theme 1

• Public limited company plc

  A company owned by shareholders where the stocks can be traded openly on the stock market

  
  

  benefits

  - capital can be raised quickly

  - risks shared among shareholders

  - increased liquidity- their shares become more liquid and can be sold more easily on a stock exchange- easier for shareholders to buy/sell shares

  - raises the company's public profile- increase its visability

  
  

  drawbacks

  - less control

  - expensive to start up

  - shareholders will expect to receive a percentage of the profits through dividends

  
• unincorporated


  unlimited liability

  - the owner is the business
• incorporated


  limited liability

  - the company is the business
• Brand Name


  A unique and recognised feature of a business such as a name, shape or logo that distinguishes it from competitors
• types of branding


  corporate- attaches a perception and promise to the goods and services associated with that brand

  
  

  personal- when a person brands themself (celebs can launch a brand based on their personal recognition)

  
  

  geographical- when a region,city or country creates a brand that epitomises the people and lifestyle of that area - often used in tourism (yorkshire tea)
• Market share


  the percentage of the total market that a company's products or services represent

  
  

  (business sales/total market sales)x 100
• market size


  the total VALUE or VOLUME of sales in the market

  
  

  no of units sold x price
• market growth


  a measure of the % change in the size of a market over a period of time

  
  

  (change in size of market/original size) x 100
• how do markets change

  - the sizze of markets

  - market share changes

  . new entrants

  . closure of copetitors

  -external influences

  . technological advancements

  . economic factors

  . legislation

  - innovation
• Mass market


  A very large market in which products with mass appeal are targeted
• Focus groups


  Where a number of customers are invited to attend a discussion about a product led by market researchers

  
• sampling

  random- each person is chosen by chance

  quota - the population are segmented into subgroups e.g women then purposefully selected based on that subgroup (20% = 30 20% = 55 20% = 90)

  stratified- the population is segmented into groups then randomly selected
• types of market segmentation

  splitting the market into subgroups of consumers with similar characteristics

  
  

  -demographic

  . age

  . gender

  . race

  - geographic

  . region

  . neighbourhood

  -behavioural

  . needs/wants

  . time of purchase

  -income
• Added value


  the difference between what a business spends to produce its goods or services, and the price that customers are prepared to pay
• Competitive advantage


  An advantage that enables a business to perform better than its rivals in the market

  
  

  Michael porter's generic strategy- a firm can enjoy a competitive advantage if it is either:

  - lowest cost

  - highest differentiated

  
• Market map


  way of assessing the competitive position of brands and businesses

  
• Market positioning

  The view consumers have about the quality, value for money and image of a product in relation to those of competitors

  
• Product differentiation


  An attempt by a business to distinguish its product from those of competitors

  
• Inferior goods

  demand falls when incomes rise (people switch to higher quality products)
• Normal goods


  demand will rise if incomes rise e.g clothes- you need clothes and will always buy them but will buy more with an increase in income
• Substitute goods


  Goods that can be bought as an alternative to others, but perform the same function e.g tesco own brand
• Subsidy


  A grant which is given to producers to encourage production of a certain good
• indirect tax

  A tax levied on goods and services rather than on income or profits.
• Equilibrium price


  The price where supply and demand are equal

  
• Excess demand


  The position where demand is greater than supply at a given price and there are shortages in the market
• Excess supply


  The position where supply is greater than demand at a given price and there are unsold goods in the market
• YED inelastic/elastic


  more than +1 or less then -1 = income elastic

  between -1 and +1 = income inelastic
• PED inelastic/elastic


  less than -1 = price elastic

  more than -1 = price inelastic
• Consumer durables


  Goods that can be used repeatedly over a period of time, such as cars and household appliances
• Ethical sourcing


  Using materials, components and services from suppliers that respect the environment, treat their workforce well and trade with integrity
• Resource depletion


  The using up of natural resources
• Waste minimisation


  Reducing the amount of resources that are discarded in the production process
• Above-the-line promotion


  Placing adverts using the media
• Below-the-line promotion


  Any promotion that does not involve the media
• Emotional branding


  The practice of using the emotions of a consumer to build a brand
• Marketing mix


  The elements of a business' marketing that are designed to meet the needs of the customers (4 P's)

  product

  price

  place

  promotion
• Public relations

  An organisation's attempt to communicate with interested parties
• Sponsorship


  Making a financial contribution to an event in return for publicity
• Viral marketing


  Any strategy that encourages people to pass on messages to others about a product or business electronically
• Competitive pricing


  Pricing strategies based on the prices charged by rivals/competitiors