Business

• What are the four stages of the sales process?

  1. Product knowledge

  2. Speed and efficiency of service

  3. Customer engagement

  4. Post-sales service
• Give two drawbacks to a business of poor customer service

  1. Unable to differentiate their product and charge a premium price

  2. poor brand image
• What are the benefits of good customer service?

  1. Satisfied and loyal customers

  2. Able to differentiate products/service and charge a higher price

  3. Positive brand image/ reputation

  4. Leads to repeat purchase and customer loyalty
• What are some factors that might affect the sales process?

  1. The product knowledge of staff

  2. The speed and efficiency of it's service

  3. Customer engagement with the products

  4. Responses to customer feedback

  5. Post-sale service they provide
• What are the 4 elements of the marketing mix?

  Product, Place, Price, Promotion
• What is limited liability?


  Shareholders will only lose the amount they've invested into the business if the firm needs to get out of debt
• What is unlimited liability?


  The owner is personally and fully responsible for all losses and debts of the business. The bank can come after your assets
• What type of ownership will give shareholders limited liability?

  A Public Company
• What is a sole trader?

  A business owned by one person
• What are the benefits of becoming a public limited company?

  - Gain lots of share capital

  - Personal assets are protected ( Limited liability )

  - Business can continue to run even if the owner dies

  - Investors can make bold moves as the individual shareholders aren't responsible for any debts if the move goes wrong
• Product knowledge


  Ability to answer customers question is very helpful, create positive customer experience, important for products that require lot of technical knowledge
• Speed + efficiency of service


  Served quickly improves customer experience (e.g.: self checkout reduces waiting times/Amazon supermarket)
• Good customer engagement


  Creating positive experience for customer in sale/post-sale process

  Being polite, friendly, helpful can create positive customer experience

  (e.g.: startup business HotelTonight, messages of customers answered within 10 mins--> positive customer experience )
• Post sales service


  Make sure customer has positive experience with the product, more likely to purchase
• Globalisation


  People, businesses, governments and markets around the world become more connected
• Benefits of globalisation


  - Access to more customers

  - import cheaply from other countries

  - pay lower costs for labour

  - more growth opportunities
• Drawbacks of globalisation


  - Reliant on foreign countries economy if it undergoes a recession lots of UK business will suffer from this

  - Poor working conditions for employers i.e sweatshops

  - more competition
• Benefits of being a sole trader


  - easy to set up

  - freedom to make own decisions
• drawbacks of being a sole trader

  1. unlimited liability

  2. long hours of work
• Benefits of being a partnership

  1. someone to consult with for ideas

  2. benefit from shared expertise
• drawbacks of a partnership

  -Unlimited liability for owners

  - Disputes can impact productivity and decision making
• Franchising


  Buying into an existing business
• Benefits of franchising


  - recognised brand trademark

  - supported by the franchisor

  - easy to finance

  - low risk of failure
• Drawbacks of franchising


  - Franchiser controls many aspects of business

  - Franchisee must pay

  * Franchise fee

  * Royalty

  - Uneven franchise agreements
• Drawbacks of a public limited company


  Original owners often lose control

  Managers and directors may have different aims to those of the shareholders

  Must disclose all main accounts to the public

  Company can be taken over if the majority of shareholders agree to bid from another business
• Just-in-time (JIT)


  An inventory-management approach in which supplies arrive just when needed for production or resale
• Pros and cons of JIT

  +reduces costs, don't have to pay for storage

  - high demand means higher costs for transport, no discounts given
• Just in case (JIC)


  A situation where a company keeps a small stock of components (or complete items) or ones that take a long time to make, just in case of a rush order.
• Pros and cons of JIC

  + buffer stock will help when there's a sudden surge in demand

  - have to pay for storage
• Pros and Cons of Viral Marketing

  Pros:

  -inexpensive

  -extremely powerful

  
  

  Cons:

  -hit or miss

  -inability to control message
• Four pricing strategies


  1. Price penetration

  2. competitive pricing

  3. price skimming

  4. cost-plus pricing
• cost-plus pricing


  charging the customer based on how much it cost to make the product then a little extra to make a gross profit
• Price Penetration


  setting a low price initially then increases it
• Price skimming


  Charging a high introductory price then lowering it. Usually used on premium products
• Competitive pricing


  setting the price of a product or service based on what the competition is charging
• Benefits of being ethical

  - good public image

  - employees being treated good means they'll maximise their efforts

  - can advertise that the business is being ethical
• Calculate gross profit


  sales revenue- cost of sales
• Calculate net profit


  gross profit - expenditure
• calculate gross profit margin

  gross profit/ sales revenue x 100
• calculate net profit margin


  net profit/ sales revenue x 100