Business and Management
Grade 12
Educator: Khurram Sheharyar
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT - 4.1 THE ROLE OF MARKETING
Key Outcomes:






Understand what marketing is and the role of marketing
Recognize the difference between market orientation and product orientation
Assess the main features of markets, such as size, growth and share
Understand the distinction between consumer goods and service markets and industrial markets
Analyze the marketing of non-profit-making organizations
Describe the elements of a marketing plan
----------------------------------------------------------------------------------------------------------------------------------------------------------Marketing: The management task that links the
computers are still rising in India and China as most
business to the customer by identifying and meeting
potential consumers have yet to purchase one, but
the needs of customers profitably – it does this by
falling everywhere else.
promoting the right product at the right price at the
Market share: The percentage of sales in the total
right
place
to
the
right
customers.
market sold by one business.
Market size: The total level of sales of all producers
within a market.
This can be measured in two ways: volume of sales
(units sold) or value of goods sold (revenue).
The size of a market is important for three reasons:
1. A marketing manager can assess whether a market
is worth entering or not.
Types of Markets
Consumer markets: Markets for goods and services
bought by the final user of them.
Industrial markets: Markets for goods and services
bought by businesses to be used in the production
process of other products.
2. Firms can calculate their own market share.
3. Growth or decline of the market can be identified.
Market growth: The percentage change in the total
size of a market (volume or value) over a period of
time.
Some markets are obviously growing faster than
others; some, such as non-HD TVs, are declining
rapidly. Is it always better to be operating in a rapidly
growing market?
In many cases, yes, but not always – there might be
many competitors entering the market at the same time
so profits might not be high. The pace of growth will
depend on several factors including economic growth,
changes in consumer incomes, development of new
markets, changes in consumer tastes and technological
change, which can boost market sales through
innovative products.
The rate of growth will also depend on whether the
market is ‘saturated’ or not. In most western countries,
the sales of washing machines are not rising each year
as most households already have one – most purchases
are, therefore, replacement models. Sales of laptop
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Vocabulary
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Questions & Answers
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Projects & Research Work:
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT - 4.2 MARKETING PLANNING
Key Outcomes:


Apply the elements of the marketing mix to given situations
Discuss the effectiveness of a marketing mix in achieving marketing objectives and evaluate marketing
strategies
 Discuss the ethics of marketing
 Explain the value of a marketing audit
----------------------------------------------------------------------------------------------------------------------------------------------------------The Market Plan
 The right price is important too. If set too low,
then consumers may lose confidence in the
 A market plan is often a formal written document
product’s quality; if too high, then many will be
which outlines in detail how the business unit
unable to afford it.
intends to achieve the marketing objectives
derived from the corporate objectives.
 Promotion must be effective – telling consumers
 Effective market planning is nearly always based
about the product’s availability and convincing
on clear awareness of market trends, competitors’
actions and consumer wants so market research is
them that ‘your brand’ is the one to choose.
vital.
Packaging is often used to reinforce this image.
 The plan will then contain detailed action
programs, budgets, sales forecasts and strategies –
 Place refers to how the product is distributed to
and these strategies will be based on adaptations of
the consumer. If it is not available at the right time
the firm’s marketing mix.
in the right place, then even the best product in the
world will not be bought in the quantities
Marketing Planning
expected.
Marketing planning is the process of formulating
appropriate strategies and preparing marketing
 Selling services successfully requires people who
activities to meet marketing objectives.
can interact positively with customers and create
the correct impression to encourage them to return.
This is particularly relevant in the hotel and
restaurant industry.
Marketing Mix

The marketing mix is the combination of a
number of elements often called the ‘four Ps’.
1.
2.
3.
4.
Product
Price
Promotion
Place

Decisions need to be made about all the four Ps so
that the business can trade.

A marketing strategy is a combination of the four
Ps that can be used together to help the business
achieve its objectives.

Consumers require the right product. This might
be an existing product, an adaptation of an existing
product or a newly developed one.
Educator: Mr. Khurram Shehryar

The processes that a business has in place to
satisfy customers’ wants reliably and consistently
form an important part of marketing services. For
example, banks replacing an out-of-date debit card
without the customer having to ask for one.

Physical evidence means allowing customers to
see for themselves the quality of the service being
provided. This will reduce the element of risk in
buying a service as opposed to a tangible product.
For example, a clean and well-presented reception
area in a hotel would raise appropriate
expectations in the mind of the customer.
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Vocabulary
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Questions & Answers
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Projects & Research Work:
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT - 4.3 PRODUCT, PRICE, PROMOTION, PLACE
Key Outcomes:


Apply the elements of the marketing mix to given situations
Discuss the effectiveness of a marketing mix in achieving marketing objectives and evaluate marketing
strategies
 Discuss the ethics of marketing
----------------------------------------------------------------------------------------------------------------------------------------------------------The Product







The product can be either goods or services.
Large businesses will often have a range of
products and this is one way that businesses can
expand.
Where a business chooses to add different
products to its product range this is known as
diversification. Diversification reduces the risk a
business faces because it does not depend on one
product that may, for example, go out of fashion.
Branding is the unique way in which products are
known. It can be a name, a logo or something as
simple as a set of colors.
Businesses protect their brands by using
trademarks. This is a legal system of registering
the brand name.
Some brands are so successful that their name
becomes the generic name for a group of products.
For instance, a hoover is not always associated
with the Hoover brand.
Some products, such as farm produce, cannot
easily be branded although producers increasingly
try to do so by growing a unique variety of, say,
apples.
Price
There are a large number of factors that a business
takes into account when setting a price for its products.
These include:
 how much the product costs to make
 the results of market research conducted to find
out how
 consumers are likely to react to a price
 what competitors are charging.
In economic theory, price should be the equilibrium
point where the quantity supplied by the business
equals the quantity demanded by the consumer.
However, in real life, businesses do not have
sufficiently accurate information to draw up the supply
or demand curves.
The Promotion
Promotion informs potential consumers about the
product and attempts to persuade them to purchase it.
It is more than advertising, it includes public relations
activities such as customer relations, sponsorship, free
samples and competitions.
There are three key objectives to any promotional
campaign:
1. Inform: The aims is to alert the market to a firm's
products, especially new ones or used to raise
awareness of the business itself
2. Persuade: encourage customers to make a
purchase, to switch from rival brands and to create
brand loyalty
3. Remind: Retain customer awareness and interest
in an established product
Place
In the context of the marketing mix, place means how
the product is sold to the customer, that is, the channel
of distribution from the producer to the customer.
How is the product going to get to the consumer?
Place in the marketing mix is not so much concerned
with a physical location: e.g. where should we put our
retail shop? Who will we use to retail our product?
Place is rather a distribution strategy that determines
how a customer will receive the product. This is a
decision that is linked to marketing objectives and
fully integrated into the marketing mix.
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
Think of PLACE as: "Getting the right product, to the
right customers, at the right price in the right place and
at the right time."
The usual channels of distribution include:
Types of Intermediaries
1. Retailers
Retailers are the sellers of products to the general
public that operate in outlets. The retail store is the
classic example.
2. Distributors
These are independent businesses that act as
intermediaries that specialize in the trade of
products made by certain manufacturers. Amazon,
of amazon.com, with their economies of scale in
vast, automated warehouses, is the world's largest
distributor.
3. Wholesalers






Each channel will expect to make a profit from
handling the goods.
A wholesaler buys products in bulk from the
producer and sells them on in smaller quantities to
retailers. This is known as breaking bulk.
The channels of distribution used depend on the
nature of the product.
Individually designed products are usually sold
direct to the consumer.
Products that are made on a large scale and sold
individually will usually be distributed through a
wholesaler.
Large stores and supermarkets often buy direct
from the producer and miss out the wholesaler.
Wholesalers Are businesses that purchase large
quantities of products from a manufacturer and
then separate or 'break' the bulk purchase
into smaller units for resale to retailers. Firms like
timber yards will purchase timber in bulk off
manufacturers and then on-sell to hardware stores.
4. Agents
Agents or brokers are negotiators who help to sell
the vendor's products. Mortgage and insurance
agent/brokers will negotiate the best deals on
behalf of their clients and take a commission
payment
(and
bonuses
if
they
reach specific targets).
Channels of Distribution:
The chain of intermediaries a product passes through
from
producer
to
the
final
consumer.
The choice of distribution channel is important for
several reasons:
1. Consumers may need access to a firm's
products to allow them to try before they buy,
to make purchasing easy and to allow, if
necessary, for the return of goods.
2. Manufacturers need outlets for their products
that give as wider market coverage as possible,
but with the desired image of the product
appropriately promoted.
3. Retailers are firms that sell goods to the final
consumer. Retailers will demand a mark-up to
cover their costs and make a profit, so, if price
is very important, using few or no
intermediaries would be an advantage
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Vocabulary
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Questions & Answers
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Projects & Research Work :
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT - 4.7 INTERNATIONAL MARKETING
Key Outcomes:




Evaluate the opportunities and threats posed by entry into international markets.
Analyze the political, economic, social, legal and cultural issues of entering international markets
Explain the differences between International Marketing and Global Marketing
Examine the different methods of how organizations can gain entry into international markets
----------------------------------------------------------------------------------------------------------------------------------------------------------Five key methods for entering international markets:
International Marketing:
International marketing is selling products in markets
other than the original domestic market.
1. Exporting
2. International franchising
Why sell products in other countries?
3. Joint ventures
1. Saturated home markets
4. Licensing
2. Potential increase in profits through rapid sales
growth and low costs in emerging markets
5. Direct investment in subsidiaries
3. Spreading risks between different markets
4. Poor trading conditions in the home market
International marketing is different
Some of the differences an organization marketing
products overseas needs to be aware of:
1. Political differences
2. Economic and social differences
3. Legal differences
4. Cultural differences
5. Differences in business practices
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Vocabulary
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Questions & Answers
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Projects & Research Work:
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT - 4.8 E-COMMERCE
Key Outcomes:



Differentiate between business-to-business (B2B) and business-to-consumer (B2C) marketing
Analyze the effect of e-commerce on the marketing mix
Discuss the costs and benefits of e-commerce to firms and consumers
----------------------------------------------------------------------------------------------------------------------------------------------------------E-commerce:
Ecommerce is the buying and selling of goods and
services on the internet
E-Commerce or Internet Marketing
E-commerce or internet marketing can involve several
different marketing functions. Some businesses
employ all of these but others just one or two:





Selling of goods and services directly to final
customers as orders are placed online through the
company website - BUSINESS-TO- ONSUMER
(B2C)
Selling/buying of goods and services to/from other
businesses - BUSINESS-TO-BUSINESS (B2B)
Advertising by using the company's own website
or Facebook page, other websites matching the
target demographics, pay per view and pay per
click advertising (e.g. Google Adwords and
Facebook advertising) and paid search
Sales leads are established by visitors to a site
leaving their details and then the company contacts
them to make a sale
Collecting market research data by getting
visitors to the website to answer questions that can
provide important consumer data
Impact of E-Commerce on the Marketing Mix:
Product


Each consumer can be communicated with
individually and individual product requirements
can be built into the product or service to suit
different needs. Examples include airline tickets
(time, class, seat, luggage, cars, hotels, site-seeing,
etc.) and computers assembled to match the
individual specification of each customer.
Businesses selling over the internet can afford to
stock a much wider range of goods than nearly all
shops could justify.
Place
 The internet has transformed the buying/shopping
experience. Is the day of the high street shop
coming to an end? Eventually, will all products be
bought online?
Educator: Mr. Khurram Shehryar
Price
 Markets are much more competitive as prices
can be compared so rapidly, in both B2C and
B2B markets.
 Price comparison websites and smart phone
apps will even do the search for you.
 Competitive pricing is much more likely to be
used than cost plus which means customers are
now more in control.
Promotion
 Banners, pop-ups, text messages, web pages,
social marketing, QR codes, YouTube
partnerships, paid search, PPC or PPV, viral
marketing - all of these terms were unheard of
15 years ago.
 Promotional opportunities have been greatly
expanded by the internet and other ICT
developments, and at the same time the costs
of reaching huge numbers of potential
customers has fallen dramatically.
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Vocabulary
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Questions & Answers
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Projects & Research Work:
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT - 5.1: OPERATIONS MANAGEMENT (AKA PRODUCTION)
Key Outcomes:
 Understand the purpose of Operations Management
 Identify the procedures of production process.
----------------------------------------------------------------------------------------------------------------------------------------------------------What is Operations Management?
Advantages:
Operations management is concerned with
 Supervising
 designing and
 controlling
1. The products may be small or large and are often
unique. In order to be called job production, each
individual product has to be completed before the
next product is started.
the procedures of the production process.
2. At any one time, there is only one product being
made. New, small firms often use labor-intensive
job production, before they get the chance to
expand and purchase advanced equipment.
It is closely involved in all aspects of the production
process which is why the term operations management
is used interchangeably with that of 'production'.
In addition, operations management is involved in the
redesign of the business operations that have as their
center of focus, the production of goods and/or the
provision of services.
Operations management is concerned with the
responsibility of guaranteeing that business operations
are efficient in that the processes are using as few
resources as needed, and are effective in terms of
meeting customer requirements.
Finally, operations management is concerned with
managing the process that converts inputs (in the
forms of materials, labor, and energy) into outputs (in
the forms of goods and/or services).
Operations management is concerned with concepts
such as:
 Where a business or the production centers
are located?
 How can a business become more innovative?
Production Methods
There are several different ways in which goods and
services can be produced. They are usually classified
into:




job production
batch production
flow production and mass production
mass customization
4. Another advantage of job production is that each
item can be different. This can create high quality
goods or services that can be sold at a high price.
Disadvantages:
1. This production method tends to result in high unit
costs
2. It often takes a long time to complete, and is
usually labor intensive.
3. The labor force also needs to be highly skilled and
this is not always easy to achieve.
Batch production
Batch production makes products in separate groups
and the products in each batch go through the whole
process together. The production process involves a
number of distinct stages and the defining feature of
batch production is that every unit in the batch must go
through an individual production stage before the
batch as a whole moves on to the next stage.
Advantages:
Job Production:
Job production is normally used for the production of
single one-off products.
Educator: Mr. Khurram Shehryar
3. Job production enables specialized products to be
produced and tends to be motivating for workers
because they produce the whole product and take
pride in it.
1. Batch production allows firms to use division of
labor in the production process and it enables
economies of scale if the batch is large enough.
2. It is usually employed in industries where demand
is for batches of identical products (say, raspberry
doughnuts).
Subject: Business Studies
Al Maaref Pvt. School
3. It also allows each individual batch to be
specifically matched to the demand, and the design
and composition of batches can easily be altered
(to say, chocolate doughnuts).
5. The constant output should make the planning of
inputs relatively simple and this can lead to the
minimization of input stocks through the use of
just-in-time (JIT).
4. The advantages of batch production over job
production are that costs per unit may be less as
less labor is used and production can be quicker. It
is more likely that specialized machinery can be
used
6. Quality tends to be consistent and high.
7. It is easy to check the quality of products at
various points throughout the process.
Disadvantages:
Disadvantages:
1. The drawbacks are that batch production tends to
have high levels of work-in-progress stocks at
each stage of the production process.
1. The main disadvantage is the high initial set-up
cost. By definition, capital intensive, high
technology production lines are going to cost a
great deal of money.
2. The work may well be boring and demotivating for
workers.
2. In addition, the work involved tends to be boring,
demotivating and repetitive.
3. If batches are small, then unit costs are likely to
remain high.
Mass Customization
4. There is often a need to clean and adjust
machinery after each batch has passed through.
This is how hot dogs and bubble gum are
produced.
5. Goods may need to be stored so this increases
costs.
The mass customization process combines the latest
technology with multi-skilled labor forces to use
production lines to make a range of varied products.
This allows businesses to move away from a mass
marketing approach with high output of identical
products. Instead, differentiated marketing can be used
which allows for higher added value - an essential
objective of all operations managers.
Flow Production and Mass Production
This method is used when individual products move
from stage to stage of the production process as soon
as they are ready, without having to wait for any other
products.
The mass customization process may involve use of
technology such as computer-aided design (CAD) and
computer-aided manufacturing (CAM).
Advantages:
1. Flow production systems are capable of producing
large quantities of output in a relatively short time
and so it suits industries where demand for a
product is high and consistent.
2. It also suits the production of large numbers of a
standardized item that only requires minimal
alterations. This is often why it is often referred to
as mass production.
3. Flow production usually takes place on a
production line - hence the use of the term
production line.
4. Labor costs tend to be relatively low, because
much of the process is mechanized and there is
little physical handling of products.
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Vocabulary
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Questions & Answers
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Projects & Research Work:
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT - 5.2 COSTS AND REVENUES
Key Outcomes:
 Explain and give examples of the different types of production costs
 Explain the meaning of revenue and comment on sources of revenue for different firms
----------------------------------------------------------------------------------------------------------------------------------------------------------Fixed costs: Remain unchanged no matter what the
Costs and Revenues
level of output, such as rent of premises.
Management decisions can cover a wide range of
issues and they require much information before
Variable costs: Costs that vary with output, such as
effective strategies can be adopted.
purchases of flour at a bakery.
These business decisions include:
Such decisions would not be possible without cost
data.
1. Business costs are a key factor in the 'profit
equation'. Profits or losses cannot be calculated
without accurate cost data. If businesses do not
keep a record of their costs, then they will be
unable to make profitable decisions, such as where
to locate.
2. Cost data are important to departments, such as
marketing. Marketing managers will use cost data
to help inform pricing decisions.
3. Keeping costs records also allows comparisons to
be made with past periods of time. In this way, the
efficiency of a department or a product's
profitability may be measured and assessed over
time.
Semi-variable costs: These include both a fixed and a
variable cost element, such as a salesperson's fixed
basic salary plus a commission that varies with sales
Marginal costs: The extra cost of producing one more
unit of output (additional variable costs), such as the
extra cost of producing loaf of bread number 101 after
having already produced 100 loaves.
Revenues and Profit
Revenue: The income received from the sale of a
product
Total revenue: Total income from the sale of all units
of the product (Revenue = Quantity x Price)
Profit: All costs of operating the business during a
time period have to be subtracted from total revenue to
obtain a profit figure (Profit = Revenue - Costs)
Important points to remember:
4. Past cost data can help to set budgets for the
future. These will act as targets to work towards
for the departments concerned.
5. Cost variances can be calculated by comparing
cost budgets with actual data.
6. Comparing cost data can help a manager make
decisions about which resources to use. For
example, if wage rates are very low, then laborintensive methods of production may be preferred
over capital-intensive ones.

Revenue is not the same as cash in a cash-flow
forecast unless all goods have been sold for cash.

Revenue is recorded in a firm's accounts whether
the cash has been received from the customer (or
debtor) or not.

Revenue is not the same as profit either. All costs
of operating the business during the time period
have to be subtracted from total revenue to obtain
the profit figure.
The different types of costs:
Direct costs: These costs can be clearly identified with
each unit of production and can be allocated to a cost
center.
Indirect costs: Costs that cannot be identified with a
unit of production or allocated accurately to a cost
center - also known as overhead costs.
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Vocabulary
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Questions & Answers
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Projects & Research Work:
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT - 5.3 BREAK-EVEN ANALYSIS
Key Outcomes:
 Use graphical and quantitative methods to calculate the break-even quantity, profit and margin of safety
---------------------------------------------------------------------------------------------------------------------------------------------------------- Breakeven is the level of sales needed for total
costs to equal total revenue.

Breakeven can be worked out by either using a
formula or by drawing a graph.
This graph would then be drawn:
The formula for breakeven is:
Fixed costs
Price per unit – variable cost per unit
=======================================
Case study:
Oldie Pine Ltd makes and sells reproduction pine
farmhouse tables. The cost of the reclaimed pine is £35
per table. Wages are £15 per table. Fixed costs were
£16,250 per year. The tables are sold at £115 each.
Calculate the quantity of tables that must be sold to
break even.
Why calculate break even?

The break-even point is the point where neither a
loss nor a profit is made. Therefore a business can
see at what point a profit will be made and this can
become a target.

The business can see if the break-even point is
possible to attain. It can use the calculation to spot
likely problems such as too high a figure for fixed
costs.

The business can study the effect of changing costs
and revenues.
Solution
Fixed costs £16,250
Variable costs are £35 + £15 = £50
Price per unit is £115
Fixed costs
Price per unit – variable cost per unit
=
£16 250
£115 – £50
= 250 tables per year
=======================================
Break even can be plotted on a graph by first
completing a table
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT - 5.4 QUALITY ASSURANCE
Key Outcomes:
 Explain the concept of quality
 Understand the difference between quality control and quality assurance – total quality management
----------------------------------------------------------------------------------------------------------------------------------------------------------Quality control


Quality control is not about producing the best
possible goods, it is about ensuring that the goods
are produced to a standard that is expected and that
they are fit for the purpose for which they are
intended.

Many businesses do not have quality as their main
objective; low price can be more important and for
some goods such as fashion items, appearance is
more important.
Traditional quality controllers can also check the
raw materials and the goods at the end of each
stage of production. This system is known as
quality assurance.

Faults found, either at the end of the whole
manufacturing process or at the end of a stage in
the process, can be expensive because the whole
batch can be wasted. In some instances, the
products can be re-made so the waste is mainly in
the time used but this is not always the case.

Quality can often be improved by a variety of
methods but the business has to weigh up the costs
of improving the quality against the benefits of
likely increased sales and reputation.

The business needs to consider the legal
requirements. For example, the weight of goods
needs to be as given on the packet.

Also, the manufacture of the goods must not result
in them being dangerous to use, such as having an
electrical fault.

The costs of having poor quality can be
prosecution if legal requirements are not followed,
a bad reputation and falling sales.
Traditional methods of managing quality


Quality control is a traditional method of checking
goods to ensure that the desired quality is
produced. There may be a person whose specific
job is to check finished goods to ensure that they
meet the required standard.
As an example of traditional quality control,
suppose the product is a CD. The quality controller
might have a list of points to check such as:
o
o
o
The CD case must be scratch free
The insert correctly folded and not creased
The CD printed correctly, etc.
One in every 1000 CDs may be played and checked
for sound quality.
Educator: Mr. Khurram Shehryar
Advantages of Quality Assurance

It makes everyone responsible for quality – this
can be a form of job enrichment.

Self-checking and making efforts to improve the
quality increases motivation.

The system can be used to 'trace back' quality
problems to the stage of the production process
where a problem might have been occurring.

It reduces the need for expensive final inspection
and correction or reworking of faulty products.
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Vocabulary
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Questions & Answers
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Projects & Research Work:
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT - 5.5 LOCATION
Key Outcomes:
 Explain the causes and consequences of location and relocation - domestically and internationally
----------------------------------------------------------------------------------------------------------------------------------------------------------Location is one of the most important strategic
decisions senior management will make.
4. The infrastructure is important. This means that
there are suitable communications facilities
available – both transport and postal/delivery
 Deciding on the best location for a new
services. Other businesses that provide support
business - or relocating an existing one - is
should also be available such as those which
often crucial to its success.
perform routine maintenance for machinery. If the
 Location decisions - choosing new sites for
infrastructure is not there costs can rise
expansion or relocation of the business – are
considerably, for example products may need to be
some of the most important decisions made by
flown in at a much higher cost than road transport.
management teams.
 Selecting the best site will have a significant
5. The nature of the product, whether it is bulk
effect on many departments of the business
reducing or bulk increasing will affect whether the
and, ultimately, on the profitability and
production takes place near the raw materials or
chances of success of the whole firm.
near the consumer. Bulk reducing means that a
large amount of raw materials are needed to
Factors affecting the choice of location
produce a small amount of finished goods. Bulkincreasing goods should be made near to
1. Certain geographical features of the UK are
customers, for example car production takes place
important for businesses, for example the presence
near to large centers of population.
of water for cooling in the power industry and the
climate for agriculture. Safety is another
Multinational organizations
consideration so dangerous products are often not
made in very heavily populated areas.
 A multinational business is one that has its
2. The cost of the site is a key factor for many
headquarters in one country but manufactures or
industries. A business will need to find out if the
operates in other countries. Such a business may
type and size of premises is available in their
concentrate part of its operations in one country,
chosen location at a price they can afford to rent or
where perhaps labor costs are low, and use another
buy. The cost to the business will be affected by
country for basic assembly and as a retail base.
the amount of support that local, national or EC
government will provide. Grants may be made to
cover all or part of the cost of premises in some
areas.
3. The availability of people, labor, to work in the
business is important. Are there sufficient skilled
workers available in the area? What are the wages
that are expected by these people? Suitable
training facilities are important too for some
businesses.
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Vocabulary
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Questions & Answers
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School
UNIT:
LESSON:
DATE:
PAGE:
Projects & Research Work:
Educator: Mr. Khurram Shehryar
Subject: Business Studies
Al Maaref Pvt. School