Advantages of price penetration Disadvantages of price penetration
● Low priced new products may ● Pricing low may affect the brand
attract high sales volumes image, making it appear cheap
● High sales volumes help to cut ● It may be hard to gain distribution
production costs per unit as the in more upmarket retail outlets,
producer can buy in bulk and due to mass market pricing
therefore get purchasing costs ● Pricing on the basis of value for
down money can cause customers to be
● Achieving high sales volumes very price sensitive
ensures that shops will provide high
distribution levels and good in store
displays
Place (distribution)
Place - refers to both the physical or virtual location from which a good or service can be
brought. Also the route it takes from manufacturer to consumer.
Place can include:
● Physical stores, ranging from supermarkets to corner shops
● Marketplaces, including weekly markets and even car boot sales
● Virtual markets e.g. eBay
● Mail order
Multi-channel distribution - the use by businesses of a range of outlets and methods to sell to
customers.
Physical market - a place where buyers and sellers meet face to face to carry out transactions.
Virtual market - a non-physical place where buyers and sellers can carry out transactions.
Producer - person or company that manufacture the product
Wholesaler - acts as an intermediary, buying in bulk from the manufacturer and breaking this
down into smaller quantities to sell to retailers or other businesses.
Retailer - acts as an intermediary between the manufacturer and/or the wholesaler to make
products available to the end customer.
Consumers - people who uses the product
,Agent - someone employed to make sales happen
E-commerce - sales of product via the internet
Intermediaries - stages which get you from producer to consumer
Channels of distribution - the routes a product takes from manufacturer to end consumer.
People, Process and Physical environment
In addition to product, price, place and promotion, the discerning customer is increasingly
forming judgements and making decisions based on three additional elements of the marketing
mix.
Businesses must therefore also ensure these elements complement the rest of the marketing
mix in order to maintain competitiveness.
People - the skills, qualifications, attitude, appearance and knowledge of those providing a
service or selling a good.
Process- the ease with which a good or service is acquired
Physical environment- the appearance, ambience, features, facilities and layout of the sales
outlet.
Influences on an integrated marketing mix
Its important that businesses maintain an integrated marketing mix. A high quality, premium
priced product will not sell if placed in a store generally associated with discount prices because
the target market is wrong.
Equally if placed in a high end store but where staff are unfriendly and the layout not conducive
to shopping, it will not sell.
Depending upon the nature of the product and the target market, the relative importance of the
different elements of the marketing mix will vary.
Digital marketing and E- commerce
Digital marketing - The promotion of products or brands via one or more forms of electronic
media.
E- commerce - is the use of the internet to provide a virtual location where buyers and sellers
meet and carry out transactions
The value :
- Allows small business to target a global market
- Allows businesses to gather customer information easily
, - Builds relationships through a more personal service by tracking buying habitats
Chapter 4 - Operations
The value of setting operational objectives
1. Costs - the cost of each individual product or service
2. Quality - q
uality of raw materials, processes, output and customer service to match customers’
expectations
3. Speed of response and flexibility - the speed which the customer needs are met and the ability to
tailor the goods to meet individuals needs
4. Dependability - Getting the right product, with the right quality and quantity to the right customer
on time
5. Environmental objectives - M
eeting targets to minimise any detrimental effects of the operations
of the business on the environment
6. Added value - T
he ability to ensure that the value of the output is higher than the sum of the value
of all the inputs
Internal and external influences on operational objective
Internal influences on operations objectives External influences on operation objectives
- Finance - Economic environment
- HR - Globalisation
- Resources available - Technological change
- Nature of product - Legal or political change
- Suppliers - Competitors actions
Interpretation of operational data
Labour productivity - measures the output per employee and is a measure of how productive
the workforce is
Labour productivity = output per time period/number of employees
Unit costs - the average cost because it takes into account the total costs of a business and
divides it by the level of output
Unit costs = total costs of production/ number of units of output produced
Capacity utilisation - the maximum amount a business can produce over a period of time given
the resources it has available
● Low priced new products may ● Pricing low may affect the brand
attract high sales volumes image, making it appear cheap
● High sales volumes help to cut ● It may be hard to gain distribution
production costs per unit as the in more upmarket retail outlets,
producer can buy in bulk and due to mass market pricing
therefore get purchasing costs ● Pricing on the basis of value for
down money can cause customers to be
● Achieving high sales volumes very price sensitive
ensures that shops will provide high
distribution levels and good in store
displays
Place (distribution)
Place - refers to both the physical or virtual location from which a good or service can be
brought. Also the route it takes from manufacturer to consumer.
Place can include:
● Physical stores, ranging from supermarkets to corner shops
● Marketplaces, including weekly markets and even car boot sales
● Virtual markets e.g. eBay
● Mail order
Multi-channel distribution - the use by businesses of a range of outlets and methods to sell to
customers.
Physical market - a place where buyers and sellers meet face to face to carry out transactions.
Virtual market - a non-physical place where buyers and sellers can carry out transactions.
Producer - person or company that manufacture the product
Wholesaler - acts as an intermediary, buying in bulk from the manufacturer and breaking this
down into smaller quantities to sell to retailers or other businesses.
Retailer - acts as an intermediary between the manufacturer and/or the wholesaler to make
products available to the end customer.
Consumers - people who uses the product
,Agent - someone employed to make sales happen
E-commerce - sales of product via the internet
Intermediaries - stages which get you from producer to consumer
Channels of distribution - the routes a product takes from manufacturer to end consumer.
People, Process and Physical environment
In addition to product, price, place and promotion, the discerning customer is increasingly
forming judgements and making decisions based on three additional elements of the marketing
mix.
Businesses must therefore also ensure these elements complement the rest of the marketing
mix in order to maintain competitiveness.
People - the skills, qualifications, attitude, appearance and knowledge of those providing a
service or selling a good.
Process- the ease with which a good or service is acquired
Physical environment- the appearance, ambience, features, facilities and layout of the sales
outlet.
Influences on an integrated marketing mix
Its important that businesses maintain an integrated marketing mix. A high quality, premium
priced product will not sell if placed in a store generally associated with discount prices because
the target market is wrong.
Equally if placed in a high end store but where staff are unfriendly and the layout not conducive
to shopping, it will not sell.
Depending upon the nature of the product and the target market, the relative importance of the
different elements of the marketing mix will vary.
Digital marketing and E- commerce
Digital marketing - The promotion of products or brands via one or more forms of electronic
media.
E- commerce - is the use of the internet to provide a virtual location where buyers and sellers
meet and carry out transactions
The value :
- Allows small business to target a global market
- Allows businesses to gather customer information easily
, - Builds relationships through a more personal service by tracking buying habitats
Chapter 4 - Operations
The value of setting operational objectives
1. Costs - the cost of each individual product or service
2. Quality - q
uality of raw materials, processes, output and customer service to match customers’
expectations
3. Speed of response and flexibility - the speed which the customer needs are met and the ability to
tailor the goods to meet individuals needs
4. Dependability - Getting the right product, with the right quality and quantity to the right customer
on time
5. Environmental objectives - M
eeting targets to minimise any detrimental effects of the operations
of the business on the environment
6. Added value - T
he ability to ensure that the value of the output is higher than the sum of the value
of all the inputs
Internal and external influences on operational objective
Internal influences on operations objectives External influences on operation objectives
- Finance - Economic environment
- HR - Globalisation
- Resources available - Technological change
- Nature of product - Legal or political change
- Suppliers - Competitors actions
Interpretation of operational data
Labour productivity - measures the output per employee and is a measure of how productive
the workforce is
Labour productivity = output per time period/number of employees
Unit costs - the average cost because it takes into account the total costs of a business and
divides it by the level of output
Unit costs = total costs of production/ number of units of output produced
Capacity utilisation - the maximum amount a business can produce over a period of time given
the resources it has available
