- Slides: 20
Customer Focus and the Marketing Mix Identifying needs Anticipating needs Meeting customer needs
1. 4 Customer focus and the marketing mix What the syllabus says… Customer focus: • Understand that a business must anticipate, identify and meet customer needs if it is to be successful The marketing mix: • Understand that a business will have to consider price, product, promotion and place as important elements to meet the business opportunity • Understand that different businesses will place different emphasis on the elements of the mix and that the mix can be amended to meet changing consumer needs
Limited Liability Differences Risk Control Profits Privacy Liability = legally responsible for debts
Topic 1. 4: Limited Liability What the syllabus says… • Explain the principle of limited and unlimited liability • Understand the implications of this in making a choice on the status of the business • The differences between sole trader and private limited company status • The focus should be on the different aims and implications of limited versus unlimited structures, highlighting the personal risk of unlimited liability.
Start up legal and tax issues Value Added Tax Corporation tax NI Contributions Income Tax Keeping business records
Topic 1. 4 Start up legal and tax issues What the syllabus says… • Understand the need to establish a unique trading and business name • Understand the need to keep careful records. • The implications for the business of: – VAT, – Income tax – National Insurance – Corporation Tax • The need to register a new business with HM Revenue and Customs. • The key is the need for record keeping rather than extensive details on types of tax.
Recruiting, training and motivating staff There are laws that protect workers from unfair practices by employers, a few are not to be discriminated against: • Health and safety • Holiday pay • Unfair dismissal protection • Working hours
Topic 1. 4: Recruiting, training and motivating staff What the syllabus says… • The basic processes involved in recruiting staff to work in a small business • The importance of skill versus attitude when recruiting and training staff • Understand the importance of treating staff fairly and a simple understanding of the impact of relevant legislation, e. g. relating to age, sex, race and disability discrimination Topic 1. 4: Recruitment, training and motivating
Customer satisfaction Customer service – The experience that a customer gets when dealing with a business and the extent to which that experiences meets and exceeds their needs and expectations. - Fulfilling customer orders on-time Dealing with complaints Customer satisfaction – a measure of how much products meet customers expectations.
Topic 1. 4: Effective on-time delivery and customer satisfaction What the syllabus says… • Explain how effective customer service includes fulfilling customer orders accurately and on-time and dealing with complaints. • Recognise the importance of customer satisfaction in the success of a business • The importance of repeat purchase for a business
Market Demand Supply COMMODITIES = Raw materials GOODS MARKET = Everyday products ENERGY COSTS
Topic 1. 5: Demand Supply What the syllabus says… • The prices of commodity markets (raw materials) are determined by the balance between supply and demand • The difference between commodity markets (raw materials and normal markets (goods market – everyday products) • The effect on small firms of price changes in raw materials and energy costs
Interest Rates Impact on borrowing? Bank of England sets the base rate – they decide what rate they will charge to lend money to other banks, which then impacts on what rates are charged to consumers. Impact on savings? Type of interest rate
Topic 1. 5: Interest Rates What the syllabus says… • How changing interest rates affect small firms which tend to rely on overdrafts and loans for finance • The impact of changing interest rates on consumer spending
Exchange Rates “The price of buying a foreign currency” £
Topic 1. 5: Exchange rates What the syllabus says… • Explain what exchange rates are • How changes in the £/$ or £/€ affect small firms that trade abroad or face competition from abroad • The impact of changing exchange rates on the price of imported and exported goods • How to calculate exchange rates on product prices (Questions will look only at £/$ and £/€)
The Business Cycle Economic activity – the amount of buying and selling that takes place in a period of time. The Economy – the economic activity carried out by people and businesses in a country. Economic growth – Rises in the rate of economic growth. Measured by value of sales (GDP) Gross Domestic Product (GDP) – the value of finished goods and services
Topic 1. 5: The business cycle What the syllabus says… • Understand that economic activity tends to rise and fall and that • Changes in the level of economic activity can have serious effects on small businesses
What effect do business decisions have on stakeholders? Stakeholder – anyone interested in or affected by the actions of a business. Conflicting objectives? - Do they all want the same thing?
Topic 1. 5: Stakeholders What the syllabus says… • That stakeholders are those groups or individuals with an interest in a business • Recognise that business decisions have different effects on different stakeholders • Problems a business may face in meeting the demands of all stakeholders