Product life cycle
Product life cycle Stage1- Development The business invests a lot of money into researching the market for the new product, developing the product, and market testing the product. At this stage of the life cycle the product is making no money for the company: on the contrary, it is COSTING money for the development. Stage 2- introduction The product is launched on the market. A promotion campaign and a large amount of advertising will take place at this stage. The product is still making a loss for the business, as sales are low. Stage3-Growth The product becomes known in the market: sales should start to increase. Advertising is continued, but less frequently than at the launch. The product should begin to make a profit. Stage 4- Maturity The product is now well established in the market. Promotion will be used to remind the consumer about the product. This is when the product reaches its highest sales and profit levels. At this stage the business may use an EXTENSION STRATEGY to prolong maturity. Stage 5-Saturation The market for the product becomes SATURATED. The only way to increase sales at this stage is to take them from competitors. Promotion strategies are used to do this. At this stage the business may also use an extension strategy to delay the products decline. Stage 6-Decline The product begins to lose its competitive edge. More rival products are
Product life cycle.
A product life cycle enables organisations to formulate short and long-term strategic objectives. It allows an organisation to evaluate the current position of its products and services. The product life cycle enables companies to maximise sales and produce the optimum output. After a period of development a product it is introduced or launched into the market. The product grows as it gains more customers. Eventually the market stabilises and the product goes into maturity, then after a period of time the product is overtaken by development and the introduction of superior competitors. It then goes into decline and is eventually withdrawn from the market. Most products fail in the introduction phase. Others have very cyclical maturity phases where declines see the product promoted to regain customers. This is known as an extension strategy. I shall now explain in more detail each stage of the product life cycle. Development * Heavy expenditure on market research and product development * Company incur loses at this point * An example of a product in the development stage is Blue Tooth mobile phones Introduction * The need for immediate profit is not a pressure, promotion expenditure exceeds slow sales * The product is promoted to create awareness * An example of a product in the introduction stage is duel record and play DVD players * If the product has no or few
Price Elasticity of Demand.
Price Elasticity of Demand. PED = % Change in Quantity Demanded % Change in Price Product Original Price (£) Sales Volume PED Revenue (£) Apples 0.45 300'000 2.0 35,000 Papaya 2.15 0'000 0.5 21'500 Apples. Change in Price = 15% PED = 2.0 Quantity Demanded = 15 x 2 = 30 % > New Sales volume will be 210'000 Papaya. Change in Price = 15% PED = 0.5 Quantity Demanded = 15 x 0.5 = 7.5% > New Sales volume will be 9'250 Product New Price (£) New Sales Volume PED Revenue (£) Apples 0.5175 210'000 2.0 08'675 Papaya 2.4725 9'250 0.5 22'870.625 From the information above it is obvious that the choice to make when increasing the price of the fruits would be to look at papaya as it will give a higher return than an increase on the price of apples. There are several factors that can affect supply and demand on every type of market; the fruit market is no exception. The main factor that could affect the market is the price of the product this will directly affect the demand for the product from consumers, with the increasing price elastic goods will see a fall in customers. This will be a very important factor when looking at importing exotic fruits as the tropical fruits will not have price elasticity as high as the price elasticity of traditional fruits such as apple, pears and plumbs this means that the importing company can charge a higher
This project requires me to produce a imaginary business.
INTRODUCTION This project requires me to produce a imaginary business. To do this I must research into all aspects of a business, using books, people, and computer resources. To help me do this I will create action plans, that I will evaluate and redesign as I proceed during the project. The reason for the action plan is to help keep track and organise what I am doing, it also shows points that I must cover for my business to be successful. In this project there are certain parts of the project that can be decided before I created an action plan; these are: What will I sell- I will sell video games. My shop name- I will call my shop "GAMES STATION". From what I already know I have decided to make my business a sole trader operation as these are the easiest to set up. Also in a sole trader business I will get to keep all of the profits. Also as I am a sole trader business there are less regulations that I have to comply with. As a sole trader I do not have to make my business accounts available to any one except the inland revenue. This is useful as it saves me time, and it keeps my business dealings secret to the public. AIMS & METHOD The aim of my store is primarily to be able to compete with other shops in the local area. Also to break even, but provide a high quality service to the public. Then it is to make a profit. For the first year the aim of my business will
This report analyses the marking environment of Gordon highlanders and segments the market to determine the relevant target customers and factors influencing visitors decision making.
Executive summary: Gordon Highlanders Museum (GHM) which is a tourist attraction in Aberdeen has a unique and attractive building with artifacts and themes being displayed spanning 200 years of regiment's history. A market evaluation of GHM illustrates that the performance of this museum is affected by various internal and external factors. Implementation of a good accounting system, analysing the trends of the competitors and research on the client base would be important as part of the micro environment. Technological factors like on-line museum, demographic factors like shift towards aging population and cultural trends have a favourable or unfavourable impact on the performance of GHM Report profiles that market for GHM is differentiated & products like display area, corporate hospitality, tea room and garden can be offered to different segments like students, corporates and adults or senior citizens respectively. Report also illustrate that the factors like reference groups influence school children, personality factors like lifestyles influence senior citizens or adults and social class influence corporates to visit GHM. Buying decisions of various segments can be attributed to Habitual Buying Behaviour & Variety-Seeking Buying Behaviour. TABLE OF CONTENTS Page .0
Total Quality Management.
University of Strathclyde Strathclyde Business School MSc Procurement Management Total Quality Management By: Maurice Morwood June 2003 Introduction As competition in the global marketplace increases the importance of quality and in particular Total Quality Management (TQM) has become a key management issue within most major corporations. (Dewhurst et al 1998). More and more companies are applying the principles of TQM and the topic is well publicised in many books and papers. The procurement function plays a key role within any company, as they are the link between the business and its suppliers. In essence the buyers interpret the requirements of the business and convert this into the materials required to satisfy the needs of the customer (Sullivan, 1999). Before attempting to answer the assignment questions it is important to try and understand the definition of the term "Total Quality Management". This is not an easy task as much has been written on this subject and most authors have their own thoughts and ideas as to what it is. In simplistic terms TQM is often defined as "A leadership philosophy and strategy that is based on continuous improvement of every process, empowerment of people, continuous learning, all creating transformations towards an organisation that is providing excellent products and services". (Dr R. Benner, 2001). . The costs and benefits
What is marketing ?
. INTRODUCTION. What is marketing ? According to 1) Oxford1 : 'The action or Business of bringing or sending to market.' 2) Kotler2 : 'Marketing is a social & managerial process by which individual & groups obtain what they want and need through creating, offering & exchanging products of value with others.' and 3) CIM3: 'Marketing is the management process responsible for identifying, anticipating and satisfying customers' requirements profitably.' These definitions focus on the mutual benefit /profitability exchange between the two parties. Marketing is therefore much more than just advertising & selling. The marketing concept requires commitment to customer's satisfaction and a flexibility to respond to customer requirements and changes in the commercial environment. Marketing is basically all about matching the offerings of the organization to the outside world. As many function within marketing i.e.: selling, advertising, R & D, market research concern themselves with the issues, problems and opportunities outside the organization and focus on responding to those external events. It's the strategic role of marketing4. Hence, Response and Sensitivity to the environment remain the acid test indicators of success or failure in business in general. 2. MARKETING ENVIRONMENTS The marketing environment consists of a complex set of interacting forces and influences,
What is marketing?
What is marketing? Marketing is not advertising, it is actually finding out who wants to buy your product. Marketing is finding out what a customer wants, and then giving them that. The goal of marketing is to predict what the customer wants in the future, by looking a past trends, and carry out market research. The goals of marketing are: * Increase sales * Increase market share * Improve image of business What is the point of market research? A business must find out how many people there are who will buy its product. This is where market research is used, market research is used to find out: * What parts of the product do people like or dislike * If people want the product * How much would they pay * Who, and where will they buy the product * Competition * What promotions to use What do I want to find out? I want to find out: * Are people thinking of buying electrical goods * competition in the area * What prices * Who will buy the product The information can be gathered by two methods: Primary research This is where the data is collected for a specific reason, this involves going out and carrying out questionnaires, and interviews. This method of research can be expensive and time consuming. There are different primary research methods these are: . Questionnaires 2. Interviews 3. Observations 4. Experiments Each method of primary research has