service Environment will certainly influence the type of service that customers expect – if the reorganization of Book N’ More creates a high end store, then customer will expect high end service Students may identify the type of atmosphere that their target market will require i.e. food service will require fast service in an area set to house those who may read, work, and drink a fancy coffee customer at a kiosk may need a quick response from the floor staff to ensure that they are okay navigating the store on their own – a larger store will require floor staff to be readily available Explain factors affecting a business’s profit 8 Explain factors affecting pricing decisions Pricing depends on the objectives of price as it relates to the businesses profitability. The image of the business, supply and demand, the stage of the product life cycle, and the expense related to the product are all considerations. Four factors: costs/expenses; supply and demand; consumer perception; competition Pricing is a competitive tool – indicates quality to the consumer; is a function of supply and demand; position of the company in the market place; laws in place, break even point; economies of scale Participant should mention some of the above and how they affect the ability of the restaurant to offer specials on an on-going basis. They want to increase demand by increasing the number of patrons ordering before 5:00 pm, but cannot exceed capacity The participant should recognize some or all of the following factors: profit variable and fixed costs of the goods and/or services competition business law and ethics Explain factors affecting the extension of credit 2 Explain how organizations adapt to today’s markets Participants should discuss ways that organizations adapt to today’s markets. A business is constantly engaged in the process of renewal when they choose to use this data. Suggested responses may include: Using tools like SWOT analysis and environmental scans to identify ways the business can improve A SWOT analysis assesses a company’s strengths and weaknesses and the opportunities and threats that surround it An environmental scan is an analysis of outside information that may have an impact on an organization Utilize market research and analysis of consumer, competition and marketplace Determine the 4P’s of marketing as related to their organization and product: Product, price, place (distribution) and promotion Determine the 3C’s of their market strategy analysis Company, competition and customer In this case, market research of their store location and consumers would be needed, utilizing the 4P’s and 3C’s of marketing / focus on place,
stimulates sales Marketing image and publicity – builds an image of the store in the public’s mind about the store and its products Personal selling – the actions and behaviours of the sales persons in the store Quality of merchandise should be as advertised to maintain confidence in consumer marketplace Product – the goods should fit with the marketing strategies to attract the ideal consumer Retail store image has been shown to play an important role in store patronage, and it is widely accepted that psychological factors have a significant role in store image formation. Past research has often involved the measurement of tangible attributes, or links between store images and consumers’ self-images. Perceived store image and the personal values which underlie behavioural choices Identify customer’s buying motives for use in selling. 2 Identify desirable personality traits important to business Students may cite the “7 habits of highly effective people” (Independence – proactive, begin with end in mind, putting first things first, Interdependence – think win-win, seek first to understand then to be understood, synergize, continuous improvement – Sharpen the saw) or they may simply discuss desirable traits such as: confidence, flexibility, motivation, enthusiasm, creativity, intelligence, emotional intelligence, etc 3 Identify elements of promotional mix Advertising Newspaper, television ads Billboards and in-store displays Personal Selling Samples In-store face-to-face advertising Tele-marketing Sales Promotion Coupons, Sweepstakes/contest (Enter to win with purchase…) and Rebates Publicity/Public Relations Holding a charity event on behalf of the store/new department Host competition Host community event (Barbecue, Bake Sale etc.) 4 Identify factors affecting a business’s profit Profit is the monetary return a business` owner receives for taking the risk of investing in the business. Profit equals income less expenses. There are two types of profit: gross – the money left over after the cost of goods is subtracted from sales, and net – the money left over after the operating expenses are subtracted from the gross profit Factors that affect profit include: the demand for the good/service, expenses, prices, the economy, and chance. To increase profit, a business can increase worker efficiency, increase sales or decrease expenses Revenues: number sold * sales price per ruler Expenses: Fixed costs + (variable costs * number produced) 4 P’s of marketing – Product; Price; Place; Promotion