What business would you start with £10?

How would you or you and a few mates turn £10 into something really rather special ?  To find out more click here !

Now click here and here to see if you've got what it takes.  

To register for your 'Tenner' and to see how much you can make in the first four weeks of term 4 go pay a visit to Mr Thompson in BSO any lunchtime during the first week back at school.

If you have seen enough already and just wish to register to take part click the link here complete the pre-evaluation questionnaire and pop along to tell Mr Thompson that you have now applied 

Good luck and enjoy and keep up with thi things to do list below:

Mr T

Things to do:
w/c 15/02/16 click here
w/c 22/02/16 click here
w/c 29/02/16 click here

Business Support

Who do you go and see if you want to start up a business?

1. Accountants - Set up your company and your accounts including VAT and PAYE (employee Tax)
2. Solicitors - Help set up your legal requirements like LTD, PARTNERSHIP AGREEMENT
3. What is matched funding?
4. Business Angels and Venture capitalists - Dragons Den
5. Three Sources of business advice - Chamber of Commerce - Business Link
6. Shell Live Wire
7. Princess Trust
8. UK Intellectual Property Office - What is a patent?

What would you do with £10?

If you think you could turn £10 into something really much bigger and better click here to find out how !

Enjoy

Mr T

Lesson 2 Enterprise Skills and Qualities of successful entrepreneurs

Good morning year 9

Today we will look at the ANATOMY of the human body to describe some typical characteristics of successful entrepreneurs. This web-page describes their skill set rather well so click here and take a look!

During the practical activity you will start to identify the KEY ENTERPRISE SKILLS that have allowed them to see success in every business that they do.  Your challenge is to apply this to a business context.

• A 'can do' attitude 
• Decision maker
• Teamplayer / Teamworker
• Clear communicator
• Innovater
• Creativity
• Presntation skills
• Resillient
• Problem solver
• Questioner
• Understands business & finance
• Personal drive to make things happen
• Highly motivated
• Ambitious
• Independent worker 
• Serial risk taker

Homework for Wednesday 10th September 2014

• Identify at least TWO different entrepreneurs, that inspire and interest you about them and start to think about what skills and qualities they have which has made them successful.  I have attached a link here to see what the dragons are looking for as contestants enter the Den!.

Enjoy

Mr T

Understand what operational / business efficiency means and why it can make a business more competitive

Good afternoon year 9

1. The next challenge is to see what you know about business efficiency as a starting point.

1. Click on the link here and do the simple Efficiency Test.

There are many ways to consider cutting costs and we will look at many in more detail next year but here are the main concepts that you need to understand this year.  Click here to find out more. 

For those that like maths I have attached a graph here showing the relationship between efficiency (OUTPUT) and productivity (STAFF) You can test yourself again here once you have read the previous web link.

2. Improving efficiency. Lets see who is the quickest at summarising the notes on this page into their own words

3. Measuring efficiency - how can we do it? Click here Which option do you prefer and WHY?

4. Now lets play a game of connect 4 using what we have learned today.

Finally can we do the simple test that we started with to see how many can now get 10/10 click on the link here and redo the simple test

Enjoy

Mr T

Could you be the UK's next APP entreprenueur

Angry Birds the real working App.  Have you seen it yet.  Click here


Did you know?

that on your door step you have big organisations making news with their use off Apps on the Isle of Wight.  Island App developer wins national award click here and Applying for college has never been easier see how here

Todays lesson PowerPoint can be found here

Extension activities - complete your App design worksheet and send it to me after today?

Homework

For those who really would like to design their first App click here for the free download of App Inventor and this worksheet will allow you to test yourself to see how good you are.

Perhaps you should now be thinking about Computing and programming as an option in year 10. Worksheet challenge can be found here.

Good luck and enjoy

Mr T

GCSE Business Assessment - Extended writing - Cereal Design

Dear All

as promised the writing frame for your report.  Click here to download it.

Remember the best written work comes from the best research.

How big is the cereal market?  

Who are the main competitors?

What are the current health problems in the UK today?

What can we do to prevent these getting worse?

What does your research of the target market tell you?

I will attach an outline for your appendices here after the lesson today.

You only have TWO weeks to complete this work so make sure that you use all lesson time and home time tp make a proper job of it.

Well done and good luck

Mr T

Websites that you might find useful 

• Change for life
• Rank of UK Cereals on the market today
• List of breakfast cereals 
• Are UK Cereals really good for you or loaded with things that are clearly not

Top tips and revision topics for GCSE Business Studies 'Mock Exam' Wednesday 12th February 2014 - 2.10pm

Dear Year 9

As requested please find below the following links for the subjects you need to revise 

for the 'Mock Exam' next Tuesday

Sole Trader   

Video - Notes - Activity - Nine park question 

Partnerships  

Video - Notes - Activity - Exam responses  - Nine park question 

Place / Location - (doing business online v traditional shop on the high-street)

Video - Notes - Activity   Test  - Nine park question

Revenue and costs

Video - Notes - Activity - Nine park question 

Cash-flow

Video - Notes - Activity - Nine park question

Recruitment

Video - Notes - Activity - Test -  Nine park question 

Good luck and revise hard

Mr T

4.4 Protecting staff through legislation (laws)

10/10 Key term test - Legislation and the laws that protect employees

1. Employment law - some employers have always treated their employees fairly, many have not.  Legislation is designed to protect employees from businesses that may treat staff poorly to reduce costs.
2. Equal Pay Act (1970) - employers must pay men and women equal rates of pay for doing the same job.  What have Birmingham City Council be accused of recently
3. Minimum Wage Act (1998) - This law sets out the minimum wage per hour that a small business can pay its workers.  Paying someone less is a criminal offence.
4. Discrimination legislation - This legislation makes it illegal to discriminate against any person in the workplace on the grounds of sex, age, race and disability,  A decision to train and promote a worker can not base their decisions on these, 
5. Employment rights - employees have many rights in the work place.  These rights are made into legal acts so that workers can be protected from ruthless greedy employers.
6. Health & Safety - Employees have the right to work in a safe and healthy environment but they also have a responsibility for their own health and safety and that of others.  If the see or do something that puts others at risk they will be breaking this law.
7. Disability discrimination (2004) - This legislation is designed to protect disabled employees and applicants.  If a a new business advertised for an employee and the best candidate was disabled they would be breaking the law if they did not offer them the job. 
8. Maternity & Paternity leave - This law gives new parents previously women the right to take up to a year off work when they have a baby.  The mother is entitled to return to her previous job and not have to accept a demotion.  A business cannot dismiss a women because she is pregnant.  What are the current changes in the UK that will soon benefit fathers?
9. Contracts of employment - once  a job offer is made to an applicant and accepted the business is required to issue a contract of employment within 12 weeks of the employee starting the job.  This should state the terms and conditions of the job, pay, benefits, bonus, grievance procedures and notice periods.
10. Industrial tribunal - if an employee feels that they are being treated unfairly or have been treated outside the legislation that is designed to protect them they can appeal to the industrial tribunal.  This is a court that will listen to the evidence and make a decision on the case and award compensation and issue fines accordingly

Lesson objective: To understand:

• employment rights of workers
• the laws against discrimination at work and during recruitment
• how equal pay and minimum wage laws affect businesses
• Health and safety laws

The video clip will be used to develop your understanding click here to see it.

Examiners Tip

You will not have to name and quote specific laws in the exam.  You will just have to understand them and be able to explain their effect on a small business

Key concepts

• What do we mean by legislation?
• What is Discrimination?
• What is a Union?
• What is a contract of employment?

TODAYS EXTENSION  TASKS

Using the resources above to complete: 

1. In your teams research the internet and try to find stories in the news where companies have fallen fowl of not maintaining the law with regard to equal pay, minimum wage and discrimination law. What would such publicity do to any company that was found not to comply See links from BBC here and the article here in the Telegraph or this article on line here 

Stretch and Challenge

1. Now try this worksheet: Legislation affecting staff here
2. Now try this worksheet: Remuneration here
3. Now try this worksheet Treating staff fairly here
4. and finish with the TOPIC test here

4.2 People in business - Rewarding employees

10/10 key term test on employee reward

1. Skills - some jobs need specialised skills whereas others do not.  Employees will have developed their skills in practical activities and these will have been improved on over time.  The more skilled a worker the more he or she is likely to be paid examples include paint spraying, cooking skills etc
2. Experience - a worker with many years of experience of doing a job will expect to get paid much more than someone with very little experience.  Experience workers generally saves an organisation time, money and less mistakes
3. Competitive marketplace - employers will need to know what other businesses in the same market are paying their staff so that they can pay a competitive amount if they are to attract and retain their staff.
4. Wages - when an employee is paid a fixed amount for each hour or day that they work
5. Salary - When an employee is paid a fixed amount per month or year regardless of how many hours they work.
6. Pensions - Payments made to retired workers .  In addition to the state pension businesses are expected top offer their own pension scheme.
7. Training and development - most employees leave a company because they do not have a clear training and development plan that they can be a part of.  The best companies allow their employees to use some of their rewards on securing additional training and development opportunities
8. National minimum wage - this is a minimum pay set by the government and is currently £6.31 per hour for anyone over 21 years of age.
9. Monetary (financial) rewards - Rewards that is generated through being paid more money for working harder e.g. profit share, bonus, incentives, piece rate.
10. Non monetary rewards - Rewards which do not involve cash or financial incentives e.g. free uniform, discounted shopping, subsidised transport, childcare, additional holidays, meals on duty, private medical cover, 

Learning objectives

• Understand the factors that influence the levels of wages / salaries paid to workers
• understand the use of other monetary benefits
• Understand the use of non monetary benefits

4.1 (21) Recruitment and selection of staff

10/10 key term test - Selection and recruitment

1. Recruitment - attracting people to apply for a job vacancy
2. Job description - a detailed statement of the nature of the job and tasks involved
3. Person specification - a profile of the type of person likely to make a good applicant 
4. Application form - A form that employers ask you to complete so that they can save time and assess only the relevant information that they are looking for from potential applicants.  If these are not completed than candidates often send a CV.
5. Job advert - A summary of a job opportunity that identifies the key components of a job and the profile of the person the company is looking 
6. Internal recruitment - appointing an existing employee of the business to fill a vacancy
7. External recruitment - appointing an employee from another business to fill a vacancy
8. Part time, full time and casual jobs - Part time jobs involve working for part of a week e.g. 18hrs.  Full time jobs are often working for 37 hours a week or more.  Casual jobs are often zero hour contracts.
9. Shortlisting - choosing up to six candidates from all those who applied by measuring their skills,experience and profile against the requirements of the job
10. Selection process - the process of choosing the right person for a specific job.

This weeks lesson objective :

• Understand the need for small businesses to recruit workers
• Understand different recruitment methods

As a business grows it needs more staff but only ones who will be effective, work hard, have the relevant skills and experience and are likely to improve efficiency and productivity.  Finding new staff is not an easy process and it is the process that you need to be aware of for the Paper 2 and more importantly how effective the business can be in recruiting the right people

  By the end of today's lessons you will know:

• the seven steps of an employee recruitment process
• the key documents which will allow you to select the right candidates
• how to recognise the key elements of a job advert  

Pre-lesson starter activitES

Click here 

Recruitment at Twitter

Visual learners
Click the link here and watch part ONE of the 'Seven stages of recruitment' video here
Click the link here and watch part TWO of the recruitment process video here
Record the Seven stages of recruitment in a flow chart diagram

For those that prefer to read
Read the recruitment notes provided here? and answer the questions at the end of the pack

Activity
Using the job adverts provided here or find some on line carry out the following activity in pairs

• Select two job adverts, identify the main component parts by annotating on the job adverts and suggest which is the better advert and say why.  

You now have a choice or activities to do you can:

• Create a CV by clicking here and attach it to a covering letter and apply for your favorite job from the activity above suggesting why you think you are the most suitable candidate or if you don't like that use the powerpoint slide and template at the following link here.
• Carry out this Arcadia Worksheet activity and answer the questions about the case study by clicking here Either way you need to email me something to show me what you decided to do.
• For those that choose the CV I will interview you for the position next lesson so you might like to prepare for it using the powerpoint slides here

Extension Activity

• For those that have finished their work above yo might like to complete the brain of business worksheet attached here
• Recruitment worksheet click here
• Types of employment worksheet click here

Plenary

Complete the note-taker pack and topic test here

Preparation for next lesson - click here and start thinking about on the job and off the job types of training

Good luck and enjoy

Mr T

3.3 (20) Cash flow forecasting for business survival

Hi Year 10

10/10 key term test on the topic of cash-flow and survival

1. Cash - Money that the business has available to it straight away.  This would include cash in hand or money in its bank account.
2. Forecast - A technique where the business attempts to estimate future sales, cash flow or other financial variables.
3. Cash-flow forecast - A prediction or plan of the EXPECTED future cash, inflows and outflows from a business over a period of time.
4. Opening balance - The money the business has at the start of the month. It is the same as the closing balance from the previous month.
5. Receipts (cash in flows) - Cash that has come into the business during the month.
6. Payment (cash outflows) - cash that has been paid out to suppliers during the month.
7. Net cash-flow - The difference between the cash in and the cash out over a time period.
8. Closing balance - The amount of cash a business has available at the end of each month.
9. Cash-flow statement - This is a historic record of the ACTUAL cash inflows and cash outflows that have taken place over a period of time.
10. Insolvency - occurs when a business is not able to meet its financial commitments when they are due

Cash-flow forecasting is a very hands on topic but being able to calculate cash flow forecast tables is only half of the challenge.

A business will fail very quickly if it runs out of cash.  Cash flow forecasting ensures that you are looking at the months of the year when cash is both flowing into the business and hopefully at a rate quicker than it is flowing out.

Discussion

If a sole trader cannot pay a bill, creditors (people they owe money to) can take them to court.  If the court decides to make the person bankrupt, it can force the sale of his or her possessions in order to pay the bill.  Do you think that creditors which are often big companies like electricity suppliers should be allowed to do this? 

Cash shortages need to be identified so that you can do something about them before you run out of cash.  If you need to generate extra cash you need to be aware of when you will need to do this.  

• Cash flow forecasts allow a business to control the flows of cash
• Cash flows in and out of the business both when it starts up and when its operating
• Cash flow problems are one of the main causes of a business failure
• Businesses can help cash flow by increasing or spreading revenue.
• Businesses can help cash flow by decreasing or spreading costs.
• Cash flow forecasts are a powerful management tool.
• By identifying the months that have a negative net cash flow early can allow a business time to arrange additional sources of finance well in advance of it being required i.e. short term loans such as overdrafts etc or delay spending on capital items such as equipment !

Solutions to cash flow problems 

If a business has identified that it is short of cash it then needs to do something about it:

1. request an overdraft from the bank to bridge the termporary shortfall
2. Incentivise customers with a discount to pay up front when they order.
3. Incentivise with a discount that customers pay on delivery -   
4. Create other sales opportunities to sell other items to generate more cash
5. It could negotiate with its suppliers to pay later i.e. 30, 60 or 90 days after receiving the raw materials.
6. It could move to pay its staff monthly instead of weekly giving it an extra four weeks to raise the cash required to meet its payrol demands.
7. It could negotiate cheaper prices for raw materials (variable costs) and its fixed costs.
8. It could pay utility bills i.e. gas, electric and water monthly rather than when they land four times a year 

A level resources:

Cash-flow forecasting click here
Cash-flow problems - click here
Cash-flow solutions - click here


Nine mark question - click here

Good luck and enjoy

Mr T

3.2 Financial terms and basic calculations

10/10 Key term test

1. Sales Revenue
2. Selling price
3. Profit
4. Loss
5. Fixed Costs
6. Variable costs
7. Total costs
8. Break even point (BEP)
9. Gross profit
10. Net Profit

BBC bitesize video clip on costs click here

Sources of advice and guidance

Key term test 10/10 Sources of advice and guidance

1. Banks - high street banks all offer business banking services and free advice to new business start-ups.  Some even offer free banking for the first twelve months and free access to accountants and solicitors and free business software and business plan advice.
2. Chamber of commerce - These are local organisations made up of local businesses of all sizes and all types that link up to make a national network of support for local business
3. Shell Livewire - Provides help and support and a business start up kit for anyone wishing to start up a business.  This initiative is sponsored by Shell.
4. Princess Trust - this is a charitable organisation which provides support for unemployed people between the age of 18-30 years in setting up their own businesses.  Advise from business experts as well as grants and low interest rate loans and long term contact with a business mentor.
5. National Federation of Enterprise - Agencies set up to provide help and advice across the country. They work with Regional Development agencies to help start new business and create jobs 
6. Accountants - These people give support and advice with regard to setting up a business, registering for VAT and paying taxes.  Initial advice is often free.
7. Business Mentors - This is a person with business knowledge who can help and guide start up businesses on a voluntary basis
8. UKIPO.htm - The UK intellectual Property Office will advise on designs, trademarks, patents and copyright. 
9. Solicitors - Solicitors will help on legal matters such as setting up a private limited company (LTD) or drawing up franchise and partnership agreements
10. Matched funding -  When the business is expected to put in the same amount of money as a grant e.g. for every £1 of grant the business must invest £1 so that the business is half funded by both.

Finance and support for a SMALL business

10/10 Key term test - Sources of finance and support for a small start up business

1. Owners fund - This is finance based on the owners personal savings and money
2. Bank loan - medium term.  This needs to be applied for and repaid with interest in equal payments depending on the size of the loan.  This could be 12-60 months but could be requested in full at any stage if you miss a payment.
3. Overdraft - short term loan - This is the bank giving you permission to withdraw more money from a current account than is deposited e,g if you have £100 in the account and a £500 overdraft you can withdraw up to six hundred pound from this account.
4. Mortgage - long term loan usually used to pay for buildings, land or factories.  This property or land is always used as security for the loan.  If you cant repay the loan the bank or building society will repossess your property or land and sell it to pay the debt
5. Trade credit - short term - this is a short term agreement when suppliers allow you 30, 60 or 90 days to pay for your materials that you have ordered to make your products and may be used to start a business
6. Grants - This is finance that does not need to be repaid.  The government usually creates incentives to start up a business in parts of the country where unemployment is high.  The grant is designed to help with the start up costs in the hope that the company will grow and employ many workers 
7. Family and friends - Some cultures do not wish to borrow money or repay it with interest.  Instead family members will lend the money and in return take a share of the business and its profits.
8. Hire purchase - This is a method of buying something and paying for it in installments over a period of time.  This type of finance is usually used for purchasing vehicles such as cars or vans and does not require a lump sum to have the vehicle which otherwise may cost £20-40k.  A deposit of £4k and a monthly rental of £250 may be enough
9. Retained profits - This is profits made by the business and kept on one side from previous years trading by the business.  If a business is in its first year it will not have any of this finance.  It is a cheap method of finance as the loan does not incur interest charges and may be better put to use by investing it into more materials or equipment.  It does need to work harder than sitting in a bank account accruing interest at 2-4%
10. Venture capital - venture capital is finance from a private investor.  This could be a company or a successful entrepreneur who is interested in being a business angel in other companies.  The dragons den is a good example of these types on investors as they often lend a sum of money for a share of the business and its profits but only if they like the business idea 

The AQA Exam board requires you to ......

I've decided to use today to secure your FINANCE knowledge for PAPER !

Learning Outcome
By the end of this session you should know what is meant by:

1. The SOURCES OF FINANCE for a new business pages 52-56 core text
2. The SOURCES OF ADVICE and help for a new business pages 57-58
3. The KEY FINANCIAL TERMS used in a new business pages 60-64
4. how to calculate a businesses PROFIT & LOSS

First Task
Decide how you will underpin your knowledge for today's lesson - by doing so you are building your learning power.  You may choose to use a traditional text book as there is nothing wrong with that if your an auditory learner.  You might like to use the e-resources if your a visual learner or you might like to get a team of people together and collaborate your preparation and planning to create your best 9 mark article in the big task below if your a kinesthetic learner

Resources available 24/7

• DoingBusinesswithMrT 
• AQA Business Studies core text or the e-resources that you have now started using online by clicking the link below:

http://my.dynamic-learning.co.uk/Default.aspx?cid=15451es Paper 2 theory

Second task - Paper 1 Revision
Testing your own knowledge. So you think your a Finance expert do you:

• Sources of finance for start ups
• Sources of finance worksheet
• Key financial terms worksheet
• Calculating profit worksheet

Homework - Revise like mad...

Using the e-resources and the blog www.doing busiensswithmrt.com revise for the REAL Paper 1 RESIT 10th January 1012

You can now identify what you don't know based on your summer exam result and your current performance in the last TWO mocks !

• I will put all the KEY TERM TESTS on a separate page with the revision resources before Friday
• 
  
• I will also post refresher lessons and worksheets for you to do over the holiday to cover the topics we have not refreshed on.

• Mr Coakley has also posted you an e-test based on a case study so that you can win itune vouchers

Good luck and Enjoy
Happy Wednesday and make me proud !
Mr T

Marketing Mix Elements and PLACE

10/10 Key Term Test - Marketing Mix - Place

1. Market place - where all the buyers and sellers come together to trade.  Traditional markets have been replaced by online markets and supermarkets have reduced the number of independent shops
2. Channel of distribution - This describes how the ownership of a product passes from the producer to the final consumer
3. Producer / manufacturer - This is the company that makes the goods from the raw materials e.g. Cadbury's supply chocolate bars and Direct Line provide insurance cover.
4. Wholesaler - These businesses break bulk quantities.  They buy in large quantities from a producer and sell in smaller quantities to a retailer 
5. Retailer - These are shops that sell direct to customers / consumers
6. Consumer - These are the end user , or the person buying the product or service.  The buyer may not always be the user and vice versa!
7. e-commerce - direct marketing - transactions carried out between consumers and businesses entire;y over the internet 
8. Direct marketing - This occurs when there is a direct link from the producer to the consumer with no intermediaries.  Examples of this include, mail order, telesales, online selling. 
9. Intermediaries - these are the different levels that are involved in the distribution chain.  Each level will wish to make a profit out of handling the goods
10. International markets - these are customers overseas and small start up businesses can now trade globally because of e-commerce.  Companies however small can now reach all parts of the global marketplace through the creation of websites and online marketplaces such as Amazon and Ebay.

In the news Ryan Air and Easy Jet c 

Promoting a product how well did Levi Roots do click here

Above and below the line

Small businesses


Did you know? Some p

Group activity

Discussion

Web based activity

Summary 

• The marketing mix is the m 

Quick Quiz 14 Marketing mix elements and promotion

1. Describe 'above the line' promotion.
2. Describe 'below the line' promotion.
3. Name the two parts to promotion
4. Name three sponsored events
5. Name the three main factors that make for a suitable promotion
6. What is meant by 'reach'?
7. Give one benefit from advertising in a local newspaper.
8. Why are postcodes important to a small business?
9. How would a business judge if a promotion had been effective?
10. What does AIDA stand for?

Worksheet

Nine mark questions

2.6 Marketing Mix and the element - Promotion

10/10 Key Terms

1. Banners - an internet advert shown on another firms website
2. Advertising - communications to consumers to encourage them to buy a product. 
3. Flyers - Printed paper documents to quickly bring something to the attention of others.
4. Personal selling - employing a person to visit potential customers to persuade them to buy your goods or services.
5. Direct mail - sending promotional material directly to consumers 
6. Word of mouth recommendations - getting consumers to talk to their friends and family about your product of service.   
7. Websites - many businesses now have their own website to provide information about their business to consumers.
8. Posters - printed sheets designed to bring the product or service to the attention of existing or new customers and includes the product name, price, any promotion and where you can purchase the item.
9. Pop ups - an internet advert that 'pops up' in a new window when visiting another companies website.
10. A.I.D.A. An acronym that stands for attention, interest, desire, action and is used to explain the two half's of promotion activity.

In the news Ryan Air and Easy Jet c 

Promoting a product how well did Levi Roots do click here

Above and below the line

Small businesses


Did you know? Some p

Group activity

Discussion

Web based activity

Summary 

• The marketing mix is the m 

Quick Quiz 14 Marketing mix elements and promotion

1. Describe 'above the line' promotion.
2. Describe 'below the line' promotion.
3. Name the two parts to promotion
4. Name three sponsored events
5. Name the three main factors that make for a suitable promotion
6. What is meant by 'reach'?
7. Give one benefit from advertising in a local newspaper.
8. Why are postcodes important to a small business?
9. How would a business judge if a promotion had been effective?
10. What does AIDA stand for?

Worksheet

Nine mark questions

Marketing mix and the element PRICE

10/ 10 Key term test on the marketing mix and pricing

1. Selling price - the price a company sets to sell its goods and services at
2. Cost price - the cost of making or providing a product or service
3. Demand - the quantity that consumers are willing and able to buy at the current price level
4. Marketing mix  - a marketing tool of variables dictated by market research that need to be considered before a product or service is launched in the market.  
5. Value for money - a perception of value that consumers have of different quality products that indicates to them that the quality of a product is worth the selling price. 
6. Cost plus pricing -  a pricing strategy that is based on the cost plus the percentage of profit the business wishes to make on each product.
7. Quality products - products that are made to a quality standard and are either fit for purpose or made to a standard that meets or exceeds the expectations of the customer of a product at a particular price. 
8. Price range - a range of prices that the product could be perceived to be worth.  Competitors in the market may sell similar products at varying prices. 
9. Competitive pricing - a pricing strategy that is used to set prices in line with the competition.  Supermarkets use this when setting prices of their branded products and compete every week to tell consumers that their prices are cheaper or the same as other supermarkets.
10. Loss - when a business sets a price for a product or service below the cost price of making it or buying in the product or service.

Exam board expectations
Candidates need to have an understanding of the basic relationship between price and demand e.g. a price rise will probably affect the profits of a small business in a competitive market

In the news Ryan Air and Easy Jet continue to make a profit on the back of their low price model of air transport.  Easy Jet has been in operation since 1995 and in 2007 made over £200 million profit carrying over 37 million passengers.  Costs and prices are kept low through quick turn round times for planes and by cutting out frills and extra such as complimentary food and drink.  Charges are made for extras such as baggage on check in. 

Marketing Mix This is the balance of activities that go into selling a product or making a sale.  A successful product requires it to be made available to its customers at the right price and in the right place with appropriate and effective promotion.  Different businesses will adopt different mixes - some leading on product and some leading on price with some relying heavily on advertising.  For others it is convenience of availability such as 24hr banking over the internet.Most small businesses will have a limited budget for their marketing mix so will need to share it out with care 

Dividing the budget - 'value for money'

Price A key part of the mix is price.  It is important to understand the relationship between price and demand.  In  general the higher the price the less the product will be in demand.  Fewer people can afford it, and for many it will fall outside their acceptable price range or their idea of 'value for money'  They may also switch to cheaper substitutes if these are available.  Similarly if the price drops too low the customer may be suspicious of value.  If a jeweller dropped the price of a gold ring then the customer may assume that it is not really gold. 

Cost plus pricing. 
Did you know? Some pricing  strategies are more promotional.  A loss leader is where a product is priced so low it does not even cover its own costs.  Products such as milk and bread can often be used to get customers into the shop in the hope that they spend more on other products.

Group activity

Discussion

Web based activity

Summary 

• The marketing mix is the mixture of factors needed in order to sell a product
• It has four parts: product, price, promotion and place
• The four parts are often refereed to as the four P's
• Getting the right balance is more important then any one part
• The marketing mix will need to change over time and as other factors change
• Price is a key part of the mix
• Price should be set to cover costs
• Customers have an idea of 'value for money'; price must be set in this range  

Typical exam questions on the marketing mix elements and price

1. What is meant by the Four P's
2. What is the most important element of the marketing mix?
3. Why do small businesses have to be careful about marketing?
4. Why do different businesses have different marketing mixes?
5. What is meant by 'value for money'?
6. What is meant by a customers 'price range'?
7. What happens to the marketing mix over time?
8. What usually happens to demand if price goes up?
9. What is cost plus pricing?
10. What is competitive pricing?

Worksheet

Nine mark questions

Year 10 Controlled Assessment - Business Investigation - Indulge

Congratulations 

to the 23 business investigators who made it to Indulge and asked their questions to the owner.The video of their interview can be found above.  The transcript of the interview can be found here

A sound recording of the year nine interview can be found here.

They do seem to have a clear target market and be making the most of social media or do they? But why are they not attracting more baby boomers in the afternoon? 

That said the puddings look fab but what can they do in addition to sell more of them between the hours of midday and 5pm seven days a week? Is their own recipe Italian Ice Cream 'Gelati' worth the £2 per scoop outside London?  Is promoting it to Oxford University really the best idea to sell more of it? or could they introduce their own range to sell in local shops and cafe's, hotels and restaurants  throughout Oxford? Their premises on the Cowley Road is really rather small and for most of the time not very busy.  Would they be better having a fleet of bicycles making it available to tourists around Oxford whatever the weather?

Resources

• Writing template for those who need it!
• Research checklist for those that have no sources of data!
• Local demographics and statistics

Good luck and enjoy
Mr T