Business Syllabus Notes (Marketing)
Business Syllabus Notes (Marketing)
Business Syllabus Notes (Marketing)
Outcomes
The student:
H2.1 describes and analyses business functions and operations and
their impact on business success
H3.1 explains management theories and strategies and their impact
on business
H3.2 evaluates the effectiveness of management in the organisation
and operations of business and its responsiveness to change
H3.3 analyses the impact of management decision-making on
stakeholders
H4.1 critically analyses the social and ethical responsibilities of
management
H4.2 evaluates management strategies in response to internal and
external factors
H5.1 selects, organises and evaluates information and sources for
usefulness and reliability
H5.3 communicates business information, ideas and issues, using
relevant business terminology and concepts in appropriate
forms.
Content
• management role
– interpersonal, informational, decisional
Description Activity
Role
• skills of management
– people skills, strategic thinking, vision, flexibility and
adaptability to change, self-managing, teamwork,
complex problem-solving and decision-making, ethical
and high personal standards
• In general, effective managers are those who:
- possess a range of specific management skills
- are able to use these skills in a number of managerial roles.
• Karpin Report (1995) identified a number of management skills.
Management skills
Social justice
Manage change Responsible
Being adaptable use of
to maintain economic
competitive resources and
advantage market power
Responsibility
of management
to stakeholders
Codes of practice Ecological
Acceptable sustainability
standards of Develop long-
business behaviour Compliance term strategies
with the law
Abide by the
country’s
laws
• classical-scientific
– management as planning, organising and controlling
– hierarchical organisational structure based on division of
labour
– autocratic leadership style
• The management philosophy adopted by a business will have an
enormous impact on all aspects of the business’s operations.
• Management functions:
- planning: a predetermined course of action. Involves
strategic, tactical and operational planning.
- organising: the range of activities that translate the
objectives into reality.
- controlling: compares what was intended to happen
with what has actually occurred.
Manager
• systems/contingency
– adapting management and organisational approaches to
circumstances
• The systems management approach views organisations as an
integrated process in which all the individual parts contribute to
the whole.
• A system contains:
- inputs – the resources used within the business
- transformational processes – converts the inputs into a
finished product
- outputs – information about how well the organisation
has performed in relation to its stated goals.
- feedback – the products and other outcomes.
• Contingency management approach stresses the need for
flexibility and adaptation of management practices and ideas to
suit a particular situation.
–
structural responses to change — outsourcing, flat
structures, strategic alliances and networks
• As the business environment changes, organisations examine
and modify their business structures.
Outcomes
The student:
H2.1 describes and analyses business functions and operations and
their impact on business success
H3.2 evaluates the effectiveness of management in the
organisation and operations of business and its
responsiveness to change
H3.3 analyses the impact of management decision-making on
stakeholders
H4.1 critically analyses the social and ethical responsibilities of
management
H4.2 evaluates management strategies in response to internal and
external factors
H5.1 selects, organises and evaluates information and sources for
usefulness and reliability
H5.2 plans and conducts an investigation into business to present
the findings in an appropriate business format
H5.3 communicates business information, ideas and issues, using
relevant business terminology and concepts in appropriate
forms
H5.4 applies mathematical concepts appropriately in business
situations.
Content
Address present
financial position Determine financial
Minimise financial elements of the plan
risks and losses
Interpret financial
reports
• Budgets provide information in quantitative terms (facts and
figures) about requirements to achieve a particular objective.
- Operating budget: relate to the main activities of an
organisation and may include budgets relating to sales,
production, raw materials, labour, expenses and cost of
goods sold.
- Project budget: relate to capital expenditure and
research and development.
- Financial budgets: relate to financial data and include
the budgeted revenue statement, balance sheet and cash
flows.
management of funds
• sources of funds
– internal — owners’ equity, retained profits
– external — short-term borrowing, (overdraft, bank bills),
long-term borrowing (mortgage, debentures) leasing,
factoring, venture capital, grants
• A business cannot establish itself and thrive without funds to
enable it to pursue its activities.
Debt Equity
Debt Equity
• Lenders have prior claim in • Shareholders have a residual
the event of liquidation. claim on
assets.
• Debt must be repaid by
periodic repayments. • No maturity date.
equity.
due.
Accounting Limitation
practice
Historical cost True value of assets may be understated or
overstated.
Value of No uniform method of valuing these, especially
intangibles goodwill.
• Cost-control measures:
- Fixed and variable costs – identify and account for expenses.
- Cost centres – managers accountable for their business unit
expenses.
- Expense minimisation – expenses budgets assist in cost
control.
– revenue controls — sales objectives, sales mix, pricing policy
• Revenue is the income earned from the main activity of a
business.
• Revenue-control measures:
- Sales objectives – set to generate maximum revenue.
- Sales mix – review each product’s profit margin contribution.
- Pricing policy – balance market share with profitability.
ethical and legal aspects
• audited accounts, inappropriate cut off periods, misuse of funds
• Australian Securities and Investments Commission
• corporate raiders and asset stripping.
• Strategies to assist ethical practices:
- Independently checked audited accounts. (An audit is an
independent check of the accuracy of financial records and
accounting procedures.)
- Code of ethics and internal controls minimises misuse of
funds.
- Australian Securities and Investment Commission
(ASIC) monitors business practices to ensure compliance with
the Corporations Law.
• Unethical practices:
- Creative accounting – inappropriate cut-off periods can
create a false financial position.
- Corporate raiders – manipulate share price.
- Asset stripping – sell assets after takeover.
9.3 HSC topic 3: Marketing
Outcomes
The student:
H1.2 critically analyses the role of business in Australia
H2.1 describes and analyses business functions and operations and
their impact on business success
H3.2 evaluates the effectiveness of management in the organisation
and operations of business and its responsiveness to change
H4.1 critically analyses the social and ethical responsibilities of
management
H5.1 selects, organises and evaluates information and sources for
usefulness and reliability
H5.2 plans and conducts an investigation into business to present the
findings in an appropriate business format
H5.3 communicates business information, ideas and issues, using
relevant business terminology and concepts in appropriate
forms.
Content
Role of marketing:
- Find out what customers want and then attempt to satisfy their
needs.
- Bring together the buyer and seller.
- Generate revenue for the business.
• A market is a group of individual, organisations or both that:
- need or want a product
- have the money to purchase the product
- are willing to spend their money to obtain the product
- are socially and legally authorised to purchase the product.
• types of markets — resource, industrial, intermediate, consumer,
mass, niche
- Resource markets:
Resource markets refer to business buyers who purchase the
factors of production which are:
o Land: agricultural, mineral deposits and forests
o Labour: people who provide skills for business needs
o Capital: economic sense (equipment)
o Enterprise: the risk- taking by entrepreneurs
- Industrial markets:
An industrial market provides products needed to manufacture
other products. E.g. coke buying aluminum cans for Alcom to
create a finished product
- Intermediate markets:
The intermediate market consists of goods purchased for resale.
These businesses buy these goods to resell them to its retail
customers.
- Consumer markets:
The consumer markets consists of personal buys such as clothes,
cds and foods.
- Mass markets:
The mass market refers to the larger number of customers who
want to buy a standard product such as electricity and petrol.
- Niche Markets:
Niche markets consist of buyers with specialized needs e.g. A first
class ticket on the Virgin Space flight or a rolex watch.
• production–selling–marketing orientation
Changes in marketing over time:
1. Production approach - Taking orders and delivering goods.
- 1820s to 1920s
- Emphasis on producing goods
- Demand for goods is greater than supply.
Just producing a product to fulfil customer requirement without offering
choice (sacrificing choice ) for a cheaper and low cost manufacturing
through large scale production. The model T manufactured by Henry
Ford in the 1920s is an excellent example. Henry boasted the customer
could have any colour so long as it was black.
Step Explanation
1. Determine The problem is clearly stated to
information needs determine what needs to be measured
and the issues involved.
2. Collect data from Data collected by mail, telephone and
primary and secondary personal surveys, personal observation
sources or from private data sources.
3. Analyse and Determine what the data means.
interpreting data
consisting of:
Segment 2
• objectives Mass market
• strategies
Primary target
market
• marketing mix
Segment 3
Outcomes
The student:
H2.1 describes and analyses business functions and operations and
their impact on business success
H2.2 evaluates processes and operations in global business
H3.2 evaluates the effectiveness of management in the organisation
and operations of business and its responsiveness to change
H3.3 analyses the impact of management decision-making on
stakeholders
H4.1 critically analyses the social and ethical responsibilities of
management
H4.2 evaluates management strategies in response to internal and
external factors
H5.1 selects, organises and evaluates information and sources for
usefulness and reliability
H5.2 plans and conducts an investigation into business to present the
findings in an appropriate business format
H5.3 communicates business information, ideas and issues, using
relevant business terminology and concepts in appropriate forms
H5.4 applies mathematical concepts appropriately in business
situations
Content
Employees Employers
Objectives Objectives
• better wages and • increase profit
conditions • increase
• job security flexibility
• participation in • minimise costs,
decisions be competitive
Conflict or cooperation
possible at all levels
Governments
Objectives
• global competitiveness
• higher living standards
and employment
• workplace reform
• compliance with
legislation
Australian Industrial
Relations Commission,
Federal Court,
Employment Advocate
• Employees are more highly educated than in the past. There are
many changes to employment conditions and basis of employment.
complaints.
making.
relations.
Outcomes
The student:
H1.1 explains the impact of the global business environment on
business role and structure
H1.2 critically analyses the role of business in Australia
H2.1 describes and analyses business functions and operations and
their impact on business success
H2.2 evaluates processes and operations in global business
H3.2 evaluates the effectiveness of management in the organisation
and operations of business and its responsiveness to change
H3.3 analyses the impact of management decision-making on
stakeholders
H4.1 critically analyses the social and ethical responsibilities of
management
H4.2 evaluates management strategies in response to internal and
external factors
H5.1 selects, organises and evaluates information and sources for
usefulness and reliability
H5.2 plans and conducts an investigation into business to present the
findings in an appropriate business format
H5.3 communicates business information, ideas and issues, using
relevant business terminology and concepts in appropriate forms
Content
globalisation
• nature and trends — growth of the global economy and changes in
markets (financial/capital, labour, consumer)
• The global economy is the world economy and refers to the
economic activity going on in the world.
Reason
Explanation
Increase If domestic markets are small in size or saturated,
sales/new overseas markets provide new opportunities.
markets
Acquire Access to raw materials and technology that are either
resources and too expensive or unavailable in the domestic country.
technology
Diversification - Geographic – markets across the world helps spread
the risk of falls in sales in any one market.
- Product – increasing the range of products sold.
- Supplier – less vulnerable to supply problems and
price rises.
Minimise Operating in many overseas markets can lessen
competitive exposure to competition.
risk
Economies of Cost savings gained when the scale of production
scale increases.
Cushioning Selling in numerous markets cushions the impact of a
economic cycle reduction in domestic demand.
Regulatory Taking advantage of differences in laws of the host
differences country to gain a cost advantage.
Tax Low-tax host countries offer incentives of tax holiday
minimisatio and tax haven.
n
– hedging
• Hedging reduces the risk of currency fluctuations.
- A spot exchange occurs when two parties agree to
exchange currency and finalise a deal immediately. Spot
exchange rates: the value of one currency in another
currency on a particular day.
Hedging (natural and financial instrument – derivatives) can be used
to minimise the risk of having to accept an unfavourable exchange
rate.
– derivatives
– Derivatives are financial instruments that may be used to
lessen the risk of currency fluctuations. There are three main
derivatives:
(i) Forward exchange contract: a contract to exchange one
currency for another currency at an agreed exchange rate on a
future date.
(ii) Options contract: gives the buyer (option holder) the right,
but not the obligation, to but or sell foreign currency at some
time in the future.
(iii) Swap contract: an agreement to exchange currency in the
spot market with an agreement to reverse the transaction in the
future.
– insurance
– Insurance: protection against default of payment, product
damage and financial risks.
– obtaining finance
– Obtaining finance.
(i) Domestic capital market: Australian banks and financial
institutions.
(ii) International capital market: international financial
institutions.
(iii) Eurocurrency market: nominating a currency of choice –
US dollar, Deutschmark, British pound, Japanese yen.
• marketing
– research of market
2. Marketing management. A global business must modify its
marketing plan to suit overseas markets.
• Evaluation involves:
- Measure actual performance.
- Compare against planned performance and goals.
- Take corrective action if performance is unacceptable.
• modifications of strategies according to changes in global market
• A business should constantly scan the business environment and
modify existing strategies in response to market and technological
changes. Example: market saturation and e-commerce.
management responsibility in a global environment
• ethical practice
— tax havens and transfer pricing
1. Tax havens and transfer pricing: