GCSE Business Studies

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.4 Making the Start- Up Effective

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Lesson Objectives

• To understand that a focus on the needs of the customer is essential to business success.

• To recognise the main elements of the marketing mix.

• To be able to identify key elements of the marketing mix in different contexts

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Starter activity

• Joe has just opened a new restaurant in York city centre.

• List the 3 MOST IMPORTANT things that Joe can do in order to make his business the most successful

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

A business must always remember that…

• In order for a business to survive it must provide what the customer wants.

The Consumer is King (or Queen)

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Identifying needBusinesses must understand what their customers wants from a product

Anticipating needsHow will customers needs change? Businesses must anticipate how fashions and trends will alter customers needs

Meeting Customers NeedsIdentifying and anticipating is not enough. Businesses must actually meet the needs of the customers

Customer Focus

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Task 1:

• Complete the table in your booklets.

• Explain, as a business person, why these three factors are important.

You have 7 minutes

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

The Marketing Mix

In order to meet customers needs, a business must:

– Sell them PRODUCTS that they want– Charge a PRICE they are willing to pay– Make them available in the right PLACE– Make them aware by using PROMOTION

These 4 elements are known as the “4 Ps of the marketing mix”

– PRODUCT– PRICE– PLACE– PROMOTION

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Place• Products must be available to buy at locations

convenient to customers. • Examples include

– Online– High Street– Shopping centre– Industrial Estate– Catalogue– Wholesaler

• The suitability of a location will depend on the product or service.

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Jack’s Restaurant

• Jack has just opened a new Mexican Restaurant called Tequila

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Task 2:

• In your booklets match the product to the location. Ensure you explain WHY you have made this decision

• You may match more than one product to the same location

A/B Extension: Jack has opened his new restaurant in the middle of York City Centre. Justify why you think this is a good location for his businessRemember for JUSTIFY questions you must analyse both sides of the argument.

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Product

• Consumers often have lots of choices as to which products they can buy

• When you think of Baked Beans, which brand do you think of?

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Product

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Product

• Because the consumer has lots of choice, the business needs to make their product/service the one that people think of first.

• This can be done using different techniques

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Specialised Versions

To attract a new audience,Example: Coca Cola brought out Coke Zero to appeal to men, as Diet Coke was seen as too feminine

Improvements “New Improved Flavour”Example: Herbal Essence shampoo recently brought out an advertising campaign to promote the new formula

Changed Packaging

To alter the brand image, or make the product look more currentExample: When smarties went from being in a circular tube to a hexagonal tube

New Technologies

Used all the time with electronicsExample: Retina displays on smart phones

Widening the product range

Branching out into other marketsExample: A lot of chocolate bars are now drinks/milkshakes and yoghurts

In your booklets write down your OWN definition of each of these strategies and come up with your OWN example

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Task 3: Suggestions

• Jack’s restaurant sells authentic Mexican food such as fajitas, nachos, burritos and tacos. He wants to attract new customers. Using the strategies above, suggest ways in which Jack could alter his product in order to increase sales.

A/A* - Suggestions for each strategyB – Suggestions for at least 4C – Suggestions for at least 3

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Promotion• Promotion involves telling consumers about your

products or services• There are 5 main methods:

Types of PromotionAdvertising

Public Relations

Direct Mailing

Sales Promotion

Packaging

•TV•Radio•Posters•Billboards•Newspapers•Magazines

•Must protect the product•Right size and shape to allow stacking for distribution•Have consumer appeal•Create seasonal looks

•Special Offers•Price Discounts•Vouchers•Free gifts•Prize Competitions

•Also known as JUNK MAIL• Involves sending mail to targeted customers

•Press Release•Organising Sponsorships•Damage Limitation

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Task 4:

• Jack has found that business for his Mexican Restaurant is slow during the week.

• He wants you to suggest a way for him to boost business during a week day.

• In your booklets, suggest one way in which you think Jack could increase sales on a week day

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Price• A product or service needs to be the right price in order to

attract customers. Ways of ensuring this is called PRICING STRATEGIES

Only useful for a limited time

Useful to get rid of old stock

Special price for a limited time

Promotional

Only lasts while there is no competition

Allows extra profits to be made

Start with a high price for a unique productSkimming

Cannot last long

Encourages people to try

Start with a low price to attract customers

Penetration

Price may not

be profitable

Price will be competitive

Charge a price similar to competitors

Competition

May not be able

to sell product!

Ensures a profit is made

Add % profit to the actual cost

Cost-Plus

DisadvantagesAdvantagesDefinitionStrategy

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Price

• Must reflect the value placed on the product by customers

• A high price usually = high quality• Determines how much entrepreneurs earn

from their work.• Price set must allow you to make a profit

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

The marketing Mix

• It is called a Mix because in order for a business to be successful it must have the right balance of Price, Product, Place and Promotion.

• It’s all about getting the mix right.

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Exam style questions

Why may customer focus be easier in a small business than a large one?

Students must explain why it might be easier in the small business (1 mark) and why it might be more difficult in the bigger business (1 mark)

“Customer focus might be easier in the small business because they are likely to have a smaller customer base, therefore recognising the customer needs will be easier. In a larger business there will be more customers therefore it will be harder to understand what they want on mass”

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Outline 2 possible benefits to Tesco from getting all their directors to spend one week a year as shop floor employees

• 1 mark per benefit (max 2)• 1 mark per explanation (max 2)

Possible benefits• They can see what its like to work for Tesco, therefore

understanding their employees needs more• They experience it first hand, and can therefore

identify weaknesses in the business• They can talk to customers, and can therefore identify

their needs

GCS

E Bu

sine

ss S

tudi

es U

nit 1

Intr

oduc

tion

To S

mal

l Bus

ines

ses

1.2

Mak

ing

the

star

t-up

effe

ctive

Superdrug wants to start selling Chanel products in their stores in the UK. Explain why Chanel might be right or wrong in trying to stop

Superdrug selling its products. Justify your answer

• Identify the pros of selling in Superdrug (1 max)• Explain pros (1 max)• Identify the cons of selling in Superdrug (1 max)• Explain the cons (1 marks)• Justify your final decision (2 marks)