Lecture notes
Unit 2 - Business Functions whole unit notes Condensed
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- Unit 2 - Business Functions
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- WJEC
Unit 2 - Business Functions whole unit notes Condensed with graphs and images.
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, Functions & The Marketing MixFunctional Departments
● Functional Departments are departments with clearly defined roles and responsibilities
There are four main function areas in businesses;
1. Marketing (Sales and Marketing
2. Human Resources (Personnel)
3. Finance (Accounts)
4. Operations (Production)
Objectives
● A functional objective is an objective that one of the specific department have
● A corporate objective is an objective that relates to the business as a whole
Marketing
● Marketing is the process that involves identifying, anticipating and satisfying customers’ needs
profitability.
Marketing Involves
● Researching the market
● Analysing the market
● Setting marketing goals
● Developing marketing strategy
● Marketing Strategy should be based around the four P’s:
Place the Product at Promotional Price *Marketing Mix*
Market Orientation
● When a business bases its marketing mix on its perception of what the market wants
● A business will attempt to meet customer needs with little thought of internal strengths of the
business
● Theses businesses believe that as long as they can satisfy customers, they will be successful
Advantages
● Flexible changes in taste and fashion
● New products designed to meet customer needs
● Decisions based on effective market research
Disadvantages
● High cost of market research to understand market
● Constant internal change as the needs of the market are met
● Unpredictability of the future
● Previous product investment wasted
, Functions & The Marketing Mix
Product Orientation
● When a business bases its marketing mix on what the business sees as its internal strengths
● These businesses try to sell whatever they can make without trying to find out if its what the
customers want
● McDonald’s do this well with core products
Advantages
● Increased economies of scale
● Easier to apply production management methods
● Focus on product development
● Focus on quality
Disadvantages
● Changes in market structure will not be responded to
● Fashion and taste are not accounted for in the product development
Asset-led marketing
● When marketing decisions are based on the needs of the consumer and the strengths of the
business
● The ideal situation – focuses on both customers and businesses strengths
● Identify what you are good at and relate to customers needs
● E.g. Database marketing – Loyalty Cards —> customers habits —> Children’s products bought —>
Target back to school range
Advantages
● Quality of output
● Strengths linked to market needs
● Maximising returns from assets
● Progressive change
, Product
Product
● A product is any good or service that is offered for sale to customers
Product Portfolio
● The product portfolio is the mix of products the business produces and sells
● It is very beneficial because is:
● Spreads fixed costs
● Allows for greater EOS
● Allows the targeting of wider markets
● Reduces risk
● Creates opportunities for growth
Branding
● A brand is a product consumers rely on, for quality, value and service
Advantages
● Increased customer loyalty
● Separate the product from similar products
● Increase price inelasticity of demand
● Increase value of the business
Disadvantages
● High cost of advertising
● Poor brand value for one product can affect whole business
● Invite competition
● High cost of research and development
USP – Unique Selling Point
● A unique selling point means that a product/service has a feature that others similar products
don’t have
Differentiation
● This involves making your products different from competitors products
● How? –Promotion, Packaging, Additional features, Quality and reliability
● Differentiation helps create customer loyalty and gives business a competitive advantage
Why is having the correct products important?
● Wrong products will mean:
● No sales —> No profits
● Business failure
● Customers dissatisfied
● Poor branding
● Competitive disadvantage
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