EDEXCELAS Business Studies
REVISION
by Apsara Sumanasiri
Scholar Virtual AcademyAddress : No 03, Daisy Villa Avenue,
Bambalapitiya, Colombo 04Tel : (94 11) 2553466 / 2593571Email : [email protected] : www.international-scholar.com
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
AS Business StudiesUnit 2
Section 1Marketing Plan
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Marketing objectives& Strategy
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
What is marketing?
Marketing is the management process that is responsible for identifying,
anticipating and satisfying customer requirements profitably
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
What is marketing?
Customer is KING!
If firms want to survive, they must satisfy consumer wants.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
The role of marketing
The main purpose of marketing is to increase customer demand, i.e. to shift
the demand curve outwards.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
The role of marketing
The marketing department does not work in isolation.
The objectives of the marketing department must fit in with the
objectives of the business.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Marketing objectives
Possible marketing objectives could be:• To increase sales• To create brand loyalty• To develop the product range• To survive in the market• To change the market position• To increase Market Share
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
What determines marketing objectives
External factors:• Customer
behaviour• Competitor
behaviour• The economy• Technology• Government• Changes in the law• Suppliers
Internal factors:• Market Research
Findings• Forecasted Sales• Forecasted Profits• Availability of
Finance
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Forming a marketing strategy
A marketing strategy is designed to achieve the marketing objectives.
The marketing strategy should consider:
• The target market• The marketing mix
• The strategy of the business
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Mass Vs. Niche Marketing
A niche market:
• Targets a very small segment of a
market• Sales will be lower,
but prices will be higher
A mass market:
• Appeals to the whole market
• Requires high sales volume and low
prices
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
The marketing mix
The marketing mix in said to
consist of the 4 key elements
needed for successful
marketing, often referred to as the
4 Ps.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Product
Prom-otion
PlacePrice
Marketing Mix* Product *
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
The marketing Mix - Product
Developing new products is time consuming and businesses will want to protect their new products and ideas (intellectual property). This can be
done through:• Patents
• Copyrights• Trademarks
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Product Life Cycle
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Product Life Cycle
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Product Life Cycle
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Managing a product portfolio
A product portfolio refers to a range of products produced by a company or brand.
A portfolio can be managed using a product life cycle approach
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
How useful is the product life cycle?
The product lifecycle is important to find the approach on the other factors of the marketing mix, however:• It’s impossible to tell how long a product is
going to last and therefore identify where on the PLC the product is.
• It’s of little use to tertiary sector businesses• Less effective for firms with a large product
portfolio (eg. NOKIA)• It only considers sales and profits
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group Matrix
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group Matrix
A portfolio of products or simply put, a group of products can be analysed using the Boston Matrix. This matrix categorises the range of products that the business has into one of four different types, Stars, Problem child or question mark, Cash cow and question mark.
This classification is done based on two criteria ie. Market share and market growth.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group Matrix
• Market share – refers to the proportion of the total industry sales that a particular product hold and thus looks at whther the product being sold has a low or high market share?
• Market growth – looks at whether the numbers of potential customers in the market growing or not?
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group Matrix
Stars are high growth products competing in markets where they are strong compared with the competition. Often Stars need heavy investment in order to sustain the market share during growth. Eventually growth will slow and, assuming they keep their market share, Stars will become Cash Cows
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group Matrix
Question marks are products with low market share operating in high growth markets. These are typically new products in the market. Therefore, would have low mkt share togetherwith a high potential for growth.. This suggests that they may need substantial investment to grow market share at the expense of larger competitors. Management have to think hard about “Question Marks” - which ones should they invest in to help grow? Which ones should they allow to fail or shrink?
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group Matrix
Cash cows are low-growth products with a high market share. These are mature, successful products, thus have a high mkt sh together with less growth potential due to the products maturity in the mkt and thus low potential to grow any futher.. these products need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs. Thus, re-investment is very important.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Boston Consultancy Group Matrix
Unsurprisingly, the term “dogs” refers to products that have a low market share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in. Dogs are usually sold or closed.
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Marketing Mix* Price *
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Influences on price
• Demand and supply• Market conditions• Production costs• Market structure• Taxes and subsidies• Business Objectives• Marketing mix
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Pricing strategies
Short-term pricing strategiesThese are often used for promotional reasons
• Penetration pricing• Market skimming• Discounts/Sales• Loss leader
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Pricing strategies
Long-term pricing strategies
• Demand-based• Cost-based• Competitor-based• Psychological
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Price Elasticity of Demand
PED shows the responsiveness of quantity demanded to a change in
price. It can be calculated as:
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Price Elasticity of Demand
PED is always negative, due to the inverse relationship between price and quantity
demanded. Once the negative sign is ignored there are three possible outcomes:
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
PED and total revenue
Price increase Price decrease
Demand elastic Revenue falls Revenue rises
Unit elastic Revenue remains constant
Revenue remains constant
Demand inelastic Revenue rises Revenue falls
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Marketing Mix* Place *
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Good LuckHope you’re doing some effective revision…
Happy Revising!
Apsara
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
Scholar Virtual AcademyAddress : No 03, Daisy Villa Avenue, Bambalapitiya, Colombo 04Tel : (94 11) 2553466 / 2593571Email : [email protected] : www.international-scholar.com
© 2013 by Apsara Sumanasiri. All rights reserved. | Edexcel AS Business Studies Unit 2 Revision on Scholar Virtual Academy
For more details and revision materialcontact:
Top Related