Political factors: new legislation can restrict the sales on a particular item therefore affecting the sales of that particular product. For example: Age restrictions for sales of alcohol and working hours, minimum wage which would affect their profit
Economical factors: the state of the ecomony can affect the sales of an organisation, for example, people won't have as much money to spend in the economic downturn.
Social factors: Ethnicity , Religion , lifestyle, age, gender, if something goes out of fashion it will no longer sell & the company will have to develop a new product.
Technical factors: Internet would be effective as its easier to obtain goods from online and their website should be laid out efficiently and made easy to read, however, it is costly and time consuming to train emplyees how to use it. The computer hardware also needs updating regularly. Email is also good as it is fast and effective however, it is prone to viruses and may distract employees.
Enviromental Factors: Green campaigners can boycot the store to influence them to sell 'enviromentally friendly' products and threated to stop shopping their if needs are not met. Try and reduce transport costs to recuce pollution by allowing factories to be closer by. The company needs to make ethical decisions and not exploit the environment or their workforce.
Competitive: If competitors lower prices, Ikea will also have to lower prices to stay popular & this may reduce overall profits. Research may need to be done into developing a new product if other competitors bring out a more pupular & renewed product.
Wednesday 18 November 2009
Describe how both horizontal & vertical intergration helps an organisation like irn bru become larger & more profitable?
If Irn Bru take over Coca-Cola they can gain all profits from Coca-Cola and their market share. They become involved with more people,coca colas contacts and customers which means they have less liability.
They can also broaden their customer network. For vertical intergration, if Irn Bru buy unto their bottle suppliers they no longer need to pay for transport costs which maximisises profitablitity. They benefit by making bottles for other companies which increases their profit.
If they bought out a small chain store they could sell their products cheaper than rivals, making their product more appealing.
HORIZONTAL: If Irn Bru had to merge with a company on the same level of production for example another fizzy drinks company- Coca Cola, they would become a stronger company with a wider target market. Stronger work force is created.
VERTICAL:By not paying transport expenses, this increases the profit for the company
They can also broaden their customer network. For vertical intergration, if Irn Bru buy unto their bottle suppliers they no longer need to pay for transport costs which maximisises profitablitity. They benefit by making bottles for other companies which increases their profit.
If they bought out a small chain store they could sell their products cheaper than rivals, making their product more appealing.
HORIZONTAL: If Irn Bru had to merge with a company on the same level of production for example another fizzy drinks company- Coca Cola, they would become a stronger company with a wider target market. Stronger work force is created.
VERTICAL:By not paying transport expenses, this increases the profit for the company
Nokia are concerned about poor sales of their new 3G phone.
· Make product cheaper than similar phones by cutting costs such as amount of materials used.
· More user friendly, easier to use, step by step tutorial.
· More applications etc.
· More memory storage.
· Advertise online, on TV, celebrity influence/endorsement.
· Free software updates.
· Better contract deals than other similar phones.
· Free insurance.
· Add features to make it more suitable for an undifferentiated market
· Make it more stylish by providing a range of covers & accessories to suit an undifferentiated market.
· Selling online.
· Get customer feedback so they can improve the product.
· Lower the price so it is more affordable, and therefore more people could buy it.Introduce better contract deals than others with the phone.
· More user friendly, easier to use, step by step tutorial.
· More applications etc.
· More memory storage.
· Advertise online, on TV, celebrity influence/endorsement.
· Free software updates.
· Better contract deals than other similar phones.
· Free insurance.
· Add features to make it more suitable for an undifferentiated market
· Make it more stylish by providing a range of covers & accessories to suit an undifferentiated market.
· Selling online.
· Get customer feedback so they can improve the product.
· Lower the price so it is more affordable, and therefore more people could buy it.Introduce better contract deals than others with the phone.
Richard Branson is launching Virgin Galactic. Describe how a manager could evaluate the effectiveness of a decision.
Using market research he can see how popular this would be, which would allow him to see how many sales he can make & which market it will target. This will enable him to perhaps style his product towards a more differentiated market.
He could look at sales figures to show how much it will cost to be a part of Virgin Galactic & see if it is profitable for Richard.
He could send out questionnaires, carry out surveys, polls to analyse how effective the service is to the public & this would also enable changes to be made if it was re-launched. For example if prices were too high changes could be made to the re-launched product to make it cheaper & increase sales.
Find out the profit margin which is an essential figure that shows you how much money the product made.
Carry out surveys, gather customer feedback and look at sales figures to see what needs to be improved in the product or service.
He could look at sales figures to show how much it will cost to be a part of Virgin Galactic & see if it is profitable for Richard.
He could send out questionnaires, carry out surveys, polls to analyse how effective the service is to the public & this would also enable changes to be made if it was re-launched. For example if prices were too high changes could be made to the re-launched product to make it cheaper & increase sales.
Find out the profit margin which is an essential figure that shows you how much money the product made.
Carry out surveys, gather customer feedback and look at sales figures to see what needs to be improved in the product or service.
Describe how 5 different stakeholders of Tunnock's could influence the organisation
o Customers can influence a business by no longer buying the product and moving their business elsewhere.
o Employees can demand a wage rise or take action, strike, work to rule, protest
o Managers can influence an organisation by hiring and firing staffing. They can also be responsible for important decision making.
o Owners: They could expand the business to an international market to make profits larger, build more shops which would mean transport costs would be reduced not having to transport goods as far. The owner may decide to shut down the business as they have the first say & this may result in major loss of jobs.
o Government: The government can introduce new laws & raise taxes which may deprive a business of making certain decisions. Build a ready made factory rent free for a year to give them a head start. They can give grants & money for every person they employ. They could issue grants which will help with the costs of the business.
Workers: could go on strike.
Banks could influence a business by not lending money to them, making it difficult to function & create any profit.
o Suppliers: The suppliers could stop supplying businesses with stock , they could also increase their selling prices which means the business would have to put their prices up.
o Employees can demand a wage rise or take action, strike, work to rule, protest
o Managers can influence an organisation by hiring and firing staffing. They can also be responsible for important decision making.
o Owners: They could expand the business to an international market to make profits larger, build more shops which would mean transport costs would be reduced not having to transport goods as far. The owner may decide to shut down the business as they have the first say & this may result in major loss of jobs.
o Government: The government can introduce new laws & raise taxes which may deprive a business of making certain decisions. Build a ready made factory rent free for a year to give them a head start. They can give grants & money for every person they employ. They could issue grants which will help with the costs of the business.
Workers: could go on strike.
Banks could influence a business by not lending money to them, making it difficult to function & create any profit.
o Suppliers: The suppliers could stop supplying businesses with stock , they could also increase their selling prices which means the business would have to put their prices up.
Explain the benefits to an organisation of using market segmentation.
They can increase profit potential by keeping costs down and not targeting unwanted customers. They can get ahead of the competition in specific parts of the market They can target their marketing towards customers who are most likely to buy their products.
They can improve the service which the offer to the customer. They can identify their most valuable and least valuable customers.
By doing market segmentation, it splits up the market into different groups with similar interests and it targets the market that you aim to. This in turn saves money for the company because they don't target customers that are not interested. This gains more profit for the company as they are not targeting the wrong customers.
Market segmentation also makes the company more competitive with other companies and also improves your position in the market as it shows that the company is strong.
1. Measurable: - it should be possible to determine the values of the variable used for the segmentation.
2. Relevant: - it should justify the expected profits and the growth potential.
3. Accessible: - the target customers must be reachable and servable for the organisation.
They can improve the service which the offer to the customer. They can identify their most valuable and least valuable customers.
By doing market segmentation, it splits up the market into different groups with similar interests and it targets the market that you aim to. This in turn saves money for the company because they don't target customers that are not interested. This gains more profit for the company as they are not targeting the wrong customers.
Market segmentation also makes the company more competitive with other companies and also improves your position in the market as it shows that the company is strong.
1. Measurable: - it should be possible to determine the values of the variable used for the segmentation.
2. Relevant: - it should justify the expected profits and the growth potential.
3. Accessible: - the target customers must be reachable and servable for the organisation.
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