Welcome to BUSS2!

1. Welcome to BUSS2!

2. Download all of today’s resources, including suggested answers from www.tutor2u.net/buss2.pdf

3. Today Session 1: Marketing Mania Session 2: Funky Finance BREAK (Noon) Session 3: Awesome Ops LUNCH (1.00-1.50 p.m.) Session 4: Effective People Session 5: Cool Competiveness and Exam Skills

4. Session 1 Marketing Mania

5. Session Focus • Influences of Pricing • Distribution Channels • Price Elasticity of Demand • Product development Throughout - focus on exam skills

6. Q1 Give me three key influences on a firms choice of price 1 The market the business operates in 2 Rival competitors prices 3 The price elasticity of demand

7. Q2 3 problems and 3 benefits of a business operating in a niche market moving into a mass market

8. Increased competition from much larger firms who may be able to offer much lower prices Much larger target market with far more customers to aim at increasing revenue opportunities Ability to lower unit costs as the fixed costs of the business will be spread over more units of output May lose the ability to meet the individual needs of customers and respond to their needs May alienate existing customers who preferred purchasing from a unique, niche business Lower chance of business failure as less reliant on a small group of customers

9. I am thinking of 3 things that might influence a businesses choice of distribution channel What are they?

10. The type of product being sold The target market Competitors

11. Examiners Tip: Making Connections In your exam you are trying to demonstrate GOOD ANALYSIS. One way of showing the examiner GOOD ANALYSIS is to develop a logical chain of argument which shows GOOD CONNECTIONS The next activity will help develop this skill

12. What’s the connection? Price Elasticity of Demand Profit If a product is price inelastic then the business can increase the price and although demand may fall, the percentage fall in demand will be less than the percentage increase in price meaning that the firms revenuewill increase as well as profit

13. Let’s focus on some marketing maths Read through the Shakeaway case study

14. Outline ONE REASON why you think that the Millionaire Milkshake has a price elasticity of demand of -0.3 It is a unique product with very few competitors as it uses real gold in its ingredients. Consequently, this means that there is no real substitute for the milkshake and is therefore relatively price inelastic 1

15. Question.. Calculate how much more revenue would be generated by the Millionaire Milkshake if the price was increased to £12.00

16. Calculate how much MORE revenue would be generated by the Millionaire Milkshake if the price was increased to £12.00 The price elasticity of demand is -0.3. Shakeaway are considering raising the price from £10 to £12 and demand is currently 350 milkshakes Current revenue = 350 x £10 = £3500 £10 to £12 = An increase of 20% 20% x 0.3 = A decrease in demand of 6% Demand for the milkshake would therefore reduce from 350 to 329 329 x £12 = £3,948 Difference in revenue = £448 (£3,948 - £3,500)

17. Exam Gold..... Always show your working out when completing calculations. This way, even if you get the answer wrong you may still be awarded some marks if the examiner can see some evidence of understanding

18. The True or False Challenge!!

19. Activity 6 Taking the Biscuit Read through the case study

21. Examiners Tip: Application Application is all about answering questions in CONTEXT. To achieve GOOD APPLICATION you need to make sure that your answer is well applied to the case study The next activity will help develop this skill

22. Q1 Explain ONE influence on Biscuiteers pricing decisions One influence on Biscuiteers pricing decision is the cost of the supplies. This is because Biscuiteers use only the best natural ingredients and pay a premium price for their supplies and therefore the price will need to ensure that it covers this extra cost 1

23. What’s the connection? • Different students provided with different ‘what’s the connections’ • Different students provided with connections that are closer or further apart (clustering) • Weaker students provided with a ‘middle’ connection to help bridge the gap Stepping Stones Step Your Way to Success!!

24. What’s the connection? a greater chance that their target audience will see the TV advert . This could increase the effectiveness of this method of promotion resulting in increased customer footfall for the business. because Shakeaways target market is 10-20 year olds Shakeaway can target their customers by advertising in between children's TV shows leading to television advertising would allow Shakeaway to promote its products and services to a national audience. Also • Different students provided with different ‘what’s the connections’ • Different students provided with connections that are closer or further apart (clustering) • Weaker students provided with a ‘middle’ connection to help bridge the gap Analyse TWO reasons why Shakeaway uses TV advertising as its main form of promotion Shakeaway consists of 35 stores and is therefore a national business. This means that Shakeaway is the worlds largest milkshake company meaning it would have a budget large enough to afford TV advertising which is very expensive. In addition

25. Exam Style Question Analyse TWO reasons why Biscuiteers has a policy of continual product development within it’s business (8 marks)

26. that it will allow Biscuiteers to become more competitive. This is because Biscuiteers have carved out a reputation for innovative products and therefore continually developing new products will allow Biscuiteers to retain their unique selling point in the market place and keep their price at a premium. In addition to this their policy of continual product development has allowed them to enter new markets by developing products such as chocolates, cakes and greeting cards which also allows them to meet one of their main objectives which is to expand the business

27. Exam Style Question To what extent has the products of Biscuiteers been the most important element of its marketing mix? Justify your view (15 marks)

28. Exam Gold..... Recent examiners reports have highlighted that the best strategy to ensure you reach the higher marks is to choose TWO or THREE arguments and DEVELOP your points FULLY rather than choosing several points and failing to developing them

29. = write answers that make the connections

30. + write chunky paragraphs

31. By building a logical argument using connectives therefore… which in turn… A consequence of this might be … this might mean… on the other hand… this is because

32. Exam Style Question To what extent has the products of Biscuiteers been the most important element of its marketing mix? Justify your view (15 marks)

33. The marketing mix is the combination of a firms product, promotion, price and place that work together in order to meet the firms marketing objectives The product is handmade, and uses an old fashioned technique which gives it a unique selling point. This enables Biscuiteers to compete and differentiate themselves from other biscuit manufacturers in this highly competitive market. Other elements of the marketing mix are also important to Biscuiteers, for example, it’s promotional strategy. Biscuiteers advertise in exclusive magazines such as GQ, Vogue and Elle which allows Biscuiteers to target a more exclusive market who will be prepared to pay the high prices it charges. Product is the most important Judgement because Biscuiteers products dictates the rest of its marketing mix. The product is a quality handmade biscuit which therefore allows them to charge a higher price. Justify and apply Promotion is needed in order to convey the image of luxury and all elements of the marketing mix need to be integrated effectively to deliver the most effective marketing campaign. However, their product of handmade biscuit gives them their USP.