Investigating business resources - Free Essay Example

Sample details Pages: 26 Words: 7886 Downloads: 8 Date added: 2017/06/26 Category Business Essay Type Research paper Level High school Did you like this example? A Level Tasks Assignment 4: Investigating Business Resources The intention of this report is to present a report on costs and budgets and the need for controlling these elements of the business process. Every business is subjected to a range of different types of costs, some of which are more flexible than others. In general, these costs fall into three main categories. Don’t waste time! Our writers will create an original "Investigating business resources" essay for you Create order Fixed costs Fixed costs are those costs that cannot be changed irrespective of the performance of the business and its activities. In other words, whether the business has any revenue or not these costs have to be met. Examples of these costs would include most of those that apply to the business property, such as business property tax, any mortgage repayment and other regular monthly payments. In addition, fixed costs are incurred within the production process. This term is applied in this case in respect of the wages and salaries of the production staff. Semi-variable The next stage in cost types can be considered to be midway between those that are fixed and those that are totally flexible or variable. For example, whilst the basic wages of production workers and their managers come within the fixed cost element, overtime and other bonuses would be classed as semi-variable as they are attached to fixed costs. Variable Variable costs are those parts of business expenditure most directly related to the units of production generated by the business. For example, these include unit delivery costs, which, if at  £1 per unit produced would vary directly in relation to the units sold and the same would be the case with raw material costs (Stutely 2007, p.157). The budget is the used to allocate the use of business resources. At the preparation stage therefore it can be deemed to be a process where each department will bid for those resources. For example, the production department might ask for ten employees. Once finalised this represents the target of resources and expenditure that has been set for, and the various departments are targeted to work within these budgets. Break-even The purpose of a break even analysis from a financial view is intended to find out at what point revenue and costs equate, in other words that point where revenue loss turns into revenue plus. It is calculated by taking the fixed and variable costs and measuring them against revenue. Break even, as seen in the following graph. In this example, with fixed costs at  £1,000 per month and variable costs representing 20% of the revenue figure, the break even is reached at approximately  £1,250. On a monthly basis, if sales start at  £400 and increase by  £200 per month, break even occurs in month six. Variance analysis This process is used to identify why the actual costs have exceeded that which was budgeted (Drury 2004, p.659). The analysis needs to be conducted over all costs centres to determine whether variances can be controlled or if they are uncontrollable, Budgets and costs need monitoring for a number of reasons. Budgets provide the business with the opportunity of being able to control the performance of the business and allow management to allocate resources to the required parts of the operations (Rachlin 1998, p.1.1). The completed budget when set against actual results should therefore acts as an early warning of issues and problems that might arise within the business, for example, if sales are failing to hit target the budget should warn that either costs need to be reduced or the sales of units increase to avoid financial deficits occurring. For example, if we take the earlier break even graph and raise variable costs to 35% of sales the following occurs: We can see f rom this that break even has risen to around  £1,500 and taken a further two months to achieve, a position that might cause financial difficulties for the business if they do not have sufficient capital to fund this difference. Costs need to be controlled for the financial reasons as well as to ensure that resources are being adequate funded and profit levels maintained. For example, if variable cost on items such as motor or office equipment is too high, action might be taken by changing to more efficient forms of transport or finding a cheaper office equipment supplier, thus making savings and improving break even and profitability position. However, where the costs increases are uncontrollable, such as with fuel increases, other methods of reduction References Stutely, Richard (2007). The definitive Business Plan: The Fast Track to Intelligent Business Planning for Executives and Entrepreneurs. 2nd Edition. Pearson Education. Harlow, UK. Rachlin, Robert (1998). Handbook of Budgeting. John Wiley Sons Inc., New Jersey, US Drury, Colin (2004). Management and Cost Accounting. Thomson Learning, London, UK Assignment 5: Investigating Business Resources The purpose of this paper is to provide an interpretation of a corporationà ¢Ã¢â€š ¬Ã¢â€ž ¢s financial statements and also to illustrate how accounting rations can be used to provide an analysis of the financial position of the business. For the purpose of this exercise, the latest (2008) financial statements for Marks and Spencer Plc have been used, which are included within the appendix. Interpreting Profit and Loss Account The purpose of a profit and loss account is to provide details of the corporations trading performance (Parker 2007. p.2), normally covering the period of a year to the date identified, for example to 31st March 2007 for MS. This statement, by showing the total business revenue and deducting all of the costs that the business incurred in order to achieve that turnover, then establishes the profit (or loss) that the business has made during that year. The revenue less production and sales costs shows the gross profit earned and then, after deducting overheads and financial and other costs the operating profit (loss) will be calculated. Following other deductions such as taxation and extraordinary items, the remaining profit is available for shareholders. In the case of MS, operating profit was  £1,045.9 million and available for shareholders was  £659.9 million. By providing previous year comparisons, the PL account will also show whether the business performance has i mproved from previous years results. Investors will use the results of the PL accounts as part of the information needed to assess whether the business is likely to produce suitable return and growth on any intended investment. Interpreting Balance Sheets The business Balance Sheet serves a number of purposes. The main use is to establish the net worth of the business, which in the case of MS is  £1,648.2 million. However, it also indicates the level of debt and capital that is available within the business as well as providing a means for measuring the market valuation of the business. In respect of the former, it is clear from the MS balance sheet that the current and other liabilities at  £3,732.8 million, being less than total assets leaves the business with a positive net position and one that has seen steady improvement over the past three years. Ratios Using the same information, the financial state of the business can also be calculated by using a variety of accounting ratios. Solvency The solvency ratio is used to evaluate the firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s net profit after tax against its liabilities, which is intended to indicate the potential for the firm to continue to me it debt repayments. This ratio uses the following equation: After tax net profit + depreciation divided by Long Term Liabilities + Short term liabilities, Which for MS would produce the following result. 659.2 + .3 divided by 1,606.2 + 1,843.3 = 19.12% Generally it is considered that a ration of around 20% or more suggests a healthy organisation. Therefore it could be considered that MS is just on the edge of this position. Profitability Profitability can be measured by using a number of ratios. For example these could include gross profit margin, operating profit margin and return on equity. Gross profit margin = gross profit divided by revenue = 38.9% Operating profit margin = Operating Profit divided by revenue = 12.2% Return on equity = Profit attributable to shareholders divided by Average equity shareholdersà ¢Ã¢â€š ¬Ã¢â€ž ¢ funds = 46.3% As can be seen from the above and the performance indicators attached within the appendix all of the above ratios have delivered an improved position when compared with the previous year. Furthermore, as is equally apparent, there are a number of other ratios that can be used to determine both the financial health of the business and its potential reliability and returns from the viewpoint of a potential investor, which in terms of the latter includes the dividend cover. In summary therefore, the profit and loss accounts and balance sheets are used internally by the owners and externally by other stakeholders, including investors and lenders, to provide an indication of the financial performance of the business and the potential risk that it might present in terms of providing a reasonable return on investment and fulfilling its debt obligations. References Parker, R.H (2007). Understanding Company Financial Statements. 6th edition Penguin Books. London Marks and Spencer (2008). Financial Statements. Available from: https://www.marksandspencer.com/gp/node/n/56268031/026-5769384-5145243?ie=UTF8mnSBrand=core Appendix à ¢Ã¢â€š ¬Ã¢â‚¬Å" MS Financial Statements 2007 Assignment 1: Understanding the different types of business activity and ownership The purpose of this assignment is to evaluate two different sector organisations within a local council area. For this exercise the following two organisations have been chosen Tesco Oxfam Description of business Tesco is a commercial business operating in the retail supermarket sector. It is a nation-wide organisation and also has operations in other countries. The main purpose of this business is to provide retail products to the consumer, with the business aims being to provide success in terms of profits and added value to its owners, which are the business shareholders. The business is a public quoted corporation with shares quoted on the London Stock Exchange Oxfam is an organisation that operates within the voluntary sector. Like Tesco it has retail outlets that are spread across the UK. The purpose of this business is to raise funds, either through the retail operation or by way of donations, in order to help support development and aid projects being carried out within disaster areas and emerging countries. Although the business has a committee and board of directors, as it is ostensibly a non-profit making and charity business it has no owners, althou gh trustees are responsible to ensure that its affairs are properly conducted. Stakeholders Both of the above businesses have internal and external stakeholders, although these do differ in some areas. Customers Tesco and Oxfam have retail customers with whom they have to build an ongoing relationship. However, whilst Tesco spends considerable resources in endeavouring to attract and retain its customers, Oxfam relies more upon the goodwill and conscience of the consumer to encourage purchasing. Employees Both organisations have employees although different standards apply. Tesco employees are engaged with formal contracts and pay structures, whilst the majority of Oxfamà ¢Ã¢â€š ¬Ã¢â€ž ¢s retail employees are volunteers who donate their time for free. Owners The owners of the respective businesses are as indicated within the previous section of this paper. Trade unions Only Tesco has some degree of contact with trade unions, and this is through their representation of employees. Therefore the business has to accommodate and negotiate with these employee organisations on issues of employee concerns, for example pay and conditions. Other Stakeholders Both of the retail outlets have other stakeholders that they need to consider within their business operations. These include the local authority, where they have to ensure that the business operates within the conditions and legislation that apply to the local environment and consumer and other trading regulators, which dictate and ensure compliance with current retail and health and safety regulations. Finally, there are the political and judicial authorities. In this case the business have to ensure that all aspect of their operations comply with current legislation and regulations, be they national, regional and international. However, one difference between the two organisations is in respect of taxation. Being a charity Oxfam, unlike Tesco, is exempt from some of the business taxation rules. Assignment 3: Understanding different types of information and how it can be processed and be able to present information effectively The purpose of this paper is to select and manipulate business information within legally acceptable parameters. Marks and Spencer à ¢Ã¢â€š ¬Ã¢â‚¬Å" Plan A Newsletter Marks and Spencerà ¢Ã¢â€š ¬Ã¢â€ž ¢s Plan A is, in their words (MS 2008), à ¢Ã¢â€š ¬Ã…“our five-year,100-pointà ¢Ã¢â€š ¬Ã¢â€ž ¢Ecoà ¢Ã¢â€š ¬Ã¢â€ž ¢ plan to tackle some of the biggest challenges facing our business and our world.à ¢Ã¢â€š ¬Ã‚  The purpose of this plan is to provide the company with objectives and aims that will make its business and operations more environmentally friendly by the year 2012 as well as helping to improve the lifestyles and health of the community and its employees, both direct and in other areas of the supply chain. The plan covers five main areas. Climate change In relation to climate change MS is aiming to cut its carbon emissions by at least 20%. Plans to achieve this position include improving the à ¢Ã¢â€š ¬Ã…“Greenà ¢Ã¢â€š ¬Ã‚  efficiency of the retail stores as well as working with its suppliers to create à ¢Ã¢â€š ¬Ã‹Å"ecoà ¢Ã¢â€š ¬Ã¢â€ž ¢ friendly factories. In addition the business is aiming to cut emissions within its transportation sector by increasing the use of bio-fuels and sourcing products at a more local level, thus reducing the need for transport. Waste Waste is being addressed by improving the recycling facilities within the business and its products. This includes re-using waste to generate energy, reducing the level of packaging, particularly plastics, and discouraging customers from using plastic carrier bags. In addition, products will carry recycling advice. Sustainable raw materials With regard to sustainability, the business is intending to reduce the reliance upon finite resources. This will be accomplished by reducing water use in stores and using recycled material where possible in store and product construction. Fair partner MS is introducing measures to ensure fairness within its business operations and those of its suppliers. This includes ensuring that proper levels of labour standards and regulations are adopted across the business operations and that its suppliers get a fair deal. For example, it is working to ensure that farmers get a fair deal on their suppliers. Health In terms of health, the main thrust of this policy within the business is their aim to encourage healthier eating by providing consumer advice and ensuring that the retail stores contain the healthiest products. Impact of Plan A In the opinion of the author, in addition to the aims of this plan, it is anticipated that it will also have an impact upon the business. For example, with increasing consumer concerns about the issues covered, it is apparent that the MS policy will make it more attractive to the consumer as a brand because it is taking action. This potentially might lead to increase in revenues and profits as more consumers change to purchasing from the MS retailer. Mobile phone call price plans There is fierce competition amongst mobile phone, which results in competitive call plans. For example the following represent the current basic plans of four of the leading mobile providers MOBILE PHONE CALL PRICE PLANS Name Monthly Contract Free Free Length (Mths)] minutes Text O2 20 20.00 18 75 250 Vodaphone 15.00 18 75 250 Orange dolphin 20.00 12 50 75 Virgin 20.00 18 150 150 When considering the competitiveness of these providers it is suggested that the following three top the provide list. MOBILE PHONE CALL PRICE PLANS Most competitive Name Monthly Contract Free Free Length (Mths)] minutes Text Virgin 20.00 18 150 150 Vodaphone 15.00 18 75 250 O2 20 20.00 18 75 250 This information has been gathered from the websites of the respective businesses and is therefore considered to be primary and current. However, it is anticipated that due to the competitive environment such information would need to be reviewed at least quarterly. When presenting and analysing information in this manner it is important to remember that it adheres to current consumer act legislation. For example, this means that it must not be misleading or inaccurate. FTSE 400 Taking four FTSE 400 organisations, the following chart shows how these businesses have performed in terms of the percentage change between their high and low share value during the course of the past 52 weeks References Parker, R.H (2007). Understanding Company Financial Statements. 6th edition Penguin Books. London Marks and Spencer (2008). Plan A. Available from: https://www.marksandspencer.com/PlanA Assignment 1: Take two The purpose of this document is to prepare documentation that will assist in the development of marketing skills within the local business community in Leicester. Session 1 Marketing There are many definitions of marketing. Two of the most appropriate are as follows: à ¢Ã¢â€š ¬Ã…“A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with othersà ¢Ã¢â€š ¬Ã‚  (Kolter et al 2003, p.6) à ¢Ã¢â€š ¬Ã…“Marketing is the management process that identifies, anticipates and satisfies consumer requirements profitablyà ¢Ã¢â€š ¬Ã‚  (The Chartered Institute of Marketing). Of the two the former is perhaps most appropriate as it indicates that marketing is not simply a requirement of the commercial environment, which is relevant to the following element of this session. Organisational aims Within a local social environment there are three types of organisations, these being located within the private, public and voluntary sectors. Each if these types have their unique aims and objectives. The general aim of the private sector organisation is to is to achieve growth in market share, which it will enable it to generate more revenue from product or service sales, thus enabling it to add value for its shareholders and investors. For the public sector organisation the aim is provide a range of services that will help to maintain the civilised fabric of the local community, for example by providing waste disposal or policing services. Voluntary organisation aims objectives are based more upon either assisting members of the local or global community by increasing awareness relating to issues that are of concern, such as hunger and climate change, or to fulfil the interests of its members. Marketing support In general terms marketing and the marketing mix hel p to support the aims of these organisations by providing them with a platform across which they can pass the message of the organisations aims to the end user or intended recipient. In terms of the private sector organisation the marketing mix is used to enable the business to identify and target the consumer segment that is likely to purchase their product or service. It therefore reduces costs and improves the effectiveness of the message. For the public sector the marketing mix is designed to enable the organisation to promote the benefit that is service provision is bringing to the local community. In addition, more recently this mix has been used to act as a method of transparency in providing the community with accountability in terms of the results achieved by the public sector as a measurement of value for money demanded. In the voluntary sector the prime purpose of the marketing mix is to increase awareness of the issues the organisation is endeavouring to address . For example, animal welfare organisations use marketing to increase awareness of cruelty. In addition the message is also intended to encourage community donations, either financial or in terms of time and effort. Session 2 The marketing mix is applied differently to organisations depending upon their sector, as can be seen if we take the example of a commercial organisation and a public sector organisation. A commercial organisation will use segmentation within the marketing mix in order to identify the target consumer, thus effectively ignoring other groups. However, a public sector organisation, due to the duty that it owes to all residents within its area, cannot do this, as it needs to target the whole community. Similarly, where a commercial business will utilise all areas of the media to get its message across, public sector organisations rarely use television media, as it is not specifically targeted to the location that serves their interests. Both of the orga nisations are constrained by legal and ethical issues that relate to marketing, for example in terms of integrity, honesty and equality. Commercial organisations cannot make claims that are misleading in an effort to entice consumers to unfairly part with money. Similarly public sector organisations cannot discriminate within their marketing mix. In terms of ethics however, there is less control upon the commercial organisation as the recent trend towards shock advertising has shown. References Jobber David (2003). Principles and Practice of Marketing. 4th edition, McGraw Hill, Maidenhead, UK Belch, George E (2004). Advertising and Promotion: An integrated Marketing Communications Perspective, McGraw Hill, New York, US Kotler, Philip et al (2004), Principles of Marketing, 4th European Edition, FT Prentice Hall, Harlow, UK Assignment 2: Marketing techniques Today Young Fashions Ltd uses a number of marketing techniques in order to increase the demand for our range of clothing products and the purpose of this document is to provide an evaluation of the current range of techniques used, their effectiveness and to identify areas where improvements might be made. TYF fashion products are specifically designed for the younger consumer and intended to provide them with a brand image that addresses their needs and expectations by creating a unique fashion statement within their peer groups. The segmentation approach used by TYF has been based upon a consumer age demographics (McDonald and Dunbar 2007) that allow us to identify the target consumer market, which consists of consumers between the ages of 18 to 30. Using and communicating with this demographic segment, the business is able to development fashion clothing that will appeal to this market and that has a design that other consumers will seen as unique to that group. The intent ion is to enable the business to create a brand that is instantly associated by young people as a fashion icon (Temporal 2002), as happened with Levià ¢Ã¢â€š ¬Ã¢â€ž ¢s and Nike. In terms of price, the business conducts competitor research to ensure that the prices of our products, whilst remaining reasonably competitive, reflect the uniqueness of the brand. From a promotional viewpoint, the business employs the services of young celebrities with the same age group as our target market as research has shown that this increases the peer pressure and thus the numbers of unit sold. In terms of the location (or place) through which our products are marketed the business uses the high street stores that have direct youth market appeal, such as Gap and Next and avoids those which appeal to the more mature age group, which includes stores such as Debenhams and Marks and Spencer. Marketing elements and their benefits Segmentation is a process by which a market can be broken into sm aller consumer groups from which a marketer can more easily select those consumers that form the most appropriate purchases for its products (Kolter et al 2004, p.37). As indicated in the previous section, this has enabled TYF to identify the youth age segment of consumers that our products are designed for. Using the results of segmentation, the business targets the consumers within that group. In other words its promotional campaign can be directed more efficiently to encourage those who use the product to purchase. The use of Celebrities within TYF promotions appeals directly to the young consumers desires and wants in terms of peer recognition. The marketing mix is strengthened by the fact that the fashion goods produced by TYF are positioned correctly. In other words they are offered for sale in outlets that attract the attention of the consumer segment that TYF are targeting. Other important elements of the marketing mix are the branding and market planning. At TYF we have created a brand that fits in with the young consumer image. By this method, we have created an immediately recognisable brand, the intention of which is to differentiate our products from those of the competitor, thus making them unique. By concentrating our market plan upon all the above elements we are able to produce a marketing mix that is determined at assisting the business in achieving its aims and objectives. Recommendations However, despite the fact that the methods currently used have increased our market share, there are areas where it is considered that it could benefit from improvement. The most apparent of these is in relation to the changing consumer purchasing patterns. This relates particularly to the Internet. Recently there has been an increase in social networks on the Internet, many of which are frequented by consumers within the TYF market segment. This means that the market environment is changing. It is anticipated that, if the business were to become involved within these social networks it would benefit in three ways. Firstly, from the consumer viewpoint it would lead to the development of a closer relationship between the TYF brand and its customers. Secondly, it would provide the business with additional information in terms of being able to identify consumer changing needs and desires, thus giving us an advantage in relation to new product development. Finally, it would allow TYF to consolidate and increase its competitive advantage over its competitor. The result would be an increase in market sale and revenue. References McDonald, Malcolm and Dunbar, Ian (2004). Market Segmentation: How to do it, How to Profit from it. Elsevier Butterworth-Heinemann, Burlington, US Temporal, Paul (2002). Advanced Brand Management: From Vision to Valuation. John Wiley Sons Inc, Singapore Kotler, Philip et al (2004), Principles of Marketing, 4th European Edition, FT Prentice Hall, Harlow, UK Assignment 3: Introduction to Marketing With changes in lifestyle patterns leading to an increase in the numbers of people who are opting to eat out more often, restaurants and other food outlets have to review the techniques they are using for the marketing and promotion of their business. Within this paper it is the authorà ¢Ã¢â€š ¬Ã¢â€ž ¢s intention to provide an overview of two analytical techniques that can be applied to a business and identify how these influence the marketing decisions of a restaurant business. The outlet chosen for this exercise is one of the Spring Inns group of pub/restaurants, namely the Bell Fountain Inn located in Leicester. Analytical techniques Two of the most popular analytical techniques used to understand how businesses use marketing information are the Boston Matrix and business or product life cycle methods (see figures 1 and 2 respectively). Figure 1 Boston Matrix Source: Jobber 2003, p.318 Figure 2 Product life cycle Source: Porter 2004, p.158 The Bosto n Matrix technique works on the basis of calculating the position of a particular product or business by relating its market share to its growth rate. For example, where the market share that the business or product holds is high but the growth rate is low it determines that the business is a à ¢Ã¢â€š ¬Ã…“cash cowà ¢Ã¢â€š ¬Ã‚  (figure 1), in other words it is in a position where there is little need to continue major investment as the product will continue to generate revenue without serious need for further investment. Conversely, if market share is low and growth is the same, this indicates a problem product that is failing to produce a reasonable return on investment and, potentially, should be considered for discontinuance as a result of that failure. All products and services have a lifestyle pattern that is similar in pattern to the human life cycle (Porter 2004), in that there is a birth, growth, maturity and decline. In many ways this technique can be compared with t he Boston Matrix. For example, a product or service that has reached maturity can be likened to the à ¢Ã¢â€š ¬Ã…“cash cowà ¢Ã¢â€š ¬Ã‚  in that it has achieved a high market share and thus the growth in this area has slowed. The Bell Fountain in Leicester offers two products, these being the normal public house facilities and products combined with a food outlet. Until mid 2007 it could be said that these products held distinctly different positions when related to the two analytical techniques outlined above. The pub element was at that time well into the maturity phase of the life cycle and therefore could be considered to be a cash cow. However the food element was a fairly recent addition and therefore was still within its growth cycle, which in terms of the Boston matrix would have seen it defined as a star. However, following the smoking ban introduced in 2007 the pub element of the business entered into the decline part of the life cycle as those consumers who were attracted to the location for drinking purposes only began to dwindle rapidly. This left the business in a situation where it needed to re-evaluate its marketing decisions. Use of analytical techniques in marketing decisions Prior to the smoking ban the Bell Fountain had only involved itself in a limited amount of promotional activity. The public house element of the business was at a high level of local market share and thus required only limited marketing activity to enable it to continue a small and steady growth. However, the ban sent this element into decline and the business had to make a decision as to how to regenerate this element of the business. The decision was made that, rather than invest in promotion of a product that was seeing declining sales; the business would promote the food element of the product range more heavily. The argument for this move was that it would enable the business to create a new market for the pub products from the new consumer segment that are looking to opt out from eating at home. This has proved to be successful and the business is reporting that revenue for the pub element of its product range are now seeing an increase as more people are ordering drinks to go with their meals. References Porter M.E (2004). Competitive Strategy: Techniques for Analysing Industries and Competitors. The Free Press, New York, US Jobber David (2003). Principles and Practice of Marketing. 4th edition, McGraw Hill, Maidenhead, UK Kotler, Philip et al (2004), Principles of Marketing, 4th European Edition, FT Prentice Hall, Harlow, UK Assignment 3: The advertising agency Following a request from the new marketing director of X Ltd, this report outlines the role and benefits of advertising agencies and the media in the development of a successful promotional campaign. The role of advertising agencies and the media The role of the advertising agency has three elements attached to it. In essence the most important of these is to help the business to plan and create the appropriate message that the corporation wishes to present to the consumer (Kolter et al 2004, p .89). For instance, in the case of a visual promotional campaign that will be seen in print or in a media such as television and cinema, the agency will design and script the message in a way that will promote the product in the right way and that will attract the attention of the reader or viewer. Secondly, it is part of the agencies task to make sure that the right markets for receiving that message are effectively targeted, thus reducing the potential for the message to be wasted. I n this case the agency, with the help of the business, will analyse the consumer segment to which the product or service is most appropriate and design a promotional campaign that is directed towards that segment. For example, if the product is directed towards the elderly the agency will select the appropriate television programmes and publications that attract this audience and readership to be included within the campaign focus. Finally, it is usually an integral part of the agencies role to evaluate and purchase the appropriate media space that is required for the promotion (Belch 2003, p.31). The role of the media, and all of its component parts, is essentially to be the vehicle that carries the marketersà ¢Ã¢â€š ¬Ã¢â€ž ¢ message direct to the intended consumer. For example, television media will carry a visual message of the product whilst the print media may be more appropriate for a message that requires a more detailed explanation of the product or service being offered (Jobber 2003, p.73). However the role of the media can also be useful in targeting. For example, its audience analysis can help corporations to direct their promotion to the right consumer audience. The recent spates of TV property renovation programmes are an example of this as they provide an ideal opportunity for DIY store promotional campaigns, as the viewers of these programmes would include the stores target audience and this type of media environment is rapidly expanding (Belch 2003, p.11). Benefits of using professional agencies The use of professional agencies can provide several benefits for the product or service seller. Perhaps the most important of these benefits is related to research. An experienced agency will either have available research information relating to the intended market for the promotion or have the tools and resources to be able to secure that information quickly and accurately (Kolter et al 2004, p.270). If the product is for a retail product f or example, the agency should be able to supply details of the appropriate consumers, the main competitors and the environment where promotion would be most effective. In addition, and as a result of their knowledge and experience, the professional agencies will be able to both create a design for the brand and ensure that it is targeted to the intended consumer. For example, for the food product the agency will be able to negotiate a television promotion that appears in during the course of a TV à ¢Ã¢â€š ¬Ã…“Soapà ¢Ã¢â€š ¬Ã‚  programme, which is when the household shopping person, often the mother, is most likely to be watching that specific TV channel. Whilst professional agencies can be expensive they should also be providing cost savings. This is achievable through a number of avenues. Firstly, their employment saves the business from engaging direct full time staff. Secondly, they can achieve discounts from the media carrying the promotion and finally they should be able to gain support for the product or service through the use of low cost media publicity (Kolter et al 2004, p.75). For example, it is often the case, particularly with regional newspapers, that an agency would be able to negotiate free publicity in terms of an editorial when they are placing promotional advertising in this particular medium. References Jobber David (2003). Principles and Practice of Marketing. 4th edition, McGraw Hill, Maidenhead, UK Belch, George E (2004). Advertising and Promotion: An integrated Marketing Communications Perspective, McGraw Hill, New York, US Kotler, Philip et al (2004), Principles of Marketing, 4th European Edition, FT Prentice Hall, Harlow, UK Assignment 2: Marketing research The purpose of this paper is to explain the benefits that can be gained for the organisation as a result of undertaking marketing research. Market research comprises a range of tools and processes designed to provide the corporation with a range and depth of information that will enable it to have a better understanding of the particular environment and market sector that it operates within (Kolter 2004 p.30), which includes information about the consumer, the business competitors and the other influences within the marketplace that are likely to have an impact upon the corporate objectives. The Customer The customer is the lifeblood of any business, as without them the business will not sell its products and generate revenue. Indeed it is not possible to create a successful product or service unless one is aware of whom this is being produced for and what needs it is fulfilling (Johnson et al 2007, p.345). Therefore it is important for the business to understand its target market and what their needs and expectations are. For example, if one is operating within the youth market it is important to identify such issues as where they are located, what influences their purchasing habits and what they are expecting from a particular product. For example, manufacturers such as Nike and Adidas have learnt over the years that by linking their products with particular sports teams or celebrities they can achieve success because of the peer pressure that such interests generates. Similarly, a significant number of young women tend to buy products that are endorsed by their favourite female celebrity, which is why perfumes and fashion ranges that have celebrity names attached to them are so successful. Furthermore, the consumer needs change. In the above celebrity example it may be that a new footballer emerges who creates that change or, alternatively, from a more practical example, there could be move from the current snack foods to a healthier option, thus making no-healthy foods less attractive. Unless a business undertakes consumer market research, which includes the use of surveys, interviews and other analysis tools, it will not be able to identify the target market for its product or service and the changing demands that occur within this target consumer segment. This is likely to have two consequences. Firstly, it will adversely affect the business capability to generate the level of revenue needed to ensure business success and, secondly, it limits the ability of the business to be able to build a relationship with the consumer that would encourage repeat purchasing and loyalty. The Competitor Gaining a competitive advantage with a particular business or its product and services relies upon a corporation providing its product with a unique differentiation, be that price, quality or some other factor that sets it apart from the product offered by other organisations within the market sector (Porter 2004, p.47). It is not possible to achieve this level of uniqueness unless one is fully aware of the benefits that a competitors products or service has. Furthermore, analysis of competitors is required to ensure that the business is aware of the potential threat that the se organisations pose to the successful launch and sales of a new product. Therefore it is important to maintain a constant level of research into the activities of competitors in order for the business to a) gain a competitive advantage and b) be able to efficiently and effectively respond to the threats and opportunities posed by competitors. The Market Environment Researching the market environment is also important if the business is to succeed (Kolter et al 2004, p.23). Markets are continually changing and only by understanding and responding to these changes will a business be able to maintain its competitive advantage. A prime example of this is in the field of technology where new developments occur at a rapid rate. The successful business uses market research to help it to adapt its products and operations to these changes, which enables a rapid response, for example in terms of improving its communications with customer by using the latest Internet opportunities. References Porter M.E (2004). Competitive Strategy: Techniques for Analysing Industries and Competitors. The Free Press, New York, US Johnson, G, Scholes, K and Whittington, R (2007), Exploring Corporate Strategy, 8th Edition: FT Prentice Hall, Harlow, UK Kotler, Philip et al (2004), Principles of Marketing, 4th European Edition, FT Prentice Hall, Harlow, UK Assignment 1: The promotional mix The purpose of this exercise is to present to the Holmes Advertising Agency an evaluation of the differentiation between the ways that a product and service based organisation would use the promotional mix to achieve its respective objectives. For the purpose of this exercise it is intended to use the Tesco Supermarket Chain and Direct Line insurance. The promotional mix comprises a number of component parts, each of which is designed to complement the others (Belch 2004, p.16). As Belch explains, these include advertising, direct marketing, interactive marketing, including Internet use, sales promotions, public relations and personal selling. Both Tesco and Direct Line use the advertising and direct marketing routes as it enables the businesses to reach a mass audience through various media (Jobber 2003, p.18). The advertising form of promotion, which includes television, radio and the printed press, uses space that is paid for to promote the message about their product or service and, in view of its blanket or relatively non-targeted element, is a non-personal approach. Direct marketing takes a different approach in that a) it is generally more targeted in its approach (Belch 2003, p.18) and therefore allows the marketer to communicate directly with its target consumer. Direct line has effectively used this method to assist in the elimination of intermediaries such as brokers (Kolter et al 2004, p.8). Tesco tends to use this method to communicate directly with those grocery customers that have enrolled for store or credit cards with the company. U nlike advertising, this method allows the response to the promotion to be measured (Jobber 2003, p.414), therefore allowing the marketer to be able to respond in a more positive manner. The Internet is used for interactive marketing by both companies in different ways. Whilst both use banner adverts on websites and search engines, which allows consumers to link directly with the business, Tesco uses this method to provide online retailing opportunity. Whilst Direct Lineà ¢Ã¢â€š ¬Ã¢â€ž ¢s interactive marketing promotion also allows for service purchase online, it also uses the corporate website as an extension of its customer care / call centre operations. Sales promotion is an incentive based promotional tool (Jobber 2003, p.414) used to encourage consumers to purchase from a particular product or service brand. Tesco use this method to great effect in terms of price promotions, often including two for one offers or special reductions on certain key product lines. Enticing th e consumer into the store with these offers allows the business to encourage sales of other products through their retail display system. Direct Line does not overtly offer direct price reductions, choosing instead the more covert sales promotions of extra discounts for second policyholders and offers such as a monthà ¢Ã¢â€š ¬Ã¢â€ž ¢s free cover. Public relations are the one aspect of the promotional mix that does not necessarily require a direct cost. It uses the media in a more used based method to promote the brand and place information about the business in the public domain and allows the business to stay in touch with the issues that mean something to the consumer, thus increasing the respect that the consumer holds for that brand (Belch 2004, p.23). For example, Tesco operates a computer for schools campaign, which whilst not directly related to any sale item, encourages parents to shop in their stores in a effort to help provide a better education for their children. In addition the business involves itself in social activities in the local community for the same reason, namely to build a closer relationship with the consumer that is intended to encourage loyalty. Personal selling is another part of the promotional mix that is directly related to the building of a relationship with the consumer. Although this element again has no direct cost, it is labour intensive in that it requires a direct line of communication between the business or its representative and the consumer (Jobber 2003, p.414). Tesco retail employees are encouraged to use the personal selling method by direct contact with the consumer in store, encouraging additional purchases. As there is seldom any direct physical contact with their consumers Direct Line uses the non-visual approach to personal selling through the staff employed at their call centres. References Jobber David (2003). Principles and Practice of Marketing. 4th edition, McGraw Hill, Maidenhead, UK Belch, George E (2004). Advertising and Promotion: An integrated Marketing Communications Perspective, McGraw Hill, New York, US Kotler, Philip et al (2004), Principles of Marketing, 4th European Edition, FT Prentice Hall, Harlow, UK Assignment 2: Promotion, promotion, promotion In recent years the health organisations have become increasingly concerned about the health risk that is attached to the fat content of snack foods such as crisps. Such is the level of concern that ofcom, the advertising regulator, is considering banning advertising for these products from childrenà ¢Ã¢â€š ¬Ã¢â€ž ¢s products. At the same time the consumer habits are also changing towards the selection of healthier foods products. In response to these changing demands Walkers, the UKà ¢Ã¢â€š ¬Ã¢â€ž ¢s biggest crisp producer has introduced a new product that contains at least 70% less saturated fat than previous crisp products. To increase awareness to this change the business has launched a  £20 million promotional campaign, which features the BBC sports presenter Gary Lineker. This move is seen as part of the marketing mix required to ensure the business maintains its market share and competitive advantage and, as a result, ensuring that the business achieves its financial objectives and corporate goals. The marketing mix is described as addressing the 4 pà ¢Ã¢â€š ¬Ã¢â€ž ¢s (Jobber 2003, p.17), these being product, price, promotion and place, with each of these contributing towards the business goal of ensuring that their product satisfies the needs of the consumer more appropriately than those of their competitors. In the case of the new Walkerà ¢Ã¢â€š ¬Ã¢â€ž ¢s crisp range mentioned above, the promotional campaign fits into this mix because it is the vehicle by which the company is able to communicate the beneficial aspects of its products t o the target market (Kolter et al 2004, p.34 and Johnson et al 2007, p.137), thus enticing them to purchase. Specifically, Walkerà ¢Ã¢â€š ¬Ã¢â€ž ¢s promotion will be aimed at passing on the message that they have positively responded to the change in consumer demand by developing a healthier option in their range of snack foods. At the same time it will serve to combat the negative influence that regulatorsà ¢Ã¢â€š ¬Ã¢â€ž ¢ comments might have upon the consumer perception of crisps as an appropriate healthy product, particularly in this case when it is consumed by children, which is a significant segment of the crisp consuming public. Promotion is as much a key element of the marketing mix as are the other three Pà ¢Ã¢â€š ¬Ã¢â€ž ¢s mentioned above. For example, if Walkerà ¢Ã¢â€š ¬Ã¢â€ž ¢s did not use a promotional campaign for communicating the new lower fat crisps the consumer, having no knowledge of this latest product, might decide to satisfy their demand for a healthier o ption by changing to a different brand that does promote these benefits. Thus lack of promotion might reduce product advantage and sales. Similarly, although the company rarely mentions the price of their products within promotional campaigns, this element of the mix does have an impact upon the structure and effectiveness of the promotional campaign. If consumers who respond to the campaign find that there is a significant price difference between the new product and its predecessor potentially this might also deter the purchase, especially if a competitor is offering a product that is perceived to have a price advantage for the same benefits. Furthermore, price and the profitability that the product produces for the business will also be influential in determining how much Walkers can afford to invest in the campaign without diminishing its margins (Jobber 2003, p.42). Finally, there is a significant link between the promotion and the place where the product can be located. With the Walkers crisp products, this place would essentially be a retail outlet, such as an independent or convenience store or supermarket. The fist aspect of this link is for the market to make sure that the business distribution network is sufficiently robust to be able to deliver the quantity of products to these stores to complement the promotional launch. The success of the campaign is highly dependent upon this element as without adequate availability for purchase this depreciates the levels of sales anticipated. Inadequacy in distribution not only impacts upon the cost effectiveness of the promotional campaign. It can also have a detrimental effect upon the consumerà ¢Ã¢â€š ¬Ã¢â€ž ¢s view of the reliability of the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s ability to be relied upon. Therefore it can be seen that although promotion has an individual place within the corporate strategy process, it does not have a beneficial influence upon the business objectives unless designed in conjun ction with the other elements of the marketing mix.