1.4 Making the Business Effective

• What is unlimited liabilty?


  If the business fails, people can take your personal belongings to pay back your debts
• Identify 5 areas that could be included in a business plan?

  Names, Owners, Financials, Aims and Objective, Target market
• What is limited liability?


  If the business fails, no one can take your personal belongings to pay back your debts
• Why does the marketing mix need to be balanced on the competitive environment?

  If competitors are offering a product at a lower price, a business may need to lower its own prices

  If a competitor starts selling a brand new product, a business may need to develop its own version of the same product
• Impact on changing consumer needs on the marketing mix?


  Companies may have to lower their prices for products that use older technology
• Benefits of a soletrader?


  Easy to set up and retains all profits to themself
• Drawbacks of a soletrader?


  Work long hours and unlimited liability
• Benefits of partnership?


  More ideas and shared responsibility
• Drawbacks of partnership?


  Unlimited liability and shared profits
• Benefit of Private Limited Companies?


  Easy to get a loan and limited liability
• Drawbacks of private limited companies?


  More expensive and less flexible structure
• Impact of technology on the marketing mix?


  Improvements on e-commerce means more companies are selling their products online rather than in store
• What is franchising?


  When a business sells the products or uses the trademarks of another business
• What is a franchisor?


  The product manufacturers
• What’s a franchisee?


  The firms that sell the products of another business
• What is the role and importance of a business plan?


  Outlines what businesses will do and how it aims to do it
• 3 factors that influence the location of the business?


  Competition, location of raw materials and labour supply
• Benefits of franchising?


  More likely to be successful and easier to get a bank loan
• Drawbacks of franchising?


  Strict rules and lot of money to start up
• What is the marketing mix?


  Price, place, product, promotion
• Why is price important to the marketing mix?


  Good value for money
• Why is place important to the marketing mix?


  Method of distribution used to get a product from the company to customers
• Why is product important to the marketing mix?


  Identifying customers needs or wants and then coming up with a product to fulfil the needs
• Why is promotion important to the marketing mix?


  Promoted so that potential customers are aware that it exists and will want to buy it