Business Principles: Markets, Innovation, Financials and Marketing

This report provides a comprehensive overview of key business principles. It begins by exploring the characteristics of different business markets, including B2B, industrial, and financial services, and examines the interactions between businesses within a market, such as monopolies, monopolistic competition, and oligopolies. The report then delves into business innovation, defining the concept and exploring various models and sources of support, as well as the process of product or service development. Furthermore, it addresses financial viability, explaining its importance and the consequences of poor financial management, along with key financial terminology. The report also covers budgeting, explaining its uses and management techniques. Finally, it discusses marketing principles, sales processes, market research, and the value of branding, along with the relationship between sales and marketing. The report draws on various academic sources to support its analysis.

PRINCIPLE OF BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P 1.1 Explain the characteristics of different business markets..................................................1
P 1.2 Explain the nature and interactions between businesses within a market.........................1
P 1.3 Explain how can an organisation's goals may be shaped by the market in which it
operates.......................................................................................................................................2
P 1.4 Describe the legal obligations of a business......................................................................2
TASK 2............................................................................................................................................2
P 2.1 Define business innovation................................................................................................2
P 2.3 Explain the uses of models of business innovation...........................................................3
P 2.3 Identify sources of support and guidance for business innovation....................................3
P 2.4 Explain the process of product or service development....................................................3
P 2.5 Explain the benefits, risks and implications associated with innovation ..........................4
TASK 3............................................................................................................................................4
P 3.1 Explain the importance's of financial viability for Morrison.............................................4
P 3.2 Explain the consequences of poor financial management.................................................4
P 3.3 Explain different financial terminology.............................................................................5
TASK 4............................................................................................................................................5
P 4.1 Explain the uses of budget.................................................................................................5
P 4.2 Explain how to manage a budget.......................................................................................5
TASK 5............................................................................................................................................6
P 5.1 Explain the principle of marketing....................................................................................6
P 5.2 Explain a sales process.......................................................................................................6
P 5.3 Explain the feature and uses of market research................................................................6
P 5.4 Explain the value of a brand to an organisation.................................................................6
P 5.5 Explain the relationship between sales and marketing......................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
In this documentation, we will take a look at how an organisation's goals might be shaped
by the market in which the business is currently operating. Furthermore, we will explain the
process of product and guidance for business innovation and the process of product and service
development as well. Moreover, we will take a look at different kinds of financial terminology
and also explain how to manage budget. Apart from this, we will discuses different types of
principle of marketing and explain sales process of the business as well. We will also explain
relationship between sales and marketing.
TASK 1
P 1.1 Explain the characteristics of different business markets Business to business: When you sell to other businesses, you are participating in the
business-to-business market (Dunning, 2012). The B2B marketplace requires a greater
emphasis on customer education and proof of benefit than on desirability, status or other
emotional sales pitches. Industrial: He industrial market consists largely of companies transacting business in
hard goods such as machinery, materials, chemicals, vehicles and office furniture and
supplies.
 Financial services: One area of the commercial services market with its own moniker is
the group of businesses selling financial services. This can include banking, insurance,
commercial credit and lending, tax planning, investments and asset management and
consulting publicly traded companies.
P 1.2 Explain the nature and interactions between businesses within a market Monopolies: have interactions where all of their consumers purchase a specific product
from a specific company. These companies are then able to set the price of these
products. Monopolistic Competition: interacts through having consumers purchasing different
products that are similar to those provided by another company. This means that the
companies will have to compete for the custom. It also means that the demand for the
product will affect the price (Eigen and Schuster, 2012).
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 Oligopolies: Have interactions where consumers are able to buy some items from large
companies. These need to be careful about how their actions affect the surrounding
markets.
P 1.3 Explain how can an organisation's goals may be shaped by the market in which it operates
Setting goals is how you grow your company and achieve success. The process of
creating goals is influenced by many internal and external factors.
 Feasibility: A goal that is too easy to reach can give you a premature sense of
accomplishment, while a goal that is too difficult to attain can cause an unnecessary drain
on resources (Post and Preston, 2012). The feasibility of a goal has a significant effect on
its benefit to your organization. Use historical data, current market trends and an analysis
of your company resources to develop realistic goals that will help you grow your
company without putting yourself out of business.
P 1.4 Describe the legal obligations of a business
Setting up a new business is often viewed as a legal minefield. Business groups are
constantly pressing the government to reduce the burden of ‘red tape’ that afflicts entrepreneurs,
suggesting that many are put off starting their own firms by the numerous legal hurdles that they
must overcome (Trompenaars and Hampden-Turner, 2011). Perhaps the first concern you will
have to address is that of structure. The legal structure you choose can have significant long-term
implications for the running of your business, so it is important that you think your decision
through carefully. Depending on the sector in which you are operating, and the nature of your
business, you may need to apply for a license. This is particularly common in industries where
your actions could result in risk to members of the public, or where you are dealing with
hazardous materials.
TASK 2
P 2.1 Define business innovation
Business innovation is an organization's process for introducing new ideas, workflows,
methodologies, services or products. Innovation is the process of making (something) new or
doing something in new way (Amabile and Kramer, 2011). In business, innovation also has to
include the concept of improvement; to innovate in business is not just to do something
differently, but to do or make something better.
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P 2.3 Explain the uses of models of business innovation Identity: This decision will include choices for mission, vision, core values and brand
identity. It establishes how the business wants to be known to its customers. Core resources: This will include choices for core competencies, processes and strategic
partners that allow realization of the opportunity value proposition (Cragg, Brenkert and
Beau-champ, 2012). Target customers: Decisions are made for focusing offers to specific customers or
segments that will best respond to the offers from the business. Channel strategy: Decisions are made for focusing offers to specific customers or
segments that will best respond to the offers from the business.
 Supply chain strategy: Choices are made for how the product and services will be
created and delivered to the customers and at what cost.
P 2.3 Identify sources of support and guidance for business innovation Leadership support: Support for technological innovation at the executive and
administrator level helps foster a campus culture where innovation is encouraged, allows
for some level of risk, and strengthens the overall potential for success.
 Training: To sustain ongoing use and stimulate future expansion of technologies,
training is paramount (.Dawkins, 2014). However, over time training tends to become
diluted by the daily activities of the campus community and is further eroded by the
turnover of knowledgeable faculty and staff.
P 2.4 Explain the process of product or service development
Product or service development is the process by which an existing product or service is
improved or modified, or a new product or service is developed, to keep up with trends in the
marketplace and customer preferences and buying behaviours.
New Product Development (NPD) is described as going through eight strategies:
 Idea generation.
 Idea screening.
 Concept development.
 Marketing strategy and development.
 Business analysis.
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 Product development.
 Test Marketing.
 Commercialisation.
P 2.5 Explain the benefits, risks and implications associated with innovation
Innovation is inherently risky as it is a complex process with many stages, usually requiring
investment of time and money before the perceived benefits of the innovation are realised
(Visser, 2011).
The benefits associated with innovation include:
 Profit/Margins increase
 New business opportunities
 New markets
 Competitive advantage etc.
The risk associated with innovation include:
 The product is not accepted by the market.
 Initial high investment and long payback period.
 Etc.
TASK 3
P 3.1 Explain the importances of financial viability for Morrison
 Financial viability is the ability of an organisation to generate or attract sufficient income
to meet its operating expenses and financial obligations and still have sufficient funds for
future growth (Bryman and Bell, 2015).
 An organisation that is not financially viable may be operating at a loss, moray have
difficulty paying its debts, and may not survive an unexpected event that reduced its
income
P 3.2 Explain the consequences of poor financial management Legal consequences: When you owe money it is considered as debt. A debtor is a person
who owes money and a creditor is the person who is owed the money. When you are In
debt to someone you have liabilities and obligations to the person you owe money to
(creditor).
 Social consequences: The social consequences related to financial debt can be
overwhelming and in turn cause a number of problems. In society men are considered the
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bread winners of the family which means the main job is to provide an income to support
the family requirements. If they are failing to do so it can cause undesirable pressure
which can cause mental illnesses
P 3.3 Explain different financial terminology Account payable: a record of all short-term (less than 12 months) invoices, bills and
other liabilities yet to be paid (Lawrence and Weber, 2014). Examples of accounts
payable include invoices for goods or services, bills for utilities and tax payments due.
 Account receivable: a record of all short-term (less than 12 months) expected payments,
from customers that have already received the goods/services but are yet to pay. These
types of customers are called debtors and are generally invoiced by a business.
TASK 4
P 4.1 Explain the uses of budget Track Expenses: It is easy to forget where you spent that extra money last month or
realize just how much you are spending on certain expenses. Budgeting allows you to see
these facts in black and white.
 Reach goals: Without a budget, you have no way of really knowing where each penny is
going each month (Berkovitz, 2013). Whether you have your sights set on a new house or
a car, planning ahead for such expenses can help you reach your goals sooner.
P 4.2 Explain how to manage a budget Strategic plan: Every organization, no matter the size should know why it exists and
what it hopes to accomplish. This ensures that organizational resources are used to
support the strategy and development of the organization. It means budgeting toward the
vision.
 Business golas: Annual business goals are the steps an organization takes to implement
its strategic plan and it is these goals that need to be funded by the budget.
TASK 5
P 5.1 Explain the priciple of marketing
The product is the core of any business. If there is no relevant product, good or service,
and no need for it, there is no business. The structure and characteristics of the product are
important in the marketing mix and must be distinct from the competition. The second principle
is promotion. Having the perfect product is of no significance if no one knows your product
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exists. The third principle is price (Chesbrough, 2010). Pricing the product correctly plays a
significant role in the marketing mix. The next principle is place. Where a consumer can actually
get the product is key. If the product or service cannot be conveniently acquired, a consumer may
purchase from the competition.
P 5.2 Explain a sales process
Qualifying is the process of determining whether a potential customer has a need or want
that the company can fulfill, and whether the potential client can afford the product. Involves
preparing for the initial contact with a potential customer. Presentation is actively listening to the
needs and wants of the potential customer and demonstrating how your product can meet those
needs and wants. Objections can be useful because they tell the salesperson what to focus upon
in addressing a prospect's concerns (Myers, 2013). Again, the idea is not to sell at this stage, but
to create a solid relationship for future sales.
P 5.3 Explain the feature and uses of market research Continuous process: Marketing research is not only continuous but also a scientific and
systematic process. It is scientific and systematic because it has well-defined procedures.
It is a process of generating and evaluating data, and then refining it. It is professionally
organized.
 Wide scope: Marketing is a specialized activity. It encompasses several functions. Thus,
marketing research has a wide scope. It includes product research, market research,
consumer research, promotion research, international market research, price research and
distribution research.
P 5.4 Explain the value of a brand to an organisation
In short, branding is the way in which your customer perceives you when they hear or
think of your company name, service or product. This includes everything they think they know
about your brand, including factual information, such as your bright yellow packaging, but also
emotive elements, like for example that it’s luxurious (Scheer, 2012).
P 5.5 Explain the relationship between sales and marketing
Even though many advertising agencies calculate many statistics on the direct
relationship between marketing and sales, it can vary greatly (Porter and Tanner eds., 2012). Just
because you spend more money on an advertising campaign, that does not necessarily mean that
you will make more sales. You might end up spending a lot of money on a marketing campaign
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that does not work. It is important to target only the customers who you have a better chance of
closing the sale with.
CONCLUSION
From the above analysis, it is concluded about different business market characteristics
and nature and interactions between businesses within a market. Moreover, it is also concluded
about some innovation in the business and identify sources of supports and guidance for business
innovation as well. Moreover, we have explained the importance of financial viability for an
organization and also explain the buses of budget within the Morrison business. Ultimately, it is
also explained about various principles of marketing and also explain sales process of the
company effectively.
REFERENCES
Books and Journals
Visser, W., 2011. The age of responsibility: CSR 2.0 and the new DNA of business. John Wiley
& Sons.
Cragg, W., Brenkert, G. G. and Beau-champ, T. L., 2012. Business and human rights: A
principle and value-based analysis. Business and Human Rights, pp.3-46.
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Porter, L. and Tanner, S. eds., 2012. Assessing business excellence. Routledge.
Trompenaars, F. and Hampden-Turner, C., 2011. Riding the waves of culture: Understanding
diversity in global business. Nicholas Brealey Publishing.
Scheer, A. W., 2012. Business process engineering: reference models for industrial enterprises.
Springer Science & Business Media.
Myers, M. D., 2013. Qualitative research in business and management. Sage.
Chesbrough, H., 2010. Business model innovation: opportunities and barriers. Long range
planning. 43. 2-3. pp. 354-363.
Berkovitz, L. D., 2013. Optimal control theory. Vol. 12. Springer Science & Business Media.
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Lawrence, A. T. and Weber, J., 2014. Business and society: Stakeholders, ethics, public policy.
Tata McGraw-Hill Education.
Dawkins, C. E., 2014. The principle of good faith: Toward substantive stakeholder
engagement. Journal of Business Ethics. 121. 2. pp. 283-295.
Amabile, T. and Kramer, S., 2011. The progress principle: Using small wins to ignite joy,
engagement, and creativity at work. Harvard Business Press.
Post, J. and Preston, L. E., 2012. Private management and public policy: The principle of public
responsibility. Stanford University Press.
Eigen, M. and Schuster, P., 2012. The hypercycle: a principle of natural self-organization.
Springer Science & Business Media.
Dunning, J. H., 2012. International Production and the Multinational Enterprise (RLE
International Business. Routledge.
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