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25th september business revision - Coggle Diagram

- - - - increased costs of production
      - new technology
      - new laws
    - - as price increases supply increases
      - as price descreases supply decreases
  - - - lower incomes
      - infaltion
      - changes in trends
        
        tastes and preference
      - change of prices with substitutes or competitors
    - - PED
        
        PED equation
        
        % change in quantity demanded / % change in price
        
        percent change equation
        
        new value - old value / old value times 100
        
        elastic
        
        elastic will always be >1
        
        demand is more responsive to change in price
        
        normally more luxury products and not necessities
      - inelastic
        
        inelastic will always be between 0 and 1
        
        demand is less responsive to change in price
        
        necessities such as food or fuel, can also be addictive products like cigerettes
      - factors affecting PED
        
        availability of substitutes
        
        brand loyalty
        
        luxury or necessity
      - significance of PED
        
        helps business decide there pricing strategy
        
        helps business who have an inelastic product to be able to increase price significantly without demand decreasing
        
        if a business has an elastic product then they must try keep prices lower since increasing them would lead to a fall in total revenue and more importantly demand
    - - change in income changes the overall demand for a product
      - YED equation
        
        % change in demand / % change in income
      - positive and negative YED
        
        producsts with a psitive YED can be seen as normal goods
        
        products with a negative YED can be seen as inferior goods
      - 1 is a luxory so very responsive to change in income
      - 0-1 necessity so not responsive to income change
      - factors influencing YED
        
        during a recession inferior goods demand will rise and luxury goods demand will decrease
        
        during economic growth luxury products demand will increase whilst inferior goods will fall
      - significance of YED to a business
        
        helps a business preparare how much of a product will need to be produced
        
        can help with financial planning
        
        help with product planning
- - - - sales promotion
      - advertising
      - direct marketing
      - public relations
    - - features
      - quality
      - branding
      - packaging
      - services
      - warranty
    - - channels e
      - market coverage
      - location
      - assortment
      - transport
      - iventtory
    - - price strategy
      - pricing
      - allowances
      - dicounts
      - payment terms
  - - - cost of production will always be a significant part of a product since f it costs to much to produce it will have to sell for more
    - - the visual appeal of the product including its texture, shape or colour
    - - the intended purpose and the specific tasks the product will be designed for
    - - companies will always need to change depending on the social trends for example resource depletion and how businesses will need to rethink there design mix to help with this issue.
      - another example would be ethical sourcing where we could see companies try and change there desiing mix to base around including ethically recoursed materials.
  - - - when a business sets a high price for a new product entering a market
    - - where a business caclulates its cost then add a markup to create there price
    - - takes customer emotions and beliefs into account before setting a price for example 9.99 instead of 10
    - - when a business set a low price for a new product in a market
    - - set a low price to drive cmpetiros out of a market
    - - when a business sets there price depending on there competiotors price
    - - price elasticity of demand
      - level of competition in business environment
      - amount of differentiation
      - strength of brand
      - stage in the product life cycle
      - costs and need to make a profit
  - - - producer
        
        wholesaler
        
        retailer
        
        consumer
      - commonly used for products such as groceries, clothing, electronics
    - - producer
        
        retailer
        
        consumer
      - normally used for products of high demand where cost of distribution is high
    - - producer
        
        consumer
      - normally used for product sold online or products sold in a direct sales channel
    - - the growth of ecommerce
        
        online distributors become a lot more comment
        
        many businesses use drop shipping
      - shift from product base business to service based business
        
        consumer are starting to value experience over material possessions
        
        service based products will involve the business elling the service directly
  - - - introduction
        
        growth
        
        maturity
        
        decline
        
        when sales begin to decline
        
        cash flow negative
        
        business move to reducing product costs
        
        sales growth slows as product reaches peak of market share
        
        cash flow positive
        
        strategies focus on maintaining market share
        
        cash flow begins being positive
        
        when sales grow rapidly
        
        business focus goes to building market share
        
        cash flow negative
        
        when the product is launched
        
        sales are normally slow since consumer dont know about the prodcut
      - involves high costs
      - When the business is developing a product
      - cashflow normally negative
    - - product related
        
        line extensions
        
        repositioning
        
        product improvements
      - promotion related
        
        price promotions
        
        sales promotions
        
        changes to advertising
  - - - high market share and high market growth
    - - low market share and low market growth
    - - high market share low market growth
    - - low market share high growth