The general environment includes Demographic Trends Essay Example

The general environment includes Demographic Trends Paper The populations of aging persons increased with geographic locations like the southern warmer states due to retirement age people migrating south. In socio-cultural, being aware of and working cultural variances of local society can help companies prepare and adapt for the future, and changes in local society can create opportunities for the company. Also beware that this is a threat to a companys growth if not monitored. Just like Education levels, Crime Levels per the population ratio and environmental friendly sections of the region. Economic factors also can influence demand for products and services. This Will dictate if it is a want or need, and the costs of producing and providing them, such as interest, Inflation and so on. The technological also cover creation, innovation and technological forecasting. Creating is an idea with profitable potential. Inventing a new product that can or will be produced and sold and monitoring technological advances in industry trends and being able to adjust and react quickly to the change. For business strategic decision, in political and legal forces, the government can control the economy, encourage new business formation, force restructurings, close or punish companies. There is global trend toward deregulation and prevarication. But for different industries, Industries differ in the degree to which political and legal forces exert influence, like wind power energy, tobacco, etc. The global influence is intricate part as it assists in deciding if a company will face the world market or not. The increasing power of the European market and the purchasing power of the Euro will affect any market worldwide. We will write a custom essay sample on The general environment includes Demographic Trends specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on The general environment includes Demographic Trends specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on The general environment includes Demographic Trends specifically for you FOR ONLY $16.38 $13.9/page Hire Writer All the above are how the environmental factors can and will affects a business strategic decision and the way business is conducted on a daily basis. Explain the differences between value-based pricing and cost-based pricing. Businesses have methods by which to price their products and/or SE;ices. Value-based pricing and cost-based pricing are two common types companies use to promote goods and services. Having the optimal prices is the way to effective marketing as well as to long-term profitability and success. Both of approaches have pros and cons relative to the other. When a company uses cost-based pricing the company sets a price at a percentage above the cost of production of the product or to provide the service. Value-based pricing sakes an approach differently by considering the potential value the product or service will bring to its customers. Value-Based Pricing A value-based pricing company considers the value of its product or service instead of the cost the company ensues to create and produce it. To do this, the company must determine how much money or value the product or service will create for the customer. This value could originate from factors such as increased efficiency, well being or stability. Companies or individuals that produce medications, chemicals, software and artwork often use this pricing strategy. Cost-Based Pricing Cost-based pricing uses manufacturing or production costs as its basis for pricing. The cost-based pricing company uses its costs of start to finish for finding a price bottom and a price roof. The bottom and the roof are the minimum and maximum prices the product or service; they serve as a price range. If the market conditions are such that the going competitive price is under the bottom price, the company may price at the bottom or attempt to lower its costs to lower the overall price. But ideally, the company should price somewhere in between the bottom and roof. Many companies that reduce in mass quantities use this pricing strategy, such as companies that produce clothing, food products and building materials. Focus Cost-based pricing focuses on the companys situation when determining price. In contrast, value-based pricing focuses on the customers when determining price. A value-based pricing company develops a means by which to calculate the potential value their product or service may bring customers and prices accordingly. Some companies use computer software to determine the value a product or service can offer. Prices When a company uses cost-based pricing, it prices between the price bottom ND the price roof. The market conditions dictate where, between the bottom and the roof, the company sets its pricing. If it uses value-based prices, the company sets its pricing in a range determined by what customers are willing to pay. Generally, the value-based price is higher. Benefits Cost-based pricing generally results in competitive prices. Companies that use this strategy may attract consumers who are looking for inexpensive products and services. The major benefit of a value-based pricing model is the ability to set prices that you know will attract buyers. This generally results from horrors market research. Value-based pricing companies often earn high profits on each item sold, but some consumers may not be willing to pay the high price and purchase from a competitor. Ways that the Elevation Burger Franchise could help and even entities franchisees during a recession: 1. Defer royalties. Thats defer, not forgive. Get a lien to secure the royalties that will be owed once the economy rebounds. 2. Focus on your core business. What attracts new customers and keeps existing customers? Do more of that! Many businesses are simply off track right now. Should you introduce new concepts? Yes, if they make sense now. But if they come at a cost, youve got to ask if the franchisees can afford them. Otherwise, stick with your core business. 3. Get creative with advertising credits. If franchisees are supposed to spend X per month on advertising, encourage them to do more guerrilla marketing. For example, if a franchisee pays an employee to wear a mascot outfit and stand out on the curb and wave in customers, give the franchisee advertising credit, and be liberal. Depending on the industry and circumstances, its almost always a mistake to reduce advertising -? too late for some franchisers. . Renegotiate supply contracts. It wont come as a surprise to your vendors that times are tough and franchisees need some help. Those who think long-term will be willing to rework their numbers now to keep your business when the economy improves. 5. Renegotiate leases. You may not be in a position to step in directly, but you can help franchisees renegotiate with landlords. Many landlords are working with tenants to provide relief; they are not forgiving rents, but they are adding money to the back end of leases. Chances are, your franchisees dont know how to begin that negotiation. Help them! Look at other leases, too. 6. Provide economic coaching. Insist on getting the franchises financial and walk through the numbers with the franchisee. This exercise alone is likely to produce several areas of potential improvement. Show franchisees where to cut and conserve, where to outsource, and how to do more with less for the time being. 7. Work with the banks. Now more than ever your franchisees need you to help them make a good case in front of their bankers. Step up and create presentations that will help wow bankers and other investors. Lenders need to know the franchiser s committed to the business and to the franchisees. 8. Stay calm. If you get emotional, the franchisee will get emotional, too. Even if the franchisee is already emotional, youve got to remain calm and set the example for the franchisee. One of your jobs is to lead. Your job is not to react. In business you will not be able to accommodate everyone but if you can appeal to the masses you will be successful. You must keep in mind that money is a huge stress for everyone no matter the situation so if you can alleviate some of the stress it will benefit all involved. Being a leader in stressful situations is he key to any success being shared with the entire franchise. Not all franchisees will react the same but when they are all still in business many months later they will be happy. The big thing as a franchiser to remember is that you are the boss and you are not in a democracy and if you see for the better on the franchise then make is so. DO not give in to pressure and stand your ground.