Business

• Sales promotion techniques


  • Coupons that customers can exchange in store
  • Competition offering customers a chance to win a prize
  • Money off / discounts offering a reduction in prices
• Coupons that customers can exchange in store


  • Advantages: easy to monitor, relatively cheap to produce, encourage immediate time specific purchases
  • Disadvantages: lower profit on each item sold, may just be thrown away, does not encourage repeat purchases
• Competition offering customers a chance to win a prize


  • Advantages: encourages multiple purchases for the time of the competition, customers may have to buy the product to enter competition, increasing sales
  • Disadvantages: prizes may be expensive to supply, sales may fall after competition ends
• Money off / discounts offering a reduction in prices


  • Advantages: prompts an immediate action, new customers may be willing to try a new product for a cheaper price
  • Disadvantages: lower profit on each item sold, customers may hold off buying a product waiting for discounts to be applied
• Promotional mix


  The combination of the promotional methods chosen by a business
• Aim of promotion


  Communicating the features and benefits of the business or the products offered by the business
• Promotion mediums


  • Advertising
  • Sales promotion
  • Personal Selling
  • Direct marketing
  • Public relations
• Factors influencing choice of marketing method


  • Cost
  • Appropriateness for product or service
  • Competitors
  • Speed, accessibility of information and ease of reaching market
  • Experience of entrepreneur
• Building trust, reputation and loyalty


  • Being environmentally friendly
  • Being ethical
  • Providing good customer service
  • Good quality products
  • Value for money
  • Supporting the local community
• Financial documents


  • Purchase order
  • Delivery note
  • Goods Received note
  • Invoice
  • Credit note
  • Statement of account
  • Receipts
  • Remittance advice slip
• Purchase order


  When a buyer orders goods or service from seller, includes details like quantities and agreed prices
• Delivery note


  When goods are delivered to the buyer, used by customers to check off goods and ensure the delivery matches the purchase order
• Goods Received note


  When the goods are received, to confirm all the goods have been received
• Invoice


  Details the amount owed and the date, occurs after goods are received
• Credit note


  If a customer returns their goods to the seller, proof customer returned the goods and got a refund
• Statement of account


  A summary of all recent transactions, used with customers who have charge accounts and regularly purchase goods
• Receipts


  Document acknowledging and providing proof of purchase, details item, price and date of purchase
• Remittance advice slip


  Document sent by customer to company containing details of a payment made, so the seller can check a payment was received
• Increase or speed up cash inflows

  • Increase revenue
  • Selling unused assets
  • Selling off inventory
  • Chasing debtors for monies owed
  • Reducing credit period offered to customers
• Increasing revenue

  Increases the cash inflows as the amount of money coming in from sales will go up
• Delaying payments to suppliers

  Slows down the speed with which cash flows out of the enterprise
• Investment


  Attract new investors to supply a cash boost to the enterprise
• Mortgages


  • May be secured against an asset normally premises or land
  • If there is a default on repayments the asset can be taken
  • Financial institutions can vary interest rates depending upon the amount of risk placed on the mortgage
• Share capital


  Finance raised from the sale of shares
• Share capital


  This is a form of equity capital i.e. the shareholder becomes a part owner of the enterprise
• Share capital


  Shareholders will be rewarded for their investment by the payment of dividends but may also benefit from an increase in share price increasing the value of their shares
• Share capital


  Only an option for incorporated businesses i.e., Ltds and Plcs
• Share capital


  Issuing shares is a complex and costly process
• Assets


  Something that is owned by an enterprise e.g. Vehicles, Land, Machinery
• Medium-term external sources of finance


  • Leasing
• Short-term external sources of finance


  • Bank overdraft
  • Trade credit
  • Peer-to-peer lending (PTP)
• Crowdfunding


  Raising finance from a large number of people each investing different, often small, amounts of money
• Crowdfunding


  The enterprise uses the internet to explain how much money is required, how it will be used and the exit strategy stating predicted return on the investment
• Trade credit


  Goods or services are received now but paid for at a later date
• Trade credit


  A supplier will normally allow other businesses a set amount of time e.g. 28 days before payment is required
• Government grants and charitable grants


  Financial support given to an enterprise from the Government or charity
• An enterprise may plan different sources of finance for different purposes