Marketing

How do you set prices?

Financial implications

Who is the competition& what are they doing?

Is there a demand forthe product?

Who are the customers?

Demand – need to research what customers want, how much they will pay and how often will they buy it.

Customers – target groups GenderAgeOccupation/Income groupRepeat salesHobbyLocation

Competition - their productstheir pricestheir promotionsis the market saturated?is there room for you?

Pricing Strategies:

•Market-led same level as competition

•Penetration low price to enter market, then increases as the product becomes more established

•Destruction price wars – knocking out competition through having a price war

•Added Value charge more for extras i.e. packaging

Human Resources

Skills

Training

Legal issues

Wages Retention

Recruitment

Facilities

Health & Safety

Legal aspects for human resources:

•Age limits

•Minimum wage

•Contract terms and conditions

•Discrimination – sex, age, race, religion

•Health and safety

•Payroll records

Physical Resource Planning

•Premises Planning

•Machinery and Equipment Planning

•Materials and stock

Premises Planning

Where?•High street•Work from home•E-commerce

•Buy or rent?

•Insurance

High Street – passing trade or need for offices

Home – i.e. photographers, designers, etc

E-Commerce – online business; can replace a shop, need storage space for goods; reliable postal/courier service

Laws:•Planning permission•Licences •Environmental restrictions

Insurance:•Fire•Theft•Business interruption•liability

Machinery and Equipment Planning

•Machinery needed

•Equipment needed

•Fixtures and Fittings

•Buy or lease:machinery i.e. engraverequipment i.e computer, photocopiervehicles i.e. van, sizetelephone i.e mobile/landline

Think about suppliers and their payment terms

Technology is constantly changing, do you lease or buy???

Managing materials and stock

Regular Suppliers: discountsmoney off for buying in bulkmoney off for early paymentreliabilitypayment terms – 30/60 days; interest free

Regular Purchases: quantitiesqualitytimingRight supplier (reputation)price

Managing Quality

•Quality chains – in the production process, staff looking at their own work

•Quality Circles – meetings to monitor quality and discuss problems, improvements are suggested.

•Quality Control – inspecting finished products

•ISO 9000 – International quality standard; has to achieve rigorous procedures; can use BSi kite mark

Monitoring quality

•Statistical Number of faultsSales figuresRepeat customer orders

•Customer feedback Questionnairesletters of complaint

•Targets and achievements – monitoring the business performance

COSTS

Start up costs “one off costs which have to be met before the business starts trading”

Running costs day to day costs incurred in the running of the business”

Start up costs

•Premises buying and getting a mortgagerenting (no major start up cost)

•Equipment depends on the type and size of the business, i.e.computerstelephonefurniturevehicles

•Fixtures and fittings carpetsshelving

Running Costs (A.K.A. Expenses)

•Production costs raw materialspackagingwages

•Marketing costs market researchpromotion/advertisingwebsite design and operationsales reps/direct mail

•Human Resources staff wagesrecruitment & training costshealth and safety requirements

•Administration insurancerent and ratesutilities and telephonepostagestationery