ch18

• market strategy is a plan business creates to market a product to its customers
• product must meet customer wants and needs has to be easily adapted to market change
• What is marketing strategy?


  A plan to combine the right elements of the marketing mix for a product or service
• What are the four elements of the marketing mix?

  Product, Price, Place, Promotion
• What factors should be considered when choosing a marketing strategy?

  Objectives, budget, target audience, nature of the product
• What is benefits of entering foreign markets?

  Increased sales

  improve reputation

  spread risks

  reduce average cost (economies of scale)
• What are some challenges of entering foreign markets?

  Differences in cultures, lack of market knowledge, economic differences
• What are common ways to expand into new markets?

  • Joint ventures
  • Licensing
  • International franchising
  • Localising existing brands
• What is production in a business context?

  Provision of a product to satisfy wants and needs
• What are the four factors of production?

  • Land
  • Labour
  • Capital
  • Enterprise
• What does productivity refer to in a business context?


  Output per unit of input
• How can labour productivity be improved?

  • Increase output with the same number of workers
  • Keep output the same with fewer workers
• What are ways to increase productivity?


  • Improving skill level of workers
  • Improving motivation of workers
  • Improving relationship between employer and employee
• Why do businesses hold inventories?

  To manage raw materials, work-in-progress, and finished goods
• What are the costs associated with holding inventories?

  • Warehousing costs
  • Handling costs
  • Shrinkage costs
  • Insurance costs
  • Obstacle costs
• What are the methods of production?

  • Job production
  • Batch production
  • Flow production
• What is job production?


  Goods made individually by one person
• What are the advantages and disadvantages of job production?

  Advantages:

  • Job satisfaction
  • Varied jobs for workers

  
  

  Disadvantages:

  • Skilled labour needed
  • Labour intensive
• What is batch production?


  Production of a product stage by stage over a series of workstations
• What are the advantages and disadvantages of batch production?

  Advantages:

  • Flexible
  • Some variety to workers' jobs

  
  

  Disadvantages:

  • Expensive to move products around
  • Storage space needed
• What is flow production?


  Large quantities of a product produced in a continuous process
• What are the advantages and disadvantages of flow production?

  Advantages:

  • Specialisation
  • Capital intensive

  
  

  Disadvantages:

  • Little job satisfaction
  • Needs a lot of capital to set up
• When should job production be used?


  When a unique and individual service is required
• When should batch production be used?


  When demand is higher and batches are made to order
• When should flow production be used?


  When demand for a product is high and steady
• Why is stock control important for a business?


  To ensure that a business will not run out of stock
• What is lean production?


  • Focuses on cutting down waste
  • Increases efficiency
• What are the seven types of waste in production?

  • Overproduction
  • Waiting
  • Transportation
  • Unnecessary inventory
  • Motion
  • Over-processing
  • Defects
• What are lean production methods?

  • Kaizen
  • JIT (just-in-time) production
  • Cell production
• What is Kaizen?


  Continuous improvement through the elimination of waste
• What are the advantages and disadvantages of Kaizen?


  Advantages:

  • Increased productivity
  • Reduced work-in-progress

  
  

  Disadvantages:

  • Time-consuming meetings for employees
• What is JIT production?


  Eliminating the need to hold stocks
• What are the advantages and disadvantages of JIT production?


  Advantages:

  • Reduced storage cost

  
  

  Disadvantages:

  • Requires reliable suppliers for raw materials
• What is cell production?


  Production divided into cells, each making an identifiable part of the finished product
• How has technology changed production methods?

  • Automation: Equipment controlled by a computer
  • Mechanisation: Tasks done by machines operated by people
  • CAD: Used for designing 3D objects
  • CIM: CAD & CAM used together
  • EPOS: Scanning products at point of sale
  • EFTPOS: Cash register connected to main computer
• What is the formula for total costs?


  Total costs = fixed costs + variable costs