Business studies - Unit 3

Marketing
1. Market research
  1. Primary Research: First hand research which has not been published. Collected from questionnaires, interviews, surveys, etc.
  2. Secondary Research - Research that has already been published. e.g.from a website, newspaper, reports, etc.
  3. Quantitative Data - Factual information, e.g. Statistics
  4. Qualitative Data - opinions and views, e.g. how something tastes
  5. A business conducts market research to help identify gaps in the market and business opportunities.
2. Marketing is about responding to consumers' needs. It is important to find out what these needs are before launching a new product.
3. A market is any place where buyers and sellers meet to trade or purchase products
4. Market Segments - different groups of customers who share similar characteristics and buying habits
5. Competition
  1. A competitive market has many businesses trying to win the same customers.
  2. Price: If there are several retailers, each retailer will lower the price in an attempt to win customers.
  3. Product range: In order to attract and satisfy customers, companies need to produce products that are superior to their competitors.
  4. Customer service: Retailers that provide customers with a helpful and friendly service will win their loyalty.
Structuring a business
1. One method of organisation is to set up departments covering the four main areas of business activity:
  1. Finance
  2. Human resources
  3. Marketing
  4. Operations
2. Managers need to organise their staff and keep them motivated
3. Key terms:
  1. Hierarchy - refers to the management levels within an organisation.
  2. Line managers - are responsible for overseeing the work of other staff.
  3. Subordinates - report to other staff higher up the hierarchy. Subordinates are accountable to their line manager for their actions.
  4. Authority - refers to the power managers have to direct subordinates and make decisions.
  5. Delegation - when managers entrust tasks or decisions to subordinates.
  6. span of control - measures the number of subordinates reporting directly to a manager.
  7. chain of command - the path of authority along which instructions are passed, from the CEO downwards
4. Types of organistaions/ Structures
  1. Tall organisations have many levels of hierarchy. The span of control is narrow and there are opportunities for promotion. Lines of communication are long, making the firm unresponsive to change.
  2. In centralised organisations, the majority of decisions are taken by senior managers and then passed down the organisational hierarchy.
  3. Flat organisations have few levels of hierarchy. Lines of communication are short, making the firm responsive to change. A wide span of control means that tasks must be delegated and managers can feel overstretched.
  4. Decentralised organisations delegate authority down the chain of command, thus reducing the speed of decision making.
Motivation
1. Companies need to motivate workers in order to get them to work harder for them
2. Ways to motivate:
  1. Job enrichment : staff are given more interesting and challenging tasks.
  2. Empowerment : staff are given the authority to make decisions about how they do their job.
  3. Putting groups of workers in a team who are responsible together for completing a certain task.
  4. Fringe benefits: are payments in kind, eg a company car or staff discounts.
  5. Increase Pay slightly
  6. Performance related pay: staff get a bonus for meeting a target set by their manager.
3. Maslows' Hierarchy of needs (above) Explains why people work and if they are given these things it will motivate them in other ways than pay rise
Stakeholders
1. A stakeholder is anyone with an interest in a business. Stakeholders are individuals, groups or organisations that are affected by the activity of the business.
2. Examples
  1. Owners who are interested in how much profit the business makes.
  2. Customers who want the business to produce quality products at reasonable prices.
  3. Managers who are concerned about their salary.
  4. Workers who want to earn high wages and keep their jobs.
  5. Lenders who want to be repaid on time and in full.
3. Internal stakeholders are groups within a business - eg owners and workers. External stakeholders are groups outside a business - eg the community.
Ethics
1. Working ethically means acting in ways that are both fair and honest.
2. Ethical firms also carefully consider the implications of what they are doing and the effect it might have on the community and the environment.
3. Ethical behaviour requires firms to act in ways that stakeholders consider to be both fair and honest
4. Many owners believe that acting ethically increases costs and so reduces profits. e.g. child labour reduces costs but is unethical.
5. Pressure groups are organisations set up to try to influence what we think about the business and its environment.
6. A pressure group can challenge and even change the behaviour of a business by:
  1. running campaigns
  2. organising marches
  3. contacting the press
  4. writing letters to MPs

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