Franchising as a form of business

One way to avoid some of the management headaches associated with starting a business is to invest in a franchise. It allows you to use a larger company’s trade name and sell its products and services in a specific territory

There are three basic types of franchises. In a product franchise, the franchisee pays the franchising company for the right to sell trademarked goods. In a manufacturing franchise the franchisee is licensed by the parent company to produce and distribute its products. In a business-format franchise, the franchisee buys the right to open a business using the franchiser’s name and format for doing business.

Franchising has a lot of advantages as for franchiser as for franchisee. For example, franchiser makes a strong foundation for his company. They can expend their business through franchised outlets without depleting their own capital.

But franchising has some disadvantages. One of the main is a very little independence of franchisee. Franchiser may make important decisions without consulting franchisees.

10) Definition of Marketing. We will define marketing as a social and managerial process by which individuals and groups obtain what they need and want thought creating and exchanging products and value with others. The dictionary defines marketing as examining products and markets so that the right product reaches the right market at the right price and is supported by the right advertising and sales promotion.

Core marketing concepts

Needs,wants,demands,Products,Exchange,Transactions,

Markets.

Major marketing principles. Major marketing principles are understanding of customers, strongly defined market, the ability to motivate it employees to produce high quality and value for its customers.

The concept of Marketing mix and the classification of the elements(4Ps’).

Marketing mix consists of the 4 P’s: product, place, promotion, price (+people). Product is something that customers buy to satisfy a need they feel they had. The images of the product are as important as its specification. Place – product must available to customers through the most cost effective channels of distribution. A customer product must be offered to end users in suitable retail outlets or available on high purchase or by mail order. Promotion – the product is presented to customers through advertising ( TV commercials, radio spots, newspapers), packaging (design, materials), publicity, PR (public relations) and personal selling. Promoting a product involves a Unique selling Promotion: the features and benefits which make it unlike any of the competing product. 4 stages in promoting a product (AIDA):

1. Attract the attention of the potential customers;

2.Arise the interest in the product;

3.Create a desire for its benefits;

4.Encourage customers to take prompt actions.

Price – the product must be priced so that it competes effectively with competitor product at the same market.