Uploaded by Emin Yusuf Akyıldız

Business Notes

Guerilla Marketing: Guerrilla marketing is an advertisement strategy in which a company
uses surprise and/or unconventional interactions in order to promote a product or service.
Pricing Strategies:
Premium pricing: high price is used as a defining criterion. Such pricing strategies
work in segments and industries where a strong competitive advantage exists for the
company. Example: Porche in cars and Gillette in blades.
Penetration pricing: price is set artificially low to gain market share quickly. This is
done when a new product is being launched. It is understood that prices will be
raised once the promotion period is over and market share objectives are achieved.
Example: Mobile phone rates in India; housing loans etc.
Economy pricing: no-frills price. Margins are wafer thin; overheads like marketing
and advertising costs are very low. Targets the mass market and high market share.
Example: Friendly wash detergents; Nirma; local tea producers.
Skimming strategy: high price is charged for a product till such time as competitors
allow after which prices can be dropped. The idea is to recover maximum money
before the product or segment attracts more competitors who will lower profits for
all concerned. Example: the earliest prices for mobile phones, VCRs and other
electronic items where a few players ruled attracted lower cost Asian players.
Market Research:
o Primary Market Research: Primary market research is a process, where
organizations or businesses get in touch with the end consumers or employ a third
party to carry out relevant studies to collect data.
Secondary Market Research: Secondary research uses information that is organized
by outside source like government agencies, media, chambers of commerce etc. This
information is published in newspaper, magazines, books, company website, free
government and nongovernment agencies and so on. Secondary source makes use of
the following:
Public sources: Public sources like library are an awesome way of gathering
free information. Government libraries usually offer services free of cost and
a researcher can document available information.
Commercial sources: Commercial source although reliable are expensive.
Local newspapers, magazines, journal, television media are great commercial
sources to collect information.
Educational Institutions: Although not a very popular source of collecting
information, most universities and educational institutions are a rich source
of information as many research projects are carried out there than any
business sector.
Niche Market: Niche marketing is an advertising strategy that focuses on a unique target
market. Instead of marketing to everyone who could benefit from a product or service,
this strategy focuses exclusively on one group—a niche market—or demographic of
potential customers who would most benefit from the offerings.
Marketing Planning: Marketing Planning is what’s your strategies to be used to achieve your
companies’ and your objectives.
Factors of Production: Factors of production are the inputs available to supply goods and
services in economy. Four factors which are capital, enterprise, land and labor. A
company/organization needs to consider these factors in order to survive.
Price Skimming: Price skimming is used for technology advanced and initiative products. For
example, when company sell a new product, they set a price. Then, other companies
products’ price decide to first companies’ price.
Promotion: Promotion is the method of communication message to the market with the
intension of selling firm’s product. The objectives of promotional strategies are;
o Inform: Alert the market about the firm’s product.
o Persuade: Encourage customers to make a persuasion.
Above the Line (ATL): ATL Promotion is the form of paid for communication in the
independent mass media. It’s a form of promotion to reach a mass market.
TV, Internet, Newspaper, Radio.
However, this form of promotion is for larger organization, because of the cost, as it
very expensive.
Below the Line (BTL): A form promotion that refers to use of non-mass media promotional
activities, allowing to business to have direct control.
o Telemarketing
o E-Mail marketing
Differences Between ATL and BTL:
ATL marketing strategies uses traditional marketing mediums such as TV, Print Media, Radio
BTL marketing strategies on the other hand uses off-beat mediums. Some of the branches of
BTL marketing are telemarketing, internet marketing, visual merchandising, brand activation,
exhibitions etc.
ATL marketing strategies are targeted towards a large set of audience. It is an effective
medium to reach out the masses.
BTL advertising is the best option if you want to reach out to a specific set of audience. BTL
marketing activities give you access to address and communicate to a specific target group.
This ensures that your message is communicated to the right people at the right time. For
example BTL activities for retail stores gives you direct access to your customers
ATL marketing mediums are quite expensive. A slot at prime time will put a hole in your
When compared to ATL marketing activities, BTL marketing is relatively budget-friendly.
Explain the term intermediaries for Amazon in Turkey.
o The channel of distribution refers to the means used to get a product to the
consumer. Amazon is an online shopping company. And they don’t have any retailer
store. They use distributors like shipping companies and then they reach their
Explain why culture is important for business looking to expand overseas?
o Culture is an important factor for businesses that expands overseas because if you
do not know the culture in that country you will probably fail because the people
won’t get used to your product or treatment. Your product will be something
unusual and no one will want it.
Explain two benefits of aggregators (price comparison websites) to customers.
o Customers can get information and save money.
o Customers can catch some sale promotions and buy more product for same cost.
Explain 2 features of E-Commerce.
o It is accessible by everyone who has an access to internet. So its range is huge.
o It has 3 types: B2B, B2C, and C2C.
Explain one cost of E-Commerce.
o Security problems
o Site crash
Explain the following:
o B2B: B2B (Business-to-business) marketing is marketing of products from businesses
to other organizations. It may be for use in production of goods or for selling to other
consumers. For example Apple sells their products to MediaMarkt and then
MediaMarkt sells their product to customers.
o C2C: C2C (Customer-to-customer) marketing is marketing of products from customer
to other customers. It can be second-hand products that someone doesn’t need it
anymore and wants to sell it for less price than its first-hand price. For example a
person sells her used iPhone to someone else.
o B2C: B2C (Business-to-customer) marketing is marketing of products from business to
customers. It can be directly selling from manufacturers to customers or may be
from retail stores to customers. For example MediaMarkt sells a first-hand iPhone to
a person.
CT= Course Theory
CL= Case Link
SW= So What
4.8.6 Online Banking Fraud
a) One limitation of e-commerce is security problem, because there are so many fraudulent people
who tries to steal customers’ personal banking details. And customers are not informed enough and
they give their personal information to fraudulent people via e-mail but they do not know that if it is
bank or not.
And another limitation is that banks are cutting fees from e-commerce services. For example when
you want to transfer your money, they are taking a part from it because you are using their servers
and they want it as a cost of providing this service. But this is also effecting banks because they have
to spend so much money to experts and all of the workers just for e-commerce.
b) It saves so much time, it is free and 7/24 accessible. You do not have to go to a bank and spend
money and also time there.
3.1 Sources of Finance
Role of Finance:
- Capital expenditure: Finance spent on fixed assets e.g land, machinery, equipment, buildings
- Revenue expenditure: Payments for the daily running of the business e.g wages, raw
materials, rent and electricity
Internal Sources:
Owner’s capital (equity): Personal savings.
Retained profit: Retained profit is the profit kept in the company rather than paid out to
shareholders as a dividend.
Sale of assets: Selling the assets that you own.
Asset: Something that you own. For example; money in bank, school building, monetary physical.
Internal finance:
a) Personal savings would be an appropriate source of finance for a sole trader or partnership.
The amount of finance that can be raised from this method is dependent on the personal
savings of the owner.
b) Retained profit would be available to all types of business so long as the business is
profitable and has not recently started up. More often than not retained profit is insufficient
on its own to allow a business to expand.
c) Asset sales can be used by all businesses, so long as they are not a start-up business (since
the business will have no assets). Students may question whether a business which is
efficiently run will have any surplus assets to sell and whether asset sales will generate
sufficient finance for the business to pursue its objectives.
Why businesses need finance:
- Startup capital
- Working capital
- Expansion
- Emergency situations
- Research and development
Question 3.1.1 London Olympic Games
a) Capital expenditure is finance spent on fixed assets. For example bullet trains is an example
for capital expenditure. Revenue expenditure is payments for daily businesses. For example
wages of the constructors of bullet train is an example for revenue expenditure.
b) The employers of the UK Construction would benefit from being employed + earning an
income. However, the construction company would have to source finance to pay all the
c) The customers would benefit from the new trains that will come to the stations. And also
there will be more improvements of rail system. And an example for a disadvantage is that
maybe price of transportation will increase because of these improvements.
External Sources:
Short Term:
o Overdraft
o Trade credit
o Bank loan
o Factoring
o Leasing
o Med term loan
Long Term:
o Share issue
o Long term loan
o Venture cap
o Business angel
Question 3.1.3 Kellet School
d) Examine two alternative sources of finance that Kellet School could have used to finance its capital
I will examine two alternative sources of finance that Kellet School could use to finance its capital
Retained profit is one way to finance their capital expenditures. This is an example of internal source.
It means that the profit kept in the company rather than paid out to shareholders as a dividends.
From this money, they can finance their capital expenditures. But it can cause some problems
amongst the dividends because they can want their dividend payments fully.
One other way is, selling assets. If they sell one of their assets, they can finance the other ones. For
example if they sell their swimming pool to a swimming team, they will lose their monthly outgoings
and also they will earn money when they sell there. With this money, they can finance other assets
like auditorium or the library. But it can cause some problems amongst students which wants to use
the swimming pool. Maybe they can rent the swimming pool after they sell it.
Costs + Revenues
Start-up Costs:
Purchase building
Lease building
Capital expenditure
Running Costs:
Fixed costs (Rent, wages)
Variable costs (Raw materials, delivery, packaging)
o Variable costs are costs of production that change in proportion to the level of
output per unit.
Semi-variable costs