Please enable JavaScript.
Coggle requires JavaScript to display documents.
Business 1.4 - Coggle Diagram
Business 1.4
Marketing Mix
Price
The business may have to change its prices. Economic conditions such as inflation may lead to consumers having less money. Therefore, the consumer will still be able to afford their products
Product
A business may have to make changes to its product. This is because the changing lifestyle of consumers may require different features on a product. Therefore, the design of the product may need to change to meet consumer needs
Place
Businesses that sell a large variety of items through several businesses e.g Amazon might choose to sell online so the businesses can send their items directly to the customer.
Promotion
They might offer products on sales, '2 for 1' and bundles via billboards, TV and social media 'cookies'
-
-
Types of businesses
Sole trader
-
Disadvantages
Sole traders have unlimited liability. This means if the business goes in debt, the entrepreneur must pay back everything, even if it's by using their own finance. This causes instability and could bankrupt the business owner
Advantanges
Sole traders get to keep all the profits. Since they are the only one liable for the business, they can earn lots of finance from success. This is an incentive to be the sole owner of a business
Partnerships
A business with 2-20 owners, can have unlimited/limited liability
Disadvantage
There may be disagreements between partners. This makes it difficult and can delay making business decisions. This will lead to the business not being able to meet the needs of its customers fast enough
Advantages
An advantage of a partnership is shared risk. This means if the business struggles with finances, individuals aren't vulnerable to losing large sums of money. This leads to a higher chance of business survival
-
Business location
Proximity to market
Businesses should be close to their target market. This is so customers have easy access as they won't want to be inconvenienced with travel. This helps with customer satisfaction and adds value to the product
Online businesses don't need to worry about this as they sell globally. This means they focus on locating where it is cheapest to bring down the prices of their products. This is seen just as desirable as places a customer can visit if they're on a budget
Proximity to materials
bulk-gaining products- If the product is larger than the materials used (eg a bike), it's sensible to locate closer to the market. This because more of the product can be travelled at once as it can be more cramped in as the materials. This helps saves cost, allowing the product to be cheaper
bulk reducing product- If the product is smaller than the materials used (e.g smoothie), it makes more sense to locate near raw materials. This is because if the business is spending less on travel of the materials and can send more of the product at once. This saves a lot of money which allows the product to be cheaper
Proximity to competitors
Being far could limit sales and customers. A business is more likely be considered to shop in near a similar market. This is because customers likely want to browse through its choice instead of limiting their choice at just one like with clothing stores
Some businesses like to locate away from competitors. The customer usually seek that certain business and there isn't much variety e.g prices at petrol stations. This helps the business as they seem more in demand without close comparison
Business plans
-
Minimising risk
A plan also allows to help minimise risk as there is a high risk of business failure within the first year.
They may conduct: market research, cash flow forecasts, aims and objectives
Obtaining finance
-
This will help minimise risk. Financial information such as a cash flow forecast can help identify potential problems. This will allow the business to plan for these problems in advance
-