I&S Notes PDF

Customer Needs Needs = Something that a person needs that is essential for them to survive Wants = Something that a person may desire but does not need to survive Businesses satisfy emotional, functional, social, convenience, health and more needs. 4 factors of production = Land, labor, capital,...

Customer Needs Needs = Something that a person needs that is essential for them to survive Wants = Something that a person may desire but does not need to survive Businesses satisfy emotional, functional, social, convenience, health and more needs. 4 factors of production = Land, labor, capital, entrepreneurship Entrepreneurs Define entrepreneur. A person who sets up a business or businesses and takes on the risks of the financial market in the hope of earning a profit. Real world examples: Andrew Carnegie, Jeff Bezos, Mark Zuckerberg Marketing Mix 4Ps = Price, Place, Product, Promotion Product - Fast moving consumer goods (FCMG) Products sold relatively quickly and cheaply, products that customers do not put much thought into purchase. Eg. Beans - Consumer perishables Products that have a finite or relatively short shelf life. Eg. Flowers - Consumer durables Products that have a longer shelf life, and do not need to be replaced often. Eg. Books, household items - Speciality products Products with unique characteristics or brand identification, and are not purchased often. Eg. Gucci Price - Cost-plus pricing A pricing strategy by which the selling price of a product is determined by adding a specific fixed percentage (a "markup") to the product's unit cost. - Psychological pricing A pricing strategy where the price is lowered to a number lower than a whole number. - Discrimination pricing  A pricing strategy where prices vary depending on factors such as age to a price that it believes the customer will agree to. - Loss leader A pricing strategy where a product’s price is making a negative profit, in the hope it garners more customers. Promotion Promotion is the venture of persuading customers to buy a product or service to increase sales Examples of promotion methods: 1. Email marketing 2. Advertising 3. Direct marketing 4. Social media 5. Sponsorships 3 Aims of Promotion: - To increase sales - Build brand awareness - Build customer loyalty AIDA: Attention, Interest, Desire, Action Place Retailers - A person or business who sells goods to the public in relatively small quantities for use or consumption rather than resale. Wholesalers - A person or business who buys goods in bulk and resells them to retailers. Zero level channel - Direct distribution from the manufacturer to the end customer One level channel - Adding 1 intermediary, for example a retailer between manufacturer and end customer. Two level channels - 2 intermediaries, for example a wholesaler and a retailer between the manufacturer and end customer. Revenue and Market Share Revenue = Total amount of money brought in by a company Market Share = The percentage of total sales in an industry generated by a company