laws and
regulations.
It can be a useful ploy to get an outside speaker from a local business to explain how such
regulations and laws impact on their business - question and answer sessions are useful to
explore this further. If this proves difficult, the Principal or Head Teacher could well be a valuable
substitute in covering the range of legal and regulatory instruments that affect a school. Another
strategy could be to use students' own experiences of their work environments and how rules and
regulations affect how they work. Such a ploy is very important in helping to place known
experience into the context of the studies being undertaken and works from the basis of what
students know.
After the initial discussion, the research activity can begin. The Activity does warn against getting
too much information; the sites that have been highlighted give all the information that is
necessary for the successful completion of the Activity but students will have to learn to be
selective. Working in groups is recommended here but care needs to be taken to ensure that all
students in the group are on task and have something valuable to do and contribute to the
presentation.
Students can be guided to the importance of presenting their ideas effectively - many will use a
PowerPoint presentation but it is important they understand that merely reading out what they
have put on the screen insults the intelligence of their audience! Such skills are important parts of
the learning process and this Activity seeks to help develop those skills. If the task is to form part
of an assessment then the ability to present and communicate the ideas and points successfully
can be built into the assessment or used as possible evidence in a key skills programme. Videoing
the presentations can be useful in helping students to see how they thought they presented!
The outline for the lessons therefore is less prescriptive than we have given in the past and is
designed to offer maximum flexibility but the outline below is a rough guide.
Learning Objectives:
At the end of the lessons, students should:
• Understand the meaning of the term 'regulation'
• Understand the scope of the regulatory authorities in the UK
• Understand the range and implications of the legal framework as it affects
business
• Demonstrate key research skills - selection, organisation and synthesis
• Have prepared and given a presentation to peers using appropriate methods
Resources:
• PowerPoint Presentation - Competition, Legislation and Regulation [73 KB]
• Mind Map - Competition
• Activity - Market Power, Competition and Regulation: Anti-Competitive Behaviour
• Access to PCs for students for research
• Speaker as appropriate
• Projector/PC
Lesson Structure:
Lesson 1
1. Introduction to the topic area:
o Use of Presentation/Mind Map
o Use of a visiting speaker/Principal/Head Teacher
o Discussion session with students on their own experiences
2. Explain the task - the task can be printed out to give to students or they can be directed to
PCs where they can follow the process
3. Decide which group is going to tackle which case - groups can be given more than one -
there is a significant amount of choice
4. Begin the research task
Lessons 2 and 3
Continue research task and develop presentation.
Lesson 4
Each group offers its presentation. Time should be set-aside at the end of this lesson or at the
beginning of the next lesson to discuss the learning outcomes of the Activity in relation to the
learning objectives above.
Competition - Mind Map
Mind Maps have been produced to introduce topics and give students an overview of key topics
being studied. The maps can be viewed as a whole page or, for those who prefer a more linear
approach, as a text version.
View larger version of the mind map.
• Self Regulation
o PCC
o Portman-Group
o BMA
• Legal Framework
o Weights and Measures
o Sale of Goods
o Trade Descriptions
o Trading Standards
o Environmental Health
o Employment law
o Food Safety
o Consumer Protection
o Labelling
o Data Protection
o Hazardous substances
o Disability rights
• Market Structure
o Perfect Competition
 Many buyers and sellers
 Identical products
 Perfect knowledge
 Price takers
o Imperfect or monopolistic competition
 Many buyers and sellers
 Differentiated products
 Some control overprice
o Oligolpoly
 Concentration ratio
 Industry dominated by small number of large firms
 Price Stability?
 Non-Price Competition
 Collusion?
o Duopoly
 Industry dominated by two large firms
 Price leadership
o Monopoly
 Firm = industry
 Natural monopolies
 25% + Market Share
 Potential for exploitation
• Advertising (ASA)
• Competition Commission
See also: Competition
• OFT
• Regulation
o The Regulatory Reform Act 2001
o Patents
o Licences
o Standards
o Health and Safety
o Planning
o Competition
o Former State Owned Monopolies (Of...)
Market Research - Lesson Plan - 2 x 1 hour lessons
A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal
with Market Research and are relevant to the following specifications:
• AQA: Module 4
• Edexcel: Unit 4
• OCR: Module 2880
Aim:
The subject of market research, in particular the relevance of secondary research, forms the basis
of the Activity associated with this lesson. The information given is from the Global New Products
Database, published by the consumer intelligence providers and consultants Mintel. Students are
asked to look at the information and make connections with a selected list of relevant companies.
Some of the information provided may be very useful for such companies; others may be of little
benefit unless there is the opportunity of accessing new markets.
The aim is for students to think creatively as well as to gain a greater understanding about how
such companies might use secondary information in developing marketing strategies. Permission
to use the information has been kindly given by the Mintel organisation. There have been a
number of related articles on Biz/ed, for example, the impact of the Atkins Diet on businesses.
Students may wish to refer to these for additional support (see In The News - Demand and Diets
and Technology and Changing Social Attitudes - Activity).
Learning Objectives:
At the end of these lessons, students should be able to understand:
• The difference between primary and secondary market research
• How secondary research may be used by a business to help inform its marketing
decisions
• The importance of having other information on which to base marketing decisions
• The limitations of market research in developing marketing strategies
Resources:
• PowerPoint Presentation - Market Research [194 KB]
• Mind Map - Market Research
• Activity - Market Research
• Projector and PC
• PCs for student research if required
• Video with pre-recorded selection of two sets of TV adverts (4 minutes) or a selection of
magazine adverts
Lesson Structure:
Lesson 1
1. Introduce the concept of market research by brainstorming methods by which companies
gather market information - use the students' own knowledge as the starting point for the
lesson and seek to develop understanding from this base. (10 minutes)
2. View the pre-recorded adverts - ask students to note the company and the brand being
considered in the advert and the message of the advert. (10 minutes)
3. Discuss the reasons why companies might want to gather market information - encourage
students to think of specific examples of products and services linked to the TV adverts. (15
minutes)
4. Introduce a more formal approach to the subject through the PowerPoint Presentation. (15
minutes)
5. Introduce the Activity and go through the Mintel data explaining the task for the next
lesson. (10 minutes)
Lesson 2
1. Re-cap on the main points drawn from the last lesson. (10 minutes)
2. Set the task and go over the questions outlining the main learning objectives of the
exercise. (5 minutes)
3. Set students to work on the task. (40 minutes)
4. Re-cap on the main findings by the students/collect in the written task. (10 minutes)
Market Research - Mind Map
Mind Maps have been produced to introduce topics and give students an overview of key topics
being studied. The maps can be viewed as a whole page or, for those who prefer a more linear
approach, as a text version.
View larger version of the mind map.
Market Research
1. Primary Research
1. Questionnaires
2. Focus Groups
3. User Groups
4. Postal Survey
5. Telephone Surveys
6. Customer Interviews
7. Test Markets
8. Technology - Internet feedback
2. Secondary Research
a.Internal Sources
1. Company Accounts
2. Internal Reports and Analysis
3. Stock Analysis
4. Retail Data - loyalty cards, till data, etc.
b.External Sources
1. Gov't Stats (ONS)
2. EU - Euro Stat
3. Trade Publications
4. Commercial Data - Gallup, Mintel, etc.
5. Household Expenditure Survey
2. Sampling Methods
1.Random Samples
2.Stratified or Segment Random Sampling
3.Quota Sampling
4.Cluster Sampling
5.Contact or 'Snowball' Sampling
6.Multi-Stage Sampling
2. Purpose
1.Size of market
2.Market Trends
3.Forecasting
4.Planning
5.Evaluation of Strategies/Promotion
6.Assessing Marketing Mix
7.Identifying Market Segments
8.Identifying Consumer Needs
9.Identifying Competition
3. Identifying Opportunities/Gaps in the Market
4. Reduce Risk
Mergers, Takeovers and Product Differentiation
This resource is designed specifically for Unit 29 of the Edexcel BTEC National qualification,
'Business and Markets'.
Aim:
The aim of this resource is to enhance your understanding of integration in business. By the end,
you should be able to:
• Identify the types of integration that takes place in markets
• Understand the difference between horizontal and vertical integration
• Identify the main types of economy of scale
Resources:
• PowerPoint Presentation - Mergers and Takeovers [55K]
Activity:
There is over-capacity in the global car industry. This means that there are too
many firms with factories producing too many cars for which there is insufficient
demand from consumers to buy. In the face of such market conditions, car
manufacturers have to decide how to operate. Should they cut production and
rely on strong branding or reputation to survive, or should they become more
aggressive in the market, perhaps buying up rival companies in an effort to be
'the last one standing'?
In this Activity we look at the strategy of General Motors, as they attempt to retain their status in
the market.
General Motors' (GM) Expansion Strategy
GM is a mass market car producer and US multinational. The company owns Saab, a Swedish
upmarket car maker, who when they wanted a new small car, without the development time and
cost that is usually involved, turned to Subaru, a Japanese manufacturer. GM also owns 20% of
Fuji Heavy Industries, who are the owners of Subaru.
Now that's what you call 'globalisation'. The upshot is that the Saab model that came out in 2004
was produced in record time. But then, the new Saab was expected to be a very similar car to the
Impreza, Subaru's rally-inspired saloon.
This has been the deliberate policy of GM: to buy up small stakes in rival car producers'
businesses. In fact GM have spent nearly $5 billion in recent years, following this strategy. The
following table illustrates the policy in detail:
Image: The Subaru Impreza STi. Copyright: Tim Spence, stock xchng
Company Date Strategy
Suzuki (Japan)
1998
onwards
Long-standing links with GM who bought a 3, then
10, then 20% stake
Isuzu (Japan) 1998
Long term alliance led to GM paying $420 m for
business
Subaru (Japan - Fuji Heavy
Industries)
1999
20% stake worth $1.5bn held in Subaru's parent
company
Fiat Auto (Italy) 2000 20% stake bought for $2.4 bn
Daewoo Motor (S Korea) 2003 42% stake held by GM
In addition, GM bought Saab outright. It had previously owned 50% of the Swedish firm.
Senior management from Daewoo and General Motors meet to sign an agreement on General
Motors acquisition of parts of Daewoo.
Title: General Motors Corp and Daewoo Motor Sign Agreement. Copyright: Getty Images,
available from Education Image Gallery
Why has GM embarked on such a strategy? What are the benefits that the company expects to
flow from building strategic alliances with smaller competitors? Here we list some of the key
advantages:
• Joint production of engines and new models saves costs
• Production economies of scale
• Managerial economies of scale
• Technical economies of scale
• Speedier development times
GM is not alone in this strategy; many of the other large car makers have started similar projects.
• Daimler-Benz took over Chrysler and also control Suzuki and Mitsubishi
• Renault and Nissan merged in 1999 and bought Samsung in 2001
• Ford owns Volvo cars and Land Rover
But these have tended to be outright takeovers or mergers, involving greater cost and
commitment from the predator firm. GM's policy has been to acquire parts of smaller competitor
car makers. Their aim has been to achieve a better 'fit' between themselves and the smaller firm.
These so-called 'synergies' between the two companies in a merger/takeover enable the predator
firm to broaden the base of its product range, so that it has a car for every segment, or type of
customer, in the market. These products can then be given the merged company's 'brand'
(reputation for quality, status in the marketplace and so on), and can therefore appeal to the
different target customers. This process of 'differentiation' is one of the key ways in which firms
compete in oligopoly markets.
The advantages that can flow from GM's plan are not guaranteed, though. There can be big
problems that acquisitive firms can have with mergers and takeovers. This is recognised by GM.
Their chairman and chief executive, Rick Wagoner, was quoted as saying that it only needs a few
successful results to prove the value of their strategy. Out of 30 joint projects between GM and
Subaru, 20 didn't work out, he estimated.
Conclusion
There has been significant structural change in the car production industry in recent years. The EU
certainly expects this to continue in the near future. On its Europa Web site, the EU reckons that
the six existing global car manufacturing companies (GM, Ford, DaimlerChrysler, Toyota,
Volkswagen, and Renault-Nissan-Samsung) are likely to become stronger, as they continue to
extract savings from their strategic alliances with the likes of Fiat, Mitsubishi, Subaru, Isuzu and
Suzuki. The analysis goes on to assert that three other car firms are likely to continue outside
these alliances: BMW, Honda and PSA (Peugeot and Citroen).
Task
1. Assign students in groups to each look at one of the merger examples below.
2. Carry out research and prepare a presentation to be made to the whole group.
3. The groups looking at merger examples 3 and 4 (Procter & Gamble/Gillette and
Morrisons/Safeway) can carry out further Web or newspaper research into the outcomes of
the cases.
Merger Examples
1. Cameron Balloons merger worksheet
2. At your Leisure feature on Procter & Gamble and Gillette
3. Symantec in $13bn Veritas merger - from the BBC
4. Mind Your Business feature about Morrisons' takeover of Safeway, also In The News feature
on the same story
5. Mergers and Takeovers - In The News feature on various recent takeovers.
Pricing Policies, Quality, Adding Value and Advertising
This resource is designed specifically for Unit 11 of the Edexcel BTEC National qualification,
'Introduction to Marketing'.
Aim:
The aim of this resource is to enhance your understanding of pricing in business. By the end, you
should be able to:
• Identify the use businesses can make of demand analysis
• Understand different types of pricing policy that firms can adopt
• Identify and analyse how added value can affect price
• Understand how advertising can be used to differentiate products and charge premium
prices
Resources:
• PowerPoint Presentation - Pricing Policies, Quality, and Adding Value [71 KB]
Activity:
In the battle for consumers' spending in the retail fashion market, we often wonder what justifies
a three or four figure price tag. How can something designed for people to wear really be worth
the value some retailers put on the item? Sometimes, though, the link between the price you pay
and the cost of the raw materials can be clear. The BBC article Australian Sheep Spin Riches looks
at the richest herd of sheep in the world - one that has recently produced the most expensive bale
of wool ever.
Task 1
1. What justification is there for the world record sheep wool price?
2. In what way is the concept of 'added value' going to apply to the herd's wool?
3. In which shops would you expect to see the results of this added value?
Contrast this to the way UK shoppers are often told that the food retailing industry (dominated by
the supermarkets) is delivering what we demand of them, by way of lower grocery prices. A
Friends of the Earth Press Release on Supermarket Mergers brings this claim into question. It asks
whether mergers in the industry really are good for consumers, as is often claimed.
Image copyright: Jelmer Rozendal, stock.xchng
Task 2
1. Why do you think supermarkets might be able to charge higher prices for fresh fruit than
greengrocers or market stalls?
2. In the light of this article, how do you think that supermarkets can justify their claims that
the cost of shopping is being cut?
Pricing Strategies - Lesson Plan: 2 x 1 hour lessons
A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal
with Pricing Strategies and are relevant to the following specifications:
• AQA: Module 1, 10.3
• Edexcel: Unit 2, Section 4
• OCR: Module 2872 and 2874
Aim:
The aim of these lessons is to investigate pricing strategies, covering all the main types, both
from a cost base and a market base. The subject matter is introduced via the PowerPoint
Presentation - there are 35 slides so it is advisable to break it up as suggested below.
The associated Activity provides two case studies that encourage students to think about the key
strategies they will have covered in the Presentation. The first case study looks at PlayStation 2.
The table provides a list of various prices at major retailers and Internet retailers. There is also
some additional information provided about the original launch price of PlayStation 2 and the fact
that it had to be rationed on first release! The prediction that price would fall below £100 in 2004
gives students the opportunity to relate market skimming as a possible price strategy but why
might this not have occurred?
The second case study focuses on a flight from London to New York. Two dates have been chosen
and the price differences are marked. Students are asked, again, to consider the pricing strategies
behind the case study. The expectation is that students can relate the principle of price elasticity
of demand to this case study. The initial dates chosen (February 14th - 21st) coincide with the
half term holidays for schools and colleges in the UK and also Valentines Day on February 14th.
The noticeable difference between the prices in the week after the school and college holidays can
be partly explained by a different price elasticity during those two weeks as the nature of demand
changes.
The second case study also allows students to look at pricing issues that are more heavily
weighted towards cost rather than the market.
The initial discussion section requires the collection of some newspaper or magazine adverts
showing different prices. It is advisable to go through the Presentation prior to the lesson to
ensure that you have at least one example of a real product to highlight each strategy.
Learning Objectives:
At the end of the lessons, students should:
• Understand the basic principles behind the range of different pricing strategies
used by firms
• Understand the difference between cost based and market based pricing strategies
• Be able to apply understanding of pricing strategies to different business
situations
• Understand other key factors that go into pricing decisions by firms
Resources:
• PowerPoint Presentation - Pricing Strategies [695 KB] (basic version also available for
quicker download [384 KB])
• Mind Map - Pricing Strategies
• Activity - Pricing Strategies
• Projector and PC
• PCs for student research
• Some newspaper adverts highlighting different pricing examples for use with the
Presentation and for initial discussion
Lesson Structure:
Lesson 1
1. Using one of the adverts (or if you are feeling generous some chocolate bars or similar
handed out to the students) ask the question 'why is this item priced at £xxx?' Get feedback
from students and discuss results. (10 minutes)
2. Hand out other examples collected and ask students to consider what the reasons might be
for the pricing decisions in the cases used. (15 minutes)
3. Introduce the subject of pricing strategies using the PowerPoint Presentation. As you are
going through the Presentation, keep engaging the students in discussion using the adverts
collected or ask students to go through the magazines, etc. provided to find examples of
their own to highlight the strategy. Get students to write the strategy on a large sheet of
paper and then stick the examples underneath - these should be put around the room to act
as peripheral learning devices and reinforcement throughout the two lessons (and beyond if
there is space!). (35 minutes)
Lesson 2
The second lesson can be attacked in a variety of ways to suit the needs of the group.
1. Review the learning outcomes from the last lesson, reminding students of the practical
examples highlighting the strategies. (5 minutes)
2. The remainder of the lesson can be followed in a flexible manner. (45 minutes)
o Introduce the Activity and go through the two case studies. Students can either be
set the task or it can be the basis for some discussion prior to students writing down
some information. The Activity can be used as a discussion base only without the
need for any written output.
o Students could be split into groups to consider their response to the case study and a
representative feedback the group ideas to the rest of the class. The main points
should be highlighted on the board or flip chart to enable the outcomes to be
discussed. Highlight the different emphasis given by different groups - the aim is to
drive home the principle that there is no right answer to such questions but that
students need to be confident in making judgements and supporting those
judgements.
3. Finish off the lesson with a review of the key learning outcomes - give a short question and
answer session to assess the extent of the learning that has taken place. (10 minutes)
Pricing Strategies - Mind Map
Mind Maps have been produced to introduce topics and give students an overview of key topics
being studied. The maps can be viewed as a whole page or, for those who prefer a more linear
approach, as a text version.
View larger version of the mind map.
• Market Skimming
o High Price/Low volume
• Value Pricing
o Price based on consumer perception
• Loss Leader
o Sold below cost to attract sales elsewhere
• Psychological Pricing
o £1.99!
• Going Rate (Price Leadership)
o Prices set following lead of rivals
• Tender Pricing
o Bids for work
• Price Discrimination
o Different price, same good/service
• Destroyer Pricing/Predatory Pricing
o Aims to force out competitors
• Absorption/full cost Pricing
o Set price to cover FC and VC
• Marginal Cost Pricing
o Set price in relation to MC
• Target Pricing
o Target level of profit
• Contribution Pricing
o Variable/Direct Costs + contribution to Fixed costs
• Cost-Plus Pricing
o Average Cost + mark up
• Influence of Elasticity
o Price Inelastic
o Price Elastic
• Penetration Pricing
o Low price/High volume
Principles of Online Presence
Image copyright: Melanie K., stock.xchng
This resource is designed specifically for Unit 6 of the Edexcel BTEC qualification, 'Business
Online'.
Aim
This area of the Business Studies curriculum aims to investigate some of the reasons why
businesses develop an online presence and the impact this has on customers.
An online presence means setting up a Web site for your business. The Web site may have a
variety of functions, ranging from promoting the company to a wider audience, offering
support/advice or selling products and services through e-commerce.
Initially, we will examine the impact of four Web sites. We will then explore the key opportunities
and possible pitfalls for a business arising from an online presence. Finally, we look into the
impact of a business' online presence on the customer.
At the time of writing (Spring 2006), the Web sites referred to in this resource were freely
available and the details below correct. However, Biz/ed cannot guarantee the continued
availability of third-party sites but will endeavour to keep this resource up to date with different
examples should the need arise.
Task 1
Visit the homepage of each of the following Web sites:
• Honda Racing F1
• Society of College, National and University Libraries (SCONUL)
• ACF Hospitality
• Biz/ed
Consider these questions:
• What is the principal purpose of the Web site? (Sales, promotion, support, etc.)
• Which site has the biggest visual impact?
• Which features on the Web site might encourage you to visit again?
• What didn't you like about the sites and can you think of any reasons why visitors may not
return?
Focusing on the features and design, here are some of our thoughts on the Web sites:
• Honda Racing F1
The Honda Racing F1 site promotes the activities of the Honda Racing Formula 1 team. In
addition, there is a shop to buy merchandise. The site is visually appealing and regularly
updated sections (news, latest pictures, etc.) mean that visitors are likely to return for the
latest information. However, it could be argued that there is little contrast between the grey
text of the navigation and the black background colour, which may make this text difficult to
read. The Web site is also available in eight different languages so would have a wide
appeal.
• SCONUL
The SCONUL Web site promotes the activities and publications of the Society of College,
National and University Libraries. One of the most prominent pieces of content on the
homepage is information on what SCONUL is. A new visitor would find this information
invaluable. There is a site map and site search, allowing a visitor to quickly find the
information they require. Latest news is visible on the homepage and this highlights the fact
that the site is regularly updated. There is also a 'change font size' feature so the user may
increase the size of the text to make it easier to read. However, a user may be put off by
the fact that the copyright link refers to 2003 rather than 2005 and the presence of both
'contact us' and feedback' links may be confusing.
• ACF Hospitality
The Web site is for ACF Hospitality, a company that organises corporate events. The first
content to appear is an animation (produced in Macromedia Flash). Although a visitor could
follow the 'Skip Intro' link, it could be argued that this animation is a distraction from the
site content (especially for regular visitors). In addition, most of the content of the Web site
is delivered through Flash animations. Anyone visiting the site using a device that didn't
support Flash may be unable to access the content. However, assuming you can access the
content, the layout reflects the active nature of the company and the constantly changing
testimonials and prominent contact details instil confidence in the organisation.
• Biz/ed
Biz/ed supports students and educators of business studies, economics and related subjects.
Visitors to the homepage can quickly determine what new content is available on the site,
be it new and updated resources for educators, topical news items ('In the News') or the
latest resources on current topics ('What's New'). New visitors can quickly gain familiarity
with the site through reading the descriptions of the main site sections, using the site map
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Marketing

  • 1. Business Studies Educators (16 - 19) - Marketing This section is designed as a resource for teachers and lecturers teaching Marketing at AS, A2, A Level (AVCE) and BTEC. The resources include lesson plan/s, presentations to introduce a topic area on PowerPoint and as a mind map and activities designed to support the lesson and stimulate student learning. The mind maps give the big picture and are available as a graphic or as text. Each resource can be used together or as a stand alone - for example, the activities can be used for homework. Marketing Asset-led versus Market-led Marketing - Lesson Plan Marketing - PowerPoint Presentation [145 KB] Marketing - Mind Map British Airways: Asset-led or Market-led? - Activity The Benefits of e-Business and Marketing Creative Corporate Communication Developing a Promotional Campaign E-Commerce Explanation of the Internet and the WWW: How Does it Work? Guerrilla Marketing - Lesson Plan Guerrilla Marketing - PowerPoint Presentation - Basic version [150 KB] Guerrilla Marketing - PowerPoint Presentation - Full version [404 KB] Guerrilla Marketing - Mind Map Guerrilla Marketing - Activity Market Analysis - Lesson Plan Market Analysis - PowerPoint Presentation [275 KB] Market Analysis - Mind Map Market Analysis - Activity The Marketing Mix - Lesson Plan The Marketing Mix - PowerPoint Presentation - Basic version [281 KB] The Marketing Mix - PowerPoint Presentation - Full version [376 KB] The Marketing Mix - Mind Map The Marketing Mix - Activity Marketing Tactics Market Power, Competition and Regulation - Lesson Plan Competition, Legislation and Regulation - PowerPoint Presentation [86 KB] Competition - Mind Map Market Power, Competition and Regulation: Anti-Competitive Behaviour - Activity Market Research - Lesson Plan Market Research - PowerPoint Presentation [209 KB] Market Research - Mind Map Market Research - Activity Mergers, Takeovers and Product Differentiation Mergers and Takeovers - PowerPoint Presentation [56 KB] Pricing Policies, Quality, Adding Value and Advertising Pricing Policies, Quality and Adding Value - PowerPoint Presentation [91 KB] Pricing Strategies - Lesson Plan Pricing Strategies - PowerPoint Presentation - Basic version [419 KB] Pricing Strategies - PowerPoint Presentation - Full version [744 KB] Pricing Strategies - Mind Map Pricing Strategies - Activity Principles of Online Presence Product Portfolio Analysis - Lesson Plan Product Portfolio Analysis - PowerPoint Presentation - Basic version [140 KB] Product Life Cycles and the Boston Matrix - PowerPoint Presentation - Full version [316 KB] Product Portfolio Analysis - Mind Map
  • 2. Product Portfolio Analysis - Activity Profit, Loss and Value Added - Lesson Plan The Role of Profits and Markets - PowerPoint Presentation [257 KB] The Role of Profits and Markets - Mind Map Profit, Loss and Value Added: The Mobile Phone Industry - Activity Promotion, Advertising Agencies and the Media: Promoting Biz/ed Simple Business Web site: Development Lifecycle Simple Business Web site: Domain Names and Hosting Simple Business Web site: How to Create Web Pages Simple Business Web site: Legal Obligations Simple Business Web site: Measuring Success Asset-led versus Market-led Marketing - Lesson Plan: 2 x 1 hour lessons A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal with Asset-led versus Market-led Marketing and are relevant to the following specifications: • AQA: Module 4, 13.1 • Edexcel: Unit 6 • OCR: Module 2874 Aim: The lessons set out to help students to make a distinction between asset-led and market-led business approaches. The context used is that of British Airways (BA). BA has faced a number of challenges in the last ten years and the strategies developed have, in some respects, sought to focus on exploiting its assets and cutting costs. In so doing, it could be argued that it has not spent sufficient time focusing on its market. The problems experienced in the summer of 2004 with cancellations and flight delays were caused by staff shortages, something that the boss Rod Eddington accepted had been due in part to its strategy in recent years. The Activity is broken up into a series of tasks that lead the student through the process of building up information, providing the tools for analysis, before posing a final task that asks students to use their knowledge and to evaluate the extent to which BA can be described as 'asset-led'. The Activity can be tackled in small groups, with each developing their ideas and then feeding back to the rest of the class before getting the class as individuals to tackle the final task, or it could be developed as a series of tasks for individuals. The final task can be treated as a written piece for assessment or could be presented by groups with a discussion being held on the different judgements made by each group. Learning Objectives: At the end of the lessons, students should understand the following: • The difference between asset-led and market-led marketing • The application of the two concepts to a specific case study
  • 3. • An approach of researching a topic, understanding analysis and developing an evaluative response Resources: • PowerPoint Presentation - Marketing [117 KB] • Mind Map - Marketing • Activity - British Airways: Asset-led or Market-led? • PC and digital projector • PCs for student research Lesson Structure: The Activity should take no longer than two lessons. However, the structure will depend on the approach adopted. If the approach is to encourage individuals to work on the tasks then the lessons will need to be punctuated by some brief teacher input before each task to help clarify what is required. If the group based approach is chosen then time will need to be allocated for the discussion periods following each group's feedback and for the final presentation on the group's judgements to be made. The Presentation can be used at the beginning of the first lesson to introduce some of the key principles in the subject. The tasks and the discussion can then follow. Marketing - Mind Map Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version.
  • 4. View larger version of the mind map. • Asset-Led o Strengths of the Business  Physical Assets  Distribution  Manufacturing base  Global Reach  Intangible Assets  Brand Name  Image  Personnel  Core Competence o Needs of Consumer + » See also: Strengths of the Business • Market-led o Customer at the heart o Extensive use of market research o Customer needs
  • 5. o Customer service o Customer servility (being a slave to the customer) o Building relationships  Suppliers  Customers BTEC Business - 3rd April 2006 The Benefits of e-Business and Marketing A definition of marketing given by the Chartered Institute of Marketing is as follows: Marketing is the management process responsible for identifying, anticipating and satisfying consumer requirements profitably. In introducing this resource, it is important that you understand the implications of this definition. • Firstly, marketing is a process - it occurs over time and evolves. • Secondly, it is about identifying, anticipating and satisfying consumer needs. These needs are both real and imagined by the consumer. We need food to survive. We don't need chocolate-covered doughnuts, however, but a business might be interested in creating this 'need'. Identifying needs is about finding out what consumers want now; anticipating needs is about finding out what consumers might want in 2, 3, 5, 10, 20 years' time and satisfying those needs is making sure the consumer gets what they want. • Thirdly, it is about satisfying those needs profitably. This means that having identified the consumer need, a product or service can be devised to meet that need. If the cost of developing that product means that the price that consumers would have to pay is extortionate then it is likely that it would not be profitable - consumers simply would not be able or willing to pay the sort of price that might be necessary to bring the product or service to market. More and more businesses are seeing the benefits that e-business can bring. Copyright: Carl Dwyer, from stock.xchng. Definition
  • 6. e-Business refers to any form of transaction (exchange) that uses an electronic medium to facilitate the transaction. The way we pay for many of the goods and services we buy these days is a world away from that envisaged even 10 years ago! Copyright: Melodi 2, from stock.xchng. e-Business, therefore, can include the following: • Internet-based companies which operate wholly through the Internet to conduct their business. Examples are eBay and Amazon. • Companies that combine traditional business formats with information on the business provided via the Internet, for example Ikea. • Companies that combine traditional business formats with the opportunity of buying online. Examples include Marks & Spencer, John Lewis, HMV, Tesco and Argos. • Companies that collect information on customer profiles and markets and sell this information to interested parties for example Experian and Mintel. • Any device used to facilitate exchange such as 'Chip and Pin' technology, automatic ticketing, electronic ticketing, credit card transactions and so on. • Business to business (B2B) activity. • Using the opportunities that IT presents to improve the flexibility of working patterns The Benefits of e-Business There are a number of benefits to e-business but in thinking about these benefits it is essential that we make the link back to our definition of marketing in order for the benefits to be fully understood. The benefits can be summarised as: • The opportunity to reduce costs of production by reducing overheads - for example, not having a retail outlet in a busy high street location with high rents, reducing stock costs etc • The opportunity to increase sales • The opportunity to access new markets across the globe • The chance to target market segments more effectively • Provide more accurate information and improve customer service experience • Improves the efficiency of the supply chain • Improve employee motivation through more flexible working methods • Allowing 24/7 access to the firm's products and services • Provides convenience and comfort for customers Task Take each of the benefits above and try to think of a business that you are aware of where these benefits would be particularly significant and where the business would or has embraced e-
  • 7. Business. The business can be a small to medium sized local business to you, or a major multi- national - it's up to you! Let us explore some case studies of companies that use e-business strategies in different ways. 1. Saab Saab provides opportunities for customers to see what models are available and to explore different specifications and prices before ever visiting a showroom. Copyright: Erik Johansson, from stock.xchng. Follow this link to the Saab motor vehicle Web site . This link takes you to a series of pages that allow you to input information and specifications about a Saab car. Go through the steps to build your vehicle. 2. Amazon Go to the Amazon.co.uk Web site. Search for a DVD or a CD of your choice - if you have an account on Amazon it will remember you through the use of a 'cookie' - this is a method of identifying users by packaging up information you enter initially and then sending this information to the Web server. Whenever you access these or similar pages in the future, the server will send information that is more personalised.
  • 8. Shopping for a CD or a DVD can now be a more personalised and convenient experience - not to mention bringing a much wider range of artists and material to your home. Copyright: Lotus Head, stock.xchng. Once you have put in some basic information, the future pages you are given will relate more specifically to the sort of music or movies etc. that you like. 3. A Concert Venue Go to the home page for the Colston Hall. This is a concert venue in Bristol (you can probably get similar results by looking at a local concert venue near you). e-business methods allow you to be able not only access tickets without queuing but also to choose your seat. Copyright: Kelly O'Conner, from stock.xchng. The page allows you to be able to view what events are coming at the Colston Hall. You may be interested in buying a ticket, in which case the Box Office is the place to start. Not only can you buy your ticket but also specify where you would like to sit in the auditorium!
  • 9. 4. easyJet Go to the easyJet home page. Find out about the prices and availability of flights from your nearest airport to a destination of your choice. 5. British Airways Look at this page from the British Airways Web site. This page explains the benefits of e-ticketing to passengers. The use of e-Business methods allows companies such as BA to reach customers and improve the convenience and quality of the service they receive. Copyright: Marek Wojtal, from stock.xchng. In addition, once you have booked your flight (which you can do online of course) you can also manage your booking - select seats, check in online and so on. 6. HM Revenue and Customs Her Majesty's Revenue and Customs operates an Electronic Data Interchange (EDI) service for businesses throughout the UK to help them manage the payroll implications of tax, National Insurance and pension payments to HM Revenue and Customs. The software needed to be able to do this does require some initial investment but there is then a host of information that can be transferred between the business and HM Revenue and Customs. The service is especially useful for businesses employing large numbers of staff or who have high staff turnover ratios.
  • 10. Completing PAYE tax returns can present a major administration task for businesses, especially large businesses with many employees. What can e-Business offer them? Copyright: Tijmen van Dobbenburgh, stock.xchng. e-Business and Competition Apart from offering the benefits that we have explored here, there are also other aspects to e- business that firms have to consider. The Internet makes information transfer far easier and as a result, people are able to share information about goods and services and the quality of a company - wherever they are. Businesses like Amazon provide opportunities for customers to review all the products they sell to help inform other customers. There are also more dedicated sites that provide information to help consumers make decisions. Look at the following example: Tripadvisor.com. In the relevant box, type in the name of a hotel near where you live and find out what people have to say about this hotel. Information exchange is having an impact on competition - no business can rest on its laurels! Copyright: Colin Nixon, stock.xchng. Task Given the feedback that customers have given the hotel you chosen, explain how the business concerned might react to the existence of such sites in relation to the definition of marketing given at the outset. Are there ways that the existence of such information helps businesses to create new business opportunities?
  • 11. Creative Corporate Communication This resource is designed specifically for Unit 4 of the Edexcel BTEC qualification, 'Presenting Business Information'. Heineken, the fourth largest brewer in the world, announced that it was not going to advertise its product on TV in the UK from 2006 onwards. You might be forgiven for thinking that the company was somehow 'one can short of a six pack' for taking such a decision. Surely it is madness to not advertise on the most obvious medium that reaches into the homes of millions of people every year? Image: Heineken - is their decision to not advertise on TV a good example of creative corporate promotion? Copyright: Gyorvári Gábor Just stop and think for a minute about the things that you associate with Heineken. In the box below, type in a phrase that you associate with Heineken or an advert that you can remember. Press the 'Submit' button and you will be able to get a response from us to compare with your own. Can't get this question to work? Then take a look at this... If you have anything remotely similar to the comments we had, then Heineken were doing their job. Creative corporate communication is all about getting your message across to your customers. What that message is might be the starting point of discussions within the firm. The message can be communicated in many different ways. Heineken argued that with the increase in the number of TV channels, they did not feel that they could get their message across to their target market as effectively as they would have liked. As a result, they evaluated their position and felt that other ways they communicate their message were adequate and possibly more effective than running more TV adverts. Heineken are sponsors of the Heineken European Cup in rugby union. It is also one of the sponsors of the European Champions League (Amstel beer is one of its brands). It will therefore get exposure on TV through this and feels that its target market are more likely to be accessed through these sort of events rather than blanket TV adverts.
  • 12. It also believes that it needs to be more creative in the way it gets its message across. In competitive markets where there are many choices, making sure customers associate your product with their needs is crucial. Methods of Communicating There are several main methods of communicating an organisation's image with its end users. Remember that corporate identity is not just something that private sector organisations strive for; it is also very important for many public sector organisations. Mission Statements Mission statements aim to encapsulate what the business is about and what it wants to be associated and identified with. The mission statement is used not only to communicate an external identity but to bind together staff in a common culture and identity. Packaging Packaging is becoming increasingly important not just to maintain quality and to protect products but as a form of communicating messages about the company as well. Colgate, for example, now supplies toothpaste in a small container that sits easily on bathroom shelves as opposed to the traditional tubes (which are still available). What message does this send out? Logos Most organisations now have logos. The designs of these are very important. They often communicate messages that are subtle and may rely heavily on an understanding of our psychology. For example, having three parts of a company's name all in the same size and font may communicate a different message to one which has the first word larger and in a different colour to the other two. Logos are intended to ensure that the company becomes instantly recognisable even if there is no writing or words to convey the message.
  • 13. Images: Logos may contain a name but a good logo may not need any words to communicate the company, organisation or message. Copyright: Sándor Balázs, Paul Holmes, Outrequin JC and Kay Pat Livery Livery is the colour scheme adopted by a business. In many cases, the colour/s used is enough to communicate who the company or organisation is. The company may use this colour scheme throughout all its communications media to maintain consistency and raise awareness and identity. What colours do you associate with Tesco, for example? How about Sainsbury's and easyJet? What are the colours of British Airways?
  • 14. Image: BA not only use corporate colours to convey their message, it is repeated throughout all aspects of the business, from staff uniforms right through to letterheads. Copyright: Frank van den Berg Straplines This seems to be a relatively new word but has rapidly entered the corporate communication vocabulary. A strapline is a phrase or short sentence that is meant to represent the company or create awareness in customers and end users. The example of Heineken above is a case in point but there are others that are equally memorable: • 'I'm lovin' it' • 'Try something new today' • 'Reassuringly expensive' The idea of using a phrase is not new - many years ago, Kellogg's used the line 'the best to you each morning' and KitKat had 'have a break, have a KitKat' - a strapline that they still use! Endorsements Some businesses will associate themselves with a famous celebrity or personality to get a message across. The celebrity has to be carefully chosen to ensure that the sort of person chosen embodies the qualities that the firm wants to be recognised for. At the time of writing, this has been brought sharply into focus following the news about Kate Moss, the supermodel, who was alleged to have been photographed taking cocaine. Also, there are the problems faced by Burberry whose image seems to have been overtaken by 'chavs' - much to their annoyance. Put the two things together and you have the wrong message being communicated.
  • 15. Image: Burberry have been hit by the chav culture hijacking its products where youngsters embodying violence, lack of respect and anti-social behaviour have worn the famous Burberry check. Then came the news that one of its key models was taking cocaine! Copyright: Jon Wisbey Other Methods The whole point of creative communication is the idea that you come up with new ideas. Some that have been used in recent years include getting products high exposure, for example, getting a product used on a top rated TV programme, using famous songs to help sell products (remember the Levi ad?), sponsorship (see the Heineken example above) and having an online presence. In addition, many companies are using so called 'viral marketing' as a means of getting their messages across. (See the Biz/ed presentation on guerrilla marketing [369 KB].) What is important in any attempt to communicate effectively is to balance out the costs of the method/s against the exposure that is gained and the effect on sales. This is not always very easy to quantify but it must be a consideration. Clearly Heineken do not believe that the cost of putting further adverts on TV is justified and that the benefits they are gaining from their other activities are sufficient to get the message across that they want. Task In your assessment, you are required to select a corporate communication case study of your choice. In the information above, we have tried to give you a flavour of some of the more high profile businesses that you will be familiar with but you are free to choose any business or public sector organisation that you wish. 1. Describe the method/s of communication that the business/organisation has chosen. Remember to try and include the variety of communication methods outlined above. 2. Provide an analysis of the business you have chosen. Is the strategy being used successful? How will you judge that success and if it is successful what is about the communication that makes it so successful? (You can of course analyse it on the basis that it is not, in your judgment, successful!) 3. Evaluate the strategies used by your business to communicate their ideas creatively. How creative are the strategies? What other methods might they use that would improve the communication they are giving out? (You might use the guerrilla marketing ideas here.)
  • 16. You could present your ideas for the last part of the task as a presentation - you could try and incorporate video clips, sound clips and so on in your presentation. Some references below point you in the direction of clips that can be downloaded. If you do this, remember the copyright restrictions that will be in place and remember to fully reference any clip that you use. • TV Whirl • Collection of TV adverts by an advert 'fan' • Feature on viral advertising - from Channel 4 Developing a Promotional Campaign Image: The Dome will be transformed into a state of the art concert venue and the whole site will become a hub for entertainment. How will you promote this exciting new venue for London? Copyright: www.freeimages.co.uk This resource is designed specifically for Unit 3 of the Edexcel BTEC qualification, 'Creative Product Promotion'. OK - here is a real challenge to your business understanding and skills! Develop a promotional campaign for the Millennium Dome. You might think that this will be an impossible challenge given the negative publicity about the Dome before, during and after the year long period that it was open in 2000. But changing the public perception and promoting the new Dome is exactly what mobile phone firm O2 and the Anschutz Entertainment Group (AEG) are planning to do. O2 and AEG have joined forces to redevelop the Dome into an entertainment and leisure centre, which is due to open in April 2007. The centre will include a 23,000 seater concert venue, bars, clubs, restaurants, a smaller 2,000 seater music venue and a 10 screen cinema complex. The venue is expected to host 150 concerts each year and O2 and AEG promise it will be the best venue in Europe. Quite a vision I'm sure you will agree! Your job is to plan out the promotional campaign that will reignite public interest and the public perception of the Dome in preparation for the opening in 2007. The data and figures used in this resource are entirely fictional and are intended for educational purposes only - they are not based on any data that O2 and AEG might possess. To launch a successful promotion campaign a number of stages will normally be followed through. We will briefly outline what each stage entails and then give you a scenario on which to base your investigation and planning. Stage 1: What are the objectives of the campaign? A campaign brief will be issued outlining the objectives of the campaign. These should relate to what are called SMART targets - Specific, Measurable, Achievable, Realistic and Time related. This
  • 17. ensures that there is a focus to the campaign and that all involved know exactly what they are supposed to be doing and where they are going. Stage 2: Who is the campaign aimed at? This will involve identifying who the target market is going to be and this, in turn, may be related to the market segment/s that the business is focusing on. A market segment is a group of people with similar characteristics that may influence spending on the business's products. A market segment might be related to gender, age grouping, occupation, leisure pursuit, lifestyle, house type and so on. This will help to ensure that the campaign gets to the people who are most likely to benefit from it and buy the product/service concerned. Image: Ensuring the right groups of potential customers are targeted is a vital part of the preparation of a successful promotional campaign. Copyright: Sara Tusar Stage 3: What is the message? A promotional campaign is designed to try to make customers more aware of a product, brand or service. Getting the right message across is therefore important and as such making sure the message is clear and unambiguous is vital. The message may determine the type of promotional media used - TV, radio, internet and so on. In this case, the message might involve changing the perception of the Dome - the first step is the renaming of it to become 'The O2'. Stage 4: What is the budget? Most promotional campaigns will have to work within a pre-determined budget. This will give planners some idea of what they have available to spend and thus will determine the type of promotional media used. The budget might be linked to the expected returns on the project or the amount of investment being put in in the first place. Stage 5: What mix will be used? The marketing mix refers to the relative importance of price, product, promotion and place in the marketing function. For some products and services, price might be the crucial factor in determining the success of the product in other cases the product/service itself may be more
  • 18. important. The promotional campaign therefore must ensure that it focuses on what the important elements of the mix are. There are now other Ps that can be seen as being part of the marketing mix - these are people, processes and packaging making 7Ps in all! Stage 6: What is the time frame? When the campaign is scheduled to run, for how long and the long term plans need to be considered. In some cases, a campaign might initially run for four weeks and then be 'rested' to return after a few months - possibly in a different format. The time of year might be relevant, and in the case of The O2, the timeframe will be especially relevant as the development work progresses. The opening of the new venue might be a time of fevered activity and then subsequent campaigns might be needed as specific events take place. Stage 7: How is the campaign evaluated? Assessing how the campaign has gone in relation to its objectives will be essential in informing the future direction of subsequent campaigns and learning from the experiences gained. There may be a number of things that happened during the development of the campaign that will need to be addressed by the team and which will help them to not only plan new campaigns more effectively but will also help in the ongoing campaign - remember the time frame in stage 6! Image: The message about the redevelopment of the O2 might not just be about the venue itself but might also involve a focus on the impact on the surrounding area - the positive externalities. Copyright: Jeroen de Boer Your Task You will work as a team to prepare a promotional campaign for the opening of The O2 venue in April 2007. The campaign brief below gives you some background on which to base your plans. The information in the brief is fictional but some of the data has been based on market statistics. Campaign Brief The Millennium Dome was constructed for the year 2000 celebrations. It has had a difficult history. The initial plans were to use the Dome as a means of sparking regeneration in a deprived area of south London and to put on an entertainment extravaganza celebrating the new millennium. The cost of constructing the Dome escalated and there were a number of injections of cash that aroused the hostility of the general public.
  • 19. The Dome was predicted to host up to 12 million visitors but in the end only attracted 6.5 million. The public perception of the Dome is that it is a 'white elephant' that cost the taxpayer millions (£758 million) and is still doing so whilst plans for its redevelopment were negotiated. The estimated cost per year since it closed its doors to the public in maintenance and security has been £30 million. Against this backdrop AEG and O2 are taking on a project to continue the re-development of the area and the site. One of the biggest problems is going to be changing the public perception of the Dome, hence the importance of renaming it The O2 and getting this name firmly established in the public mind. The plans for a concert venue come amidst a number of criticisms about the quality of large music venues in the capital. Recently Queen played a concert at the Wembley Arena and its lead guitarist, Brian May, was critical of the state of London's concert venues. O2 and AEG have the right credentials to make this venture a success. O2 have experience in mobile technologies as well as a database of 24 million customers in Germany, Ireland and the UK. It has a widely recognised brand name and is also associated with other, similar high profile brands such as Big Brother, the England rugby team and Arsenal Football Club. Its revenue in 2004-05 amounted to £6.7 billion. AEG might be less well known as a brand but have extensive experience in entertainment promotions. It has been involved in promoting some of the most famous names in the music business including Sir Paul McCartney, U2, Elton John, The Eagles, Coldplay and the Stereophonics and has also been involved in promoting the Grammy Awards and the Treasures of Tutankhamen exhibition. AEG have already pioneered many of its ideas through its head office of the Staples centre in Los Angeles. This is a state of the art venue, which stages around 250 concerts, sporting events and conventions each year. The campaign will seek to promote awareness of this new venue and what it can offer consumers of entertainment. It is seeking to achieve a target of 150 concerts in the first year in the main arena which seats 23,000 with a sales target of 90% for each concert. In addition, there is an objective of ensuring that 45% of people in the 14 - 35 age range associate the brand O2 with the concert venue by the beginning of January 2007. The budgeted revenues for the first year is £69 million (based on 150 concert events each selling 23,000 tickets at an average price of £20). The total investment in the development is £2 billion and the promotion budget is being set at £150 million. The promotion campaign should begin in January 2006 and run at intervals through 2006 in preparation for the first events, which are scheduled for April 2007. The year before the opening is vital in ensuring that consumers become acquainted with this new venue and what it offers. E-Commerce
  • 20. Image: The opportunities for contacting customers have increased as technology has developed. E-commerce is not just for selling! Copyright: Ed Tilsley This resource is designed specifically for Unit 6 of the Edexcel BTEC qualification, 'Business Online'. E-commerce is business activity conducted through some electronic medium. This is becoming an increasingly important method for business to be involved in and many businesses will have taken the opportunity of setting up a Web site as a means of establishing a presence - electronically. It might be that this presence is merely to provide information to customers; it could be that the presence is part of the total presence the business has, i.e. it might have stores on the high street as well as a method of purchasing online. In other cases, the business might be just an online service only. Whatever form it takes, an online presence and the opportunity to do business using technology is increasingly important especially as business goes global. It is not just personal computers (PCs) that are the medium through which business can trade. The development of mobile devices such as phones and PDAs also allows businesses to be in touch with their customers 24 hours a day wherever the customer might be. The transmission of information and the range of services that can be provided are subsequently much greater and this can help a business expand. It also has risks - the competition is much greater, the speed with which customers can access information about rival firms, prices and so on is that much more efficient and just having an online presence is no guarantee to business success. Types of e-commerce There is a certain amount of jargon associated with e-commerce that it will be useful to know. • b2c - This refers to businesses engaged in servicing consumer demand directly - this could be a firm like Dixons, who now have an internet presence, or it could be a small village café. b2c refers to 'business to consumer'. Even small businesses will have to think about some element of e-commerce because they might have to think about using credit and debit card services which use electronic means of funds transfer. • b2b - This refers to businesses that service the requirements of other businesses. They will be suppliers of machinery, equipment, spare parts and other services such as payroll, insurance, banking services and maintenance. • Clicks and mortar - These are businesses that might combine high street presence with an internet presence. Some, like amazon.co.uk and lastminute.com, might be wholly dedicated to an online presence only.
  • 21. Considerations in developing an e-commerce strategy Image: Setting up payment systems can be complicated - most credit card companies will make some charge for using their services and these have to be considered along with security issues. Copyright: Lotus Head If a business is thinking of expanding into e-commerce there are a number of factors that it should consider. The first might be the need to develop a Web site for the business. This is not something that should be entered into lightly and to be effective a great deal of thought will need to go into it. You can get full details of this process in our pages on the principles of online presence. Apart from the issues involved in getting an appropriate and effective Web presence, there are many other factors to consider: • Payment systems - How will your customers be able to pay for the goods/services they want to buy? • Security - How will you convince customers that buying from you online is safe and secure? • Distribution methods - How will you get your goods to your customers - having an online presence may reduce some overheads but delivery costs can be very high especially for bulky items. Will you deliver internationally or just to the UK or Europe? If you do go international, what are the implications of such methods for tax and import licence/duties? • Maintenance and updating of the site - How will you manage the day to day running of the site? If there are problems and the site is down it can lose you potential customers! • After sales service - What measures are you gong to put in place to cater for after sales service/customer queries? What happens if a customer does not like the product - this might be highly relevant to those businesses where customers are not able to see the product before they buy? • Legal issues - What are the legal requirements involved in setting up e-commerce systems? Are you aware of the range of legal provisions you will have to satisfy? What are the rules about the use of any databases of customer details that you possess? What role does the EU play in regulating e-commerce? What is the difference between marketing your business by e-mail and SPAM?
  • 22. Task You are considering starting up a new business. You can use one that you might have been working on for other units or use one of the suggestions below. You are considering setting up purely as a Web based business and have been asked by your bank to provide a short report outlining the costs and benefits of this business model. The Department for Trade and Industry publish a range of guides regarding e-commerce that will help you in preparing for the report as well as the guidelines given above. When constructing your report ensure you meet the following: 1. State clearly the business's aims and objectives. 2. Identify the expected costs associated with using e-commerce (you are not expected to be precise in financial terms here but to give an outline only). 3. Identify the expected benefits of using e-commerce as the basis for your business model. 4. Explain how your business will expect e-commerce to help it achieve the aims and objectives of the business. References Image: Is there money to be made online from arranging travel for these fans? Copyright: Ingrid Müller The following Web sites might give you some further information on which to base your report: • China 'yet to embrace e-commerce' - from the BBC • Statistics on e-commerce - from the Office for National Statistics (ONS) • Briefing paper on e-commerce - from the Institute of Development Studies Suggested business ideas • A business selling details of concerts, plays, leisure activities, clubs and pubs to young people in the 18-35 age group. This business has tailored information depending on where the customer lives. • A business that searches databases from local newspapers around the country and puts car sellers in touch with car buyers. Car buyers pay a small registration fee to join for the duration of their search and the business takes a commission if a deal is made. • A business selling hard to find CDs and DVDs in fringe genre music and media. • A travel business dedicated to helping sports fans journey to sporting events more easily. This business will make all the arrangements for you including cheap accommodation. All
  • 23. you have to do is tell them where you want to go, where you are starting from and what the event is. Explanation of the Internet and the WWW: How Does it Work? This resource is designed specifically for Unit 6 of the Edexcel BTEC qualification, 'Business Online'. Aim The aim of this section is to generate an understanding of how the Internet works and the difference between the Internet and the Web. What is the Internet? Image copyright: Carl Dwyer, stock.xchng Very simply, the Internet is worldwide collection of computers all connected together to form a huge network. These computers communicate with each other through a set of common software standards known as protocols. These protocols allow the sending and receiving of emails; viewing of Web pages; the transfer of files between one computer and another; instant messaging with other users, etc. In order for these protocols to work there must be a way of identifying each machine connected to the Internet. Each machine connected to the Internet has an address known as an Internet Protocol address (IP address). The IP address takes the form of a series of four numbers separated by dots, for example: 123.45.67.890 With this in mind, what happens when you type a Web page address into your Web browser? 1. A user types in the address http://www.bized.co.uk into a Web browser (for example: Microsoft Internet Explorer or Mozilla). 2. The Web browser sends this information to a program called a name server. Usually this program is running on a computer operated by the people who provide you with an Internet connection (your Internet Service Provider or ISP). Part of the sign up process with an ISP involves 'telling' your computer the location of the name server - usually the setup software from the ISP does this for you so you are rarely involved with the setup. 3. On receiving the Web address the name server may communicate with other name servers running on computers all over the world. The name servers associate the Web address with an IP address. 4. This IP address is then returned to the Web browser. 5. On receiving the IP address the Web browser now knows the precise address of the computer it needs to connect to in order to receive the appropriate Web page.
  • 24. In the above description the Web address is an example of a hostname. Name servers turn/resolve these hostnames into IP addresses refering to computers on the Internet. The network of programs and information sources that allow the resolution of hostnames is known as the Domain Name System (DNS). Although the example referred to a Web address the process is the same for establishing where to deliver email or setting up file transfers between different computers. What is the World Wide Web? The World Wide Web (WWW, W3 or just Web) was invented by Sir Tim Berners-Lee and is an information system that allows users to view documents (called Web pages) using a piece of software called a Web browser. These Web pages are located on computers all over the world (connected via the Internet); these computers all run software known as a Web server (the most commonly used is called Apache) which waits for requests for Web pages (as outlined above), processes the request and sends the requested page back to the Web browser. These Web pages contain links to other related documents. It is these links between documents that give the Web its name. The links work because every document on the Web is referred to via a Universal Resource Locator or URL (although the more modern/correct practice is to use the phrase: Uniform Resource Identifier or URI instead, the reasoning behind this is out of the scope of this BTEC resource). The URL for this page is: http://www.bized.co.uk/educators/16-19/business/marketing/lesson/internet1.htm The specific parts of this URL are: http:// - stands for HyperText Transfer Protocol. You'll remember that the Internet is made up of computers communicating with each other through standard protocols. HyperText is one such protocol and is the one used to transfer Web pages. www - the name of the computer/server on which the files you are requesting reside. bized.co.uk - the domain/host name. The .ac.uk part means this domain name is for an academic organisation in the UK. Other examples include .com = intended for commercial organisation (but not exclusively so), .gov.uk = UK government, etc. /educators/16-19/business/marketing/lesson/ - directory/folder path on the Web server. internet1.htm - the filename for this page. Task 1 An April 2005 survey suggested that the Web is made up of over 62 million Web servers. • Given the size of the Web what problems may a business face when promoting a new Web site? • How might the business overcome these problems? Guerrilla Marketing - Lesson Plan: 2-3 x 1 hour lessons A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal with Guerrilla Marketing and are relevant to the following specifications: • AQA: Module 1, 10.3 and and Module 4, 13.3 • Edexcel: Unit 2, Section 4 • OCR: Module 2872 and 2874
  • 25. Aim: The purpose of this series of lessons is to encourage students to look at new approaches to advertising that are increasingly being adopted not just by smaller firms, but also by larger corporations. There is a misunderstanding amongst some businesses, it seems, about the real nature of guerrilla marketing - it is not, according to its proponents, an excuse to be tasteless, crass and 'upfront' in your advertising style. Instead, they point to the energy and enthusiasm needed by guerrilla marketers in building relationships, networks and contacts that help to spread the message about their business. The Activity is to get students to look at the potential benefits to a small company of using such tactics in comparison to more traditional methods of advertising. Learning Objectives: At the end of the lessons, students should: • Be able to give a clear definition of the meaning of the term 'guerrilla marketing' • Understand the strengths and limitations of guerrilla marketing tactics for a firm • Understand the limitations of the use of such tactics • Be able to apply guerrilla marketing methods to different business types • Demonstrate analysis and evaluation skills through the medium of a report Resources: • PowerPoint Presentation - Guerrilla Marketing [369 KB] (basic version also available for quicker download [135 KB]) • Mind Map - Guerrilla Marketing • Activity - Guerrilla Marketing • Projector and PC • PCs for student research • Interactive whiteboard (optional) Lesson Structure: Lesson 1 It is important for the success of the Activity that students have a thorough understanding of the meaning of 'guerrilla marketing'. The use of the Powerpoint Presentation on this technique will be an important starting point. 1. Begin the lesson by asking students to note down as many types of advertising as they can think of. (5 minutes) 2. Ask questions to get students to think of the advantages and disadvantages of the methods they have identified - these can be noted down on a large sheet of paper and put up around the room for later reference or noted on the 'flip chart' feature of an interactive whiteboard if one is available - the notes can be printed off at a later stage for the students to refer back to. (15 minutes) 3. Pose the questions - 'How does a business increase the likelihood of its advertising being a success?' and 'How does it know when its advertising has been a success?'. Discuss the
  • 26. student responses - the aim is to get them thinking that just because a firm advertises it does not necessarily guarantee success and that advertising has to be appropriate. This is designed to take students away from the often given response to the request to suggest a strategy to solve a business's problems that they can simply advertise and the problems go away. (10 minutes) 4. Next, bring the students to an understanding that small firms may be at a significant disadvantage given a lack of advertising budget - so ask them how small firms could advertise effectively. (10 minutes) 5. Show the Presentation and spend time discussing the concept of guerrilla marketing and the implications for a business of such a method. (15 minutes) 6. Review the outcomes of the lesson. (5 minutes) Lesson 2 1. Review the key points from the last lesson regarding traditional and guerrilla marketing methods. (10 minutes) 2. Set students the task of looking at the four sites given in the Activity - the aim is to give them an insight into the range of methods employed by guerrilla marketers and the potential advantages and limitations of these methods. (35 minutes) 3. Discuss the outcome of the students' research and outline the task. (15 minutes) Lesson 3 1. Review the task and the learning objectives. (5 minutes) 2. Set students on the task. (55 minutes) Guerrilla Marketing - Mind Map Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version.
  • 27. View larger version of the mind map. • Principles o Presence o Activity o Energy o Networks o Smart • Non-traditional advertising methods o Use of the Internet o Pop-Up ads o Use of Internet technology (e.g. log details) o Word of Mouth  Roach Baiting  Undercover Marketing  Live commercials o Stickers o Badges o Web logs (Blogs) o Free consultations o Demonstrations o 'Illegal' methods  Bill stickers
  • 28.  Spray paint logos  Graffiti Ads o Generating mystery or intrigue o SMS Messaging o Peer marketing • Advantages o Flexible o Low Cost o Targeted o Simple Market Analysis - Lesson Plan: flexible timing A series of 'off the shelf' lesson plans and resources for use in the classroom. This lesson deals with Market Analysis and is relevant to the following specifications: • AQA: Module 1; 10.1 • Edexcel: Unit 2, section 1 and 3 • OCR: Module 2872 Aim: This lesson serves as an introduction to the marketing function of a business and seeks to cover a range of factors relating to market analysis. The lesson begins with an introduction to the notion of market analysis via the use of the PowerPoint Presentation and the Mind Map. This provides the background to the key terms introduced, which students will be further investigating later in the lesson. The students are then directed to Biz/ed's Business Profiles, where they are given a structure to analyse the market for one of the companies. Students can select a company of their own choice. The questions serve as the guide to the analysis: some answers will be easily available through the relevant Business Profile or through the company Web site; other questions will prompt students to spend more time thinking through the implications of the information they have read. Learning Objectives: At the end of the lesson, students should understand the following: • The meaning of the marketing function • How markets are broken down by businesses to help target their activities more successfully • The meaning of the term 'market positioning' • The meaning of the term 'market segment', appreciating its diversity • How a business can target a market segment or combination of segments and apply this knowledge to a specified business case • How the market structure and the market share influences the marketing function
  • 29. Resources: • PowerPoint Presentation - Market Analysis [244 KB] • Mind Map - Market Analysis • Activity - Market Analysis • Projector and PC • PCs for student research Lesson Structure: 1. Introduce the issue of marketing by asking students what they think marketing is - many will possibly refer to 'advertising'. Consider the responses and discuss the outcomes - arrive at a definition of 'marketing'. (The process whereby a business seeks to identify and assess the needs of its customers and find ways of meeting those needs profitably.) 2. Use the PowerPoint Presentation to identify the main point in market analysis - the process whereby a business seeks to understand the market/s it is operating in and to assess how this information can help it to address customers needs more effectively. 3. Outline the task using the Activity and stress the learning outcomes of the Activity. 4. Monitor students' progression through the Activity 5. Discuss the results that students have come up with. Draw comparisons and contrast with the different companies and the different market structures they are operating in. 6. Reinforce the learning objectives by doing a short question and answer session or get students to write short sentence answers to the learning objectives above. Market Analysis - Mind Map Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version.
  • 30. View larger version of the mind map. • Market Position o Market Niche? o Market Leader? o Market Follower? o Market Challenger? • Market Objectives o National Growth o International Growth o Ethical Objectives o Market Share o Consumer Focus o Product Focus o Image o Social Responsibility o Revenue Maximisation • Shareholder Value • Overcome Competitors • Which Segment? o Mass Markets o Multiple Segment o Single Segment • Market Segments; See also: Which Segment? o Age o Religion o Gender o Income Level o Lifestyle o Ethnic Grouping o Social Class o Registrar General's Grouping o Institute of Practicioners in Advertising (IPA) Grouping o Geographical region o Family Circumstances • Behaviouristic • Market Structure o Highly Competitive? o Imperfect Competition?
  • 31. o Oligopoly? o Duopoly? o Monopoly? The Marketing Mix - Lesson Plan: 2 x 1 hour lessons A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal with the Marketing Mix and are relevant to the following specifications: • AQA: Module 1, 10.3 • Edexcel: Unit 2, Sections 3 and 4 • OCR: Module 2872 and 2874 Aim: The purpose of these lessons is to encourage students to apply knowledge of the marketing mix to a variety of real life products and services. The intention is that students should take what they know and use that information in developing an understanding of the blending of the elements of the marketing mix. It also aims to develop the ability to make judgements, given that the student will have to think about the relative importance of the elements of the mix and the way in which different products and services are marketed. The inclusion of services in the list of potential sources of investigation is designed to get students thinking about the impact of the 'additional' three Ps - people, process and physical environment. The outcome of the Activity can be in the form of a written summary for formal assessment, or the summaries can be passed round the group for discussion and comment, focussing on why students had different interpretations of the importance of the elements of the mix. Learning Objectives: At the end of the lessons, students should: • Understand the meaning of the 7 Ps in marketing • Understand the necessity of blending the elements of the marketing mix to achieve marketing objectives • Be able to apply judgement in placing significance on the elements for a variety of products and services Resources: • PowerPoint Presentation - The Marketing Mix [330 KB] (basic version also available for quicker download [260 KB]) • Mind Map - The Marketing Mix • Activity - The Marketing Mix • Projector and whiteboard • PCs for student research • Sample product pack
  • 32. Lesson Structure: Lesson 1 1. Begin the lesson by showing students the sample product pack. This can be from any commonly-used product - cereal packet, drinks carton, confectionery, etc - and ask students to note down what they think are the most significant features about the product. What comes to their mind about the product? The aim is to begin with what students know and recognise and then build the theory around this. (10 minutes) 2. Highlight the key points from students' comments under the categories of price, product, promotion, etc on the whiteboard - briefly introduce a definition of 'the marketing mix'. (5 minutes) 3. Go into further detail on the nature of the mix by introducing the PowerPoint Presentation. Discuss the key elements in relation to the sample product used earlier during the Presentation. Pose open-ended questions asking students to make judgements about how important the element is to the sample product used and to justify their comments. (25 minutes) 4. Point students to the Activity - the first 'example product' should be worked on in the remainder of the lesson. (15 minutes) 5. Review the main points arising from the lesson and remind students of the task in the next lesson. (5 minutes) Lesson 2 1. Review the main points from the last lesson and remind students of the task in the Activity. (5 minutes) 2. Set students on task. The remainder of the structure will depend on the method of feedback and assessment chosen. If the educator is not expecting a written submission, use the students' work as the basis for discussion as outlined in the 'aim' section above. Marketing Mix - Mind Map Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version.
  • 33. View larger version of the mind map. • Product o Design o Technology o Usefulness o Convenience o Value o Quality o Packaging o Branding o Accessories o Warranties • Promotion o Special Offers o Advertising o Endorsements o User trials o Direct mailing o Leaflets/posters o Free gifts o Competitions o Joint ventures • Place o Retail
  • 34. o Wholesale o Mail order o Internet o Direct Sales o Peer to Peer o Multi-Channel • People o Employees o Management o Culture o Customer Service • Process o Especially relevant to service industries o How are services consumed? • Physical Environment o Smart o Run-down o Interface o Comfort o Facilities • Price o Strategies:  Skimming  Penetration  Psychological  Cost-Plus  Loss leader, etc. Marketing Tactics This resource is designed specifically for Unit 5 of the Edexcel BTEC qualification, 'Business Enterprise'. Many students see marketing and advertising as being the same thing. Advertising is certainly part of marketing but in reality it is likely to be a small part of the marketing tactics employed by a business. It is really important therefore to ensure that you have a clear understanding of what marketing means. The following definition will be used as the basis for the work in this resource. Marketing is the process by which customer needs are anticipated and identified. Ways are found of meeting those needs at a price that consumers are prepared to pay and which allows the business to make a profit.
  • 35. Look at this definition really closely and you will see that it really does involve a whole lot more than just advertising. Image: Having impressive adverts may be a useful marketing tactic but the role of the marketing function involves much more than this. Do customers recognise the brand? Is there a unique selling point (USP) that can be used to differentiate your product or service from another? How will the firm manage its cash flow? All these factors and more are part of the tactics that are used in the marketing function. Copyright: Gunter Hofer To tell the story of the role of the marketing function in a business, we are going to follow through what might have happened in the marketing of a major new chocolate bar. As an example, you can get some background to the launch of the Fuse bar from the Cadbury Web site. We will try and put some more flesh on this story to show how marketing tactics could be developed. Your task at the end of the process will be to apply this knowledge to another product - it can be something real that has just been launched or something you make up! You will have to present your tactics in the form of an oral presentation and you will have to be prepared to have questions asked of you by your peers. This form of assessment is part of what you will have to do to earn a merit in unit 5. 1. Assessing the market The market for chocolate bars is highly competitive. There are a small number of large firms in the industry - Mars, Cadbury, Nestlé and Suchard being the most well known. Many of the brands in the market have been in existence for a long time and have a high amount of brand loyalty. Openings for new products therefore are limited. There are many examples of products that have been launched and which have been withdrawn because they could not sustain long-term sales success. Can you remember the Prize Bar, Aztec and Junglies? The market for certain types of chocolate bar has changed in recent years. The growth of the so - called 'count-line bar' (shaped like Mars bars) became popular as people ate chocolate on the go as opposed to sitting down in a room with a traditional bar of chocolate. Companies had to respond to these changes. Rowntree (now owned by Nestlé) changed the shape of their Aero bar and Cadbury brought out a rival bar called Wispa. Both of these were designed to exploit this growing market. The market is still changing but using chocolate as a snack as opposed to sharing a bar amongst a family or giving chocolate as a gift is still a growing part of that market.
  • 36. Task Do some research on the market for chocolate. Who are the main businesses involved? What are the main brands? What are the relevant market shares of different brands and manufacturers? How has the market changed in recent years? A visit to a local supermarket or corner shop might help here but there are also a number of Web sites that will be relevant: • Mars • Cadbury Schweppes • Nestlé • Suchard 2. Identifying a gap in the market Once the market has been analysed it might become clear that there is a gap in the market. What this means is that there is an identifiable customer need that is not currently being met by an existing product. It could also be where a rival might have a presence and where the company concerned believes it could offer a competitive alternative. Market research which, in many cases is on-going, will have given the business some idea of the nature of the market and the extent of the possible market. It may be that further research is used to target particular market segments that the business feels will be the ones most likely to purchase this product and what it is they want out of the product. Much of this will be used to inform the marketing mix. Image: There are lots of people in any market but identifying who are the most likely groups to buy your product informs different aspects of marketing tactics. Copyright: José A. Warletta Task What do you think will be the most likely market segments that a business like Cadbury developing a new chocolate bar would target? Ensure that you justify your answer. Explain the meaning of the term 'marketing mix' and describe how the market research collected might inform decisions on the mix for a new chocolate bar.
  • 37. 3. Developing the product Quite often businesses in this particular industry want to develop a 'brand personality'. What this means is that they will want consumers to associate something specific with the product. KitKat for example is associated with a 'break' making it the perfect accompaniment to a cup of tea or coffee. The personality of the product will be in line with the market research and analysis carried out. The ingredients, the look of the product, its texture when eaten, its name and packaging and how it will be promoted will all be key factors that will be informed by the development of the brand personality. A very good example of this process is the development of Yorkie. Yorkie was developed as a contribution to the count-line bar market. It aimed to use the concept of a chunky chocolate bar but in a different format to allow it to be eaten on the go. The key thing to emphasise was the chunky nature of the chocolate and to do that Rowntree developed its early marketing around the length of time it would last and it being an ideal accompaniment for long journeys. The trucker image stuck and gave the bar a 'masculine' personality. In recent years this has been exploited with a deliberate campaign suggesting that it is so chunky it is 'not for girls'! Image: Yorkie - originally associated with truckers but now developed along the same masculine lines - this is a bar not for girls! Copyright: Michael Sellwood Task Think about the product you are going to develop. What sort of brand personality is it going to have? Seductive, romantic, sexy (think of the Flake adverts?), youthful, a product for those on the go, a quick break product, light, filling, energy giving, masculine, feminine and so on. Think of the sort of catch phrase that might be used to capture this type of product personality (for example: 'Have a break, have a KitKat'; 'A Mars a day helps you work, rest and play'; 'A sweet you can eat between meals without ruining your appetite' (Milky Way), 'Bite it and believe' (Wispa)). This should also help you to begin thinking about the type of ingredients in your product, what it will look like and how you might develop the promotion of the product and how it will stand out in the market. 4. Product testing Once these stages are gone through, the product is likely to have to be tested. People may be given choices of different names or different packaging prototypes to see what consumer reaction is.
  • 38. It may be that this type of problem has been resolved at an earlier stage in which case more substantial user testing may be used by virtue of a test-market. This may be a selected region of the country where there is a profile of users that is representative of the country as a whole. Using test markets gives relatively accurate feedback but is also much cheaper than a national launch, which might not see the product doing as well as anticipated. Remember, that to feed a market the capital investment has to be there to back it up and if the test market showed that the product was going to be very popular the business would have to ensure that sufficient capacity was available prior to a national launch. You would certainly not want to have a product launched and people not be able to get hold of it! Image: User testing is an important aspect of marketing strategy - it gives a good idea of the likely market reaction without incurring the costs of a national launch. Copyright: Nick Benjaminsz 5. Launch All these stages in the development of the product will have required significant investment. The sums of money involved in developing new products can be large and of course the hope is that once launched the product will begin to start repaying some of that investment. In its early stages however, the product will need further expenditure to support it and make sure that customers know about it. For chocolate bars the secret is to get people trying it but to follow that up by buying it again, and again and again for many years. In other words repeat purchases are essential in a fast moving consumer goods market. During this early stage managing the cash flow of the product will be important. This will mean balancing the returns of the product from sales with the on-going costs of production and marketing. If these get out of balance the future of the product will be called into question and it may be worthwhile pulling the product before any further costs are incurred and 'cutting your losses'. To manage the launch and development of a product, therefore, marketing tactics will really come to the fore. It will be important to keep a close link with consumers to find out what they think and also to keep the brand in their horizon amongst the competition. Sometimes this might be something simple like getting your product displayed prominently in shops so that impulse buyers select your product or customers are drawn to your product at the expense of rivals. This in turn will mean having sales people with good relationships with retailers. Finally, maintaining cash flows in the short term will also be determined by the success of the advertising and promotional campaigns that are developed. Does the firm go for traditional TV ads along with ads in magazines and billboards or does it go for more guerrilla marketing techniques
  • 39. to raise awareness? Should it have an online presence - many branded products have Web sites of their own, for example? These are all important factors to consider and the launch of the product does not mean the job is done! Task How might you use product portfolio analysis and the Boston Matrix to analyse the current position of your product and manage its cash flow? The Presentation on Product Life Cycles and the Boston Matrix [197 KB] will be of help. Why might you use guerrilla marketing tactics as opposed to traditional marketing strategies to promote a new product such as a chocolate bar? See the Presentation on Guerrilla Marketing [378 KB] for help here. Final Task Remember for part of the assessment for this unit you will have to deliver an oral presentation outlining your marketing tactics for the development of a new business venture. The aim of this activity has been to give you a framework around which you can develop this. You can put the tasks together in order to do this. Remember that you will have to answer questions on your presentation. To get to distinction level you will have to be able to evaluate the viability of the product you develop. This means not simply assuming that it will be a rip roaring success but really looking at the steps you have gone through. You need to ask whether the product really is that much different to what is already on the market and whether it will really be a long term success. Good luck. Market Power, Competition and Regulation - Lesson Plan: 4 x 1 hour lessons A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal with Market Power, Competition and Regulation and are relevant to the following specifications: • AQA: Module 3, 12.2 • Edexcel: Unit 1, Sections 1 and 4 • OCR: Module 2871 Aim: This could cover three or four one-hour lessons, with at least two of the lessons being devoted to the research activity and preparation, whilst the third or fourth could be devoted to the presentations themselves. Some time will need to be spent at the outset explaining the context - the Presentation and Mind Map should be able to cover the main areas here. There is a good deal of background information and students need to be aware that an outline knowledge only is required of the legal framework rather than any details of the relevant Acts of Parliament. The aim of the Presentation is to give students some understanding of the sheer volume of legal and regulatory powers that cover business and to impress upon them that such powers are a force for good. However, it also aims to show the disadvantages in terms of the
  • 40. added cost burdens that businesses have to face in complying with and monitoring these laws and regulations. It can be a useful ploy to get an outside speaker from a local business to explain how such regulations and laws impact on their business - question and answer sessions are useful to explore this further. If this proves difficult, the Principal or Head Teacher could well be a valuable substitute in covering the range of legal and regulatory instruments that affect a school. Another strategy could be to use students' own experiences of their work environments and how rules and regulations affect how they work. Such a ploy is very important in helping to place known experience into the context of the studies being undertaken and works from the basis of what students know. After the initial discussion, the research activity can begin. The Activity does warn against getting too much information; the sites that have been highlighted give all the information that is necessary for the successful completion of the Activity but students will have to learn to be selective. Working in groups is recommended here but care needs to be taken to ensure that all students in the group are on task and have something valuable to do and contribute to the presentation. Students can be guided to the importance of presenting their ideas effectively - many will use a PowerPoint presentation but it is important they understand that merely reading out what they have put on the screen insults the intelligence of their audience! Such skills are important parts of the learning process and this Activity seeks to help develop those skills. If the task is to form part of an assessment then the ability to present and communicate the ideas and points successfully can be built into the assessment or used as possible evidence in a key skills programme. Videoing the presentations can be useful in helping students to see how they thought they presented! The outline for the lessons therefore is less prescriptive than we have given in the past and is designed to offer maximum flexibility but the outline below is a rough guide. Learning Objectives: At the end of the lessons, students should: • Understand the meaning of the term 'regulation' • Understand the scope of the regulatory authorities in the UK • Understand the range and implications of the legal framework as it affects business • Demonstrate key research skills - selection, organisation and synthesis • Have prepared and given a presentation to peers using appropriate methods Resources: • PowerPoint Presentation - Competition, Legislation and Regulation [73 KB] • Mind Map - Competition • Activity - Market Power, Competition and Regulation: Anti-Competitive Behaviour • Access to PCs for students for research • Speaker as appropriate • Projector/PC
  • 41. Lesson Structure: Lesson 1 1. Introduction to the topic area: o Use of Presentation/Mind Map o Use of a visiting speaker/Principal/Head Teacher o Discussion session with students on their own experiences 2. Explain the task - the task can be printed out to give to students or they can be directed to PCs where they can follow the process 3. Decide which group is going to tackle which case - groups can be given more than one - there is a significant amount of choice 4. Begin the research task Lessons 2 and 3 Continue research task and develop presentation. Lesson 4 Each group offers its presentation. Time should be set-aside at the end of this lesson or at the beginning of the next lesson to discuss the learning outcomes of the Activity in relation to the learning objectives above. Competition - Mind Map Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version.
  • 42. View larger version of the mind map. • Self Regulation o PCC o Portman-Group o BMA • Legal Framework o Weights and Measures o Sale of Goods o Trade Descriptions o Trading Standards o Environmental Health o Employment law o Food Safety o Consumer Protection o Labelling o Data Protection o Hazardous substances o Disability rights • Market Structure
  • 43. o Perfect Competition  Many buyers and sellers  Identical products  Perfect knowledge  Price takers o Imperfect or monopolistic competition  Many buyers and sellers  Differentiated products  Some control overprice o Oligolpoly  Concentration ratio  Industry dominated by small number of large firms  Price Stability?  Non-Price Competition  Collusion? o Duopoly  Industry dominated by two large firms  Price leadership o Monopoly  Firm = industry  Natural monopolies  25% + Market Share  Potential for exploitation • Advertising (ASA) • Competition Commission See also: Competition • OFT • Regulation o The Regulatory Reform Act 2001 o Patents o Licences o Standards o Health and Safety o Planning o Competition o Former State Owned Monopolies (Of...) Market Research - Lesson Plan - 2 x 1 hour lessons A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal with Market Research and are relevant to the following specifications:
  • 44. • AQA: Module 4 • Edexcel: Unit 4 • OCR: Module 2880 Aim: The subject of market research, in particular the relevance of secondary research, forms the basis of the Activity associated with this lesson. The information given is from the Global New Products Database, published by the consumer intelligence providers and consultants Mintel. Students are asked to look at the information and make connections with a selected list of relevant companies. Some of the information provided may be very useful for such companies; others may be of little benefit unless there is the opportunity of accessing new markets. The aim is for students to think creatively as well as to gain a greater understanding about how such companies might use secondary information in developing marketing strategies. Permission to use the information has been kindly given by the Mintel organisation. There have been a number of related articles on Biz/ed, for example, the impact of the Atkins Diet on businesses. Students may wish to refer to these for additional support (see In The News - Demand and Diets and Technology and Changing Social Attitudes - Activity). Learning Objectives: At the end of these lessons, students should be able to understand: • The difference between primary and secondary market research • How secondary research may be used by a business to help inform its marketing decisions • The importance of having other information on which to base marketing decisions • The limitations of market research in developing marketing strategies Resources: • PowerPoint Presentation - Market Research [194 KB] • Mind Map - Market Research • Activity - Market Research • Projector and PC • PCs for student research if required • Video with pre-recorded selection of two sets of TV adverts (4 minutes) or a selection of magazine adverts Lesson Structure: Lesson 1 1. Introduce the concept of market research by brainstorming methods by which companies gather market information - use the students' own knowledge as the starting point for the lesson and seek to develop understanding from this base. (10 minutes) 2. View the pre-recorded adverts - ask students to note the company and the brand being considered in the advert and the message of the advert. (10 minutes)
  • 45. 3. Discuss the reasons why companies might want to gather market information - encourage students to think of specific examples of products and services linked to the TV adverts. (15 minutes) 4. Introduce a more formal approach to the subject through the PowerPoint Presentation. (15 minutes) 5. Introduce the Activity and go through the Mintel data explaining the task for the next lesson. (10 minutes) Lesson 2 1. Re-cap on the main points drawn from the last lesson. (10 minutes) 2. Set the task and go over the questions outlining the main learning objectives of the exercise. (5 minutes) 3. Set students to work on the task. (40 minutes) 4. Re-cap on the main findings by the students/collect in the written task. (10 minutes) Market Research - Mind Map Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version. View larger version of the mind map. Market Research 1. Primary Research 1. Questionnaires 2. Focus Groups 3. User Groups 4. Postal Survey 5. Telephone Surveys 6. Customer Interviews 7. Test Markets
  • 46. 8. Technology - Internet feedback 2. Secondary Research a.Internal Sources 1. Company Accounts 2. Internal Reports and Analysis 3. Stock Analysis 4. Retail Data - loyalty cards, till data, etc. b.External Sources 1. Gov't Stats (ONS) 2. EU - Euro Stat 3. Trade Publications 4. Commercial Data - Gallup, Mintel, etc. 5. Household Expenditure Survey 2. Sampling Methods 1.Random Samples 2.Stratified or Segment Random Sampling 3.Quota Sampling 4.Cluster Sampling 5.Contact or 'Snowball' Sampling 6.Multi-Stage Sampling 2. Purpose 1.Size of market 2.Market Trends 3.Forecasting 4.Planning 5.Evaluation of Strategies/Promotion 6.Assessing Marketing Mix 7.Identifying Market Segments 8.Identifying Consumer Needs 9.Identifying Competition 3. Identifying Opportunities/Gaps in the Market 4. Reduce Risk Mergers, Takeovers and Product Differentiation This resource is designed specifically for Unit 29 of the Edexcel BTEC National qualification, 'Business and Markets'. Aim: The aim of this resource is to enhance your understanding of integration in business. By the end, you should be able to: • Identify the types of integration that takes place in markets • Understand the difference between horizontal and vertical integration
  • 47. • Identify the main types of economy of scale Resources: • PowerPoint Presentation - Mergers and Takeovers [55K] Activity: There is over-capacity in the global car industry. This means that there are too many firms with factories producing too many cars for which there is insufficient demand from consumers to buy. In the face of such market conditions, car manufacturers have to decide how to operate. Should they cut production and rely on strong branding or reputation to survive, or should they become more aggressive in the market, perhaps buying up rival companies in an effort to be 'the last one standing'? In this Activity we look at the strategy of General Motors, as they attempt to retain their status in the market. General Motors' (GM) Expansion Strategy GM is a mass market car producer and US multinational. The company owns Saab, a Swedish upmarket car maker, who when they wanted a new small car, without the development time and cost that is usually involved, turned to Subaru, a Japanese manufacturer. GM also owns 20% of Fuji Heavy Industries, who are the owners of Subaru. Now that's what you call 'globalisation'. The upshot is that the Saab model that came out in 2004 was produced in record time. But then, the new Saab was expected to be a very similar car to the Impreza, Subaru's rally-inspired saloon. This has been the deliberate policy of GM: to buy up small stakes in rival car producers' businesses. In fact GM have spent nearly $5 billion in recent years, following this strategy. The following table illustrates the policy in detail: Image: The Subaru Impreza STi. Copyright: Tim Spence, stock xchng Company Date Strategy Suzuki (Japan) 1998 onwards Long-standing links with GM who bought a 3, then 10, then 20% stake Isuzu (Japan) 1998 Long term alliance led to GM paying $420 m for business Subaru (Japan - Fuji Heavy Industries) 1999 20% stake worth $1.5bn held in Subaru's parent company Fiat Auto (Italy) 2000 20% stake bought for $2.4 bn Daewoo Motor (S Korea) 2003 42% stake held by GM In addition, GM bought Saab outright. It had previously owned 50% of the Swedish firm.
  • 48. Senior management from Daewoo and General Motors meet to sign an agreement on General Motors acquisition of parts of Daewoo. Title: General Motors Corp and Daewoo Motor Sign Agreement. Copyright: Getty Images, available from Education Image Gallery Why has GM embarked on such a strategy? What are the benefits that the company expects to flow from building strategic alliances with smaller competitors? Here we list some of the key advantages: • Joint production of engines and new models saves costs • Production economies of scale • Managerial economies of scale • Technical economies of scale • Speedier development times GM is not alone in this strategy; many of the other large car makers have started similar projects. • Daimler-Benz took over Chrysler and also control Suzuki and Mitsubishi • Renault and Nissan merged in 1999 and bought Samsung in 2001 • Ford owns Volvo cars and Land Rover But these have tended to be outright takeovers or mergers, involving greater cost and commitment from the predator firm. GM's policy has been to acquire parts of smaller competitor car makers. Their aim has been to achieve a better 'fit' between themselves and the smaller firm. These so-called 'synergies' between the two companies in a merger/takeover enable the predator firm to broaden the base of its product range, so that it has a car for every segment, or type of customer, in the market. These products can then be given the merged company's 'brand' (reputation for quality, status in the marketplace and so on), and can therefore appeal to the different target customers. This process of 'differentiation' is one of the key ways in which firms compete in oligopoly markets. The advantages that can flow from GM's plan are not guaranteed, though. There can be big problems that acquisitive firms can have with mergers and takeovers. This is recognised by GM. Their chairman and chief executive, Rick Wagoner, was quoted as saying that it only needs a few successful results to prove the value of their strategy. Out of 30 joint projects between GM and Subaru, 20 didn't work out, he estimated.
  • 49. Conclusion There has been significant structural change in the car production industry in recent years. The EU certainly expects this to continue in the near future. On its Europa Web site, the EU reckons that the six existing global car manufacturing companies (GM, Ford, DaimlerChrysler, Toyota, Volkswagen, and Renault-Nissan-Samsung) are likely to become stronger, as they continue to extract savings from their strategic alliances with the likes of Fiat, Mitsubishi, Subaru, Isuzu and Suzuki. The analysis goes on to assert that three other car firms are likely to continue outside these alliances: BMW, Honda and PSA (Peugeot and Citroen). Task 1. Assign students in groups to each look at one of the merger examples below. 2. Carry out research and prepare a presentation to be made to the whole group. 3. The groups looking at merger examples 3 and 4 (Procter & Gamble/Gillette and Morrisons/Safeway) can carry out further Web or newspaper research into the outcomes of the cases. Merger Examples 1. Cameron Balloons merger worksheet 2. At your Leisure feature on Procter & Gamble and Gillette 3. Symantec in $13bn Veritas merger - from the BBC 4. Mind Your Business feature about Morrisons' takeover of Safeway, also In The News feature on the same story 5. Mergers and Takeovers - In The News feature on various recent takeovers. Pricing Policies, Quality, Adding Value and Advertising This resource is designed specifically for Unit 11 of the Edexcel BTEC National qualification, 'Introduction to Marketing'. Aim: The aim of this resource is to enhance your understanding of pricing in business. By the end, you should be able to: • Identify the use businesses can make of demand analysis • Understand different types of pricing policy that firms can adopt • Identify and analyse how added value can affect price • Understand how advertising can be used to differentiate products and charge premium prices Resources: • PowerPoint Presentation - Pricing Policies, Quality, and Adding Value [71 KB]
  • 50. Activity: In the battle for consumers' spending in the retail fashion market, we often wonder what justifies a three or four figure price tag. How can something designed for people to wear really be worth the value some retailers put on the item? Sometimes, though, the link between the price you pay and the cost of the raw materials can be clear. The BBC article Australian Sheep Spin Riches looks at the richest herd of sheep in the world - one that has recently produced the most expensive bale of wool ever. Task 1 1. What justification is there for the world record sheep wool price? 2. In what way is the concept of 'added value' going to apply to the herd's wool? 3. In which shops would you expect to see the results of this added value? Contrast this to the way UK shoppers are often told that the food retailing industry (dominated by the supermarkets) is delivering what we demand of them, by way of lower grocery prices. A Friends of the Earth Press Release on Supermarket Mergers brings this claim into question. It asks whether mergers in the industry really are good for consumers, as is often claimed. Image copyright: Jelmer Rozendal, stock.xchng Task 2 1. Why do you think supermarkets might be able to charge higher prices for fresh fruit than greengrocers or market stalls? 2. In the light of this article, how do you think that supermarkets can justify their claims that the cost of shopping is being cut? Pricing Strategies - Lesson Plan: 2 x 1 hour lessons A series of 'off the shelf' lesson plans and resources for use in the classroom. These lessons deal with Pricing Strategies and are relevant to the following specifications: • AQA: Module 1, 10.3 • Edexcel: Unit 2, Section 4
  • 51. • OCR: Module 2872 and 2874 Aim: The aim of these lessons is to investigate pricing strategies, covering all the main types, both from a cost base and a market base. The subject matter is introduced via the PowerPoint Presentation - there are 35 slides so it is advisable to break it up as suggested below. The associated Activity provides two case studies that encourage students to think about the key strategies they will have covered in the Presentation. The first case study looks at PlayStation 2. The table provides a list of various prices at major retailers and Internet retailers. There is also some additional information provided about the original launch price of PlayStation 2 and the fact that it had to be rationed on first release! The prediction that price would fall below £100 in 2004 gives students the opportunity to relate market skimming as a possible price strategy but why might this not have occurred? The second case study focuses on a flight from London to New York. Two dates have been chosen and the price differences are marked. Students are asked, again, to consider the pricing strategies behind the case study. The expectation is that students can relate the principle of price elasticity of demand to this case study. The initial dates chosen (February 14th - 21st) coincide with the half term holidays for schools and colleges in the UK and also Valentines Day on February 14th. The noticeable difference between the prices in the week after the school and college holidays can be partly explained by a different price elasticity during those two weeks as the nature of demand changes. The second case study also allows students to look at pricing issues that are more heavily weighted towards cost rather than the market. The initial discussion section requires the collection of some newspaper or magazine adverts showing different prices. It is advisable to go through the Presentation prior to the lesson to ensure that you have at least one example of a real product to highlight each strategy. Learning Objectives: At the end of the lessons, students should: • Understand the basic principles behind the range of different pricing strategies used by firms • Understand the difference between cost based and market based pricing strategies • Be able to apply understanding of pricing strategies to different business situations • Understand other key factors that go into pricing decisions by firms Resources: • PowerPoint Presentation - Pricing Strategies [695 KB] (basic version also available for quicker download [384 KB]) • Mind Map - Pricing Strategies • Activity - Pricing Strategies • Projector and PC • PCs for student research
  • 52. • Some newspaper adverts highlighting different pricing examples for use with the Presentation and for initial discussion Lesson Structure: Lesson 1 1. Using one of the adverts (or if you are feeling generous some chocolate bars or similar handed out to the students) ask the question 'why is this item priced at £xxx?' Get feedback from students and discuss results. (10 minutes) 2. Hand out other examples collected and ask students to consider what the reasons might be for the pricing decisions in the cases used. (15 minutes) 3. Introduce the subject of pricing strategies using the PowerPoint Presentation. As you are going through the Presentation, keep engaging the students in discussion using the adverts collected or ask students to go through the magazines, etc. provided to find examples of their own to highlight the strategy. Get students to write the strategy on a large sheet of paper and then stick the examples underneath - these should be put around the room to act as peripheral learning devices and reinforcement throughout the two lessons (and beyond if there is space!). (35 minutes) Lesson 2 The second lesson can be attacked in a variety of ways to suit the needs of the group. 1. Review the learning outcomes from the last lesson, reminding students of the practical examples highlighting the strategies. (5 minutes) 2. The remainder of the lesson can be followed in a flexible manner. (45 minutes) o Introduce the Activity and go through the two case studies. Students can either be set the task or it can be the basis for some discussion prior to students writing down some information. The Activity can be used as a discussion base only without the need for any written output. o Students could be split into groups to consider their response to the case study and a representative feedback the group ideas to the rest of the class. The main points should be highlighted on the board or flip chart to enable the outcomes to be discussed. Highlight the different emphasis given by different groups - the aim is to drive home the principle that there is no right answer to such questions but that students need to be confident in making judgements and supporting those judgements. 3. Finish off the lesson with a review of the key learning outcomes - give a short question and answer session to assess the extent of the learning that has taken place. (10 minutes) Pricing Strategies - Mind Map Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version.
  • 53. View larger version of the mind map. • Market Skimming o High Price/Low volume • Value Pricing o Price based on consumer perception • Loss Leader o Sold below cost to attract sales elsewhere • Psychological Pricing o £1.99! • Going Rate (Price Leadership) o Prices set following lead of rivals • Tender Pricing o Bids for work • Price Discrimination o Different price, same good/service • Destroyer Pricing/Predatory Pricing o Aims to force out competitors • Absorption/full cost Pricing o Set price to cover FC and VC • Marginal Cost Pricing o Set price in relation to MC • Target Pricing o Target level of profit • Contribution Pricing o Variable/Direct Costs + contribution to Fixed costs
  • 54. • Cost-Plus Pricing o Average Cost + mark up • Influence of Elasticity o Price Inelastic o Price Elastic • Penetration Pricing o Low price/High volume Principles of Online Presence Image copyright: Melanie K., stock.xchng This resource is designed specifically for Unit 6 of the Edexcel BTEC qualification, 'Business Online'. Aim This area of the Business Studies curriculum aims to investigate some of the reasons why businesses develop an online presence and the impact this has on customers. An online presence means setting up a Web site for your business. The Web site may have a variety of functions, ranging from promoting the company to a wider audience, offering support/advice or selling products and services through e-commerce. Initially, we will examine the impact of four Web sites. We will then explore the key opportunities and possible pitfalls for a business arising from an online presence. Finally, we look into the impact of a business' online presence on the customer. At the time of writing (Spring 2006), the Web sites referred to in this resource were freely available and the details below correct. However, Biz/ed cannot guarantee the continued availability of third-party sites but will endeavour to keep this resource up to date with different examples should the need arise. Task 1 Visit the homepage of each of the following Web sites:
  • 55. • Honda Racing F1 • Society of College, National and University Libraries (SCONUL) • ACF Hospitality • Biz/ed Consider these questions: • What is the principal purpose of the Web site? (Sales, promotion, support, etc.) • Which site has the biggest visual impact? • Which features on the Web site might encourage you to visit again? • What didn't you like about the sites and can you think of any reasons why visitors may not return? Focusing on the features and design, here are some of our thoughts on the Web sites: • Honda Racing F1 The Honda Racing F1 site promotes the activities of the Honda Racing Formula 1 team. In addition, there is a shop to buy merchandise. The site is visually appealing and regularly updated sections (news, latest pictures, etc.) mean that visitors are likely to return for the latest information. However, it could be argued that there is little contrast between the grey text of the navigation and the black background colour, which may make this text difficult to read. The Web site is also available in eight different languages so would have a wide appeal. • SCONUL The SCONUL Web site promotes the activities and publications of the Society of College, National and University Libraries. One of the most prominent pieces of content on the homepage is information on what SCONUL is. A new visitor would find this information invaluable. There is a site map and site search, allowing a visitor to quickly find the information they require. Latest news is visible on the homepage and this highlights the fact that the site is regularly updated. There is also a 'change font size' feature so the user may increase the size of the text to make it easier to read. However, a user may be put off by the fact that the copyright link refers to 2003 rather than 2005 and the presence of both 'contact us' and feedback' links may be confusing. • ACF Hospitality The Web site is for ACF Hospitality, a company that organises corporate events. The first content to appear is an animation (produced in Macromedia Flash). Although a visitor could follow the 'Skip Intro' link, it could be argued that this animation is a distraction from the site content (especially for regular visitors). In addition, most of the content of the Web site is delivered through Flash animations. Anyone visiting the site using a device that didn't support Flash may be unable to access the content. However, assuming you can access the content, the layout reflects the active nature of the company and the constantly changing testimonials and prominent contact details instil confidence in the organisation. • Biz/ed Biz/ed supports students and educators of business studies, economics and related subjects. Visitors to the homepage can quickly determine what new content is available on the site, be it new and updated resources for educators, topical news items ('In the News') or the latest resources on current topics ('What's New'). New visitors can quickly gain familiarity with the site through reading the descriptions of the main site sections, using the site map