Small business survive in spite of competition
The prices are also worked out differently, as a market trader buys the products for a set price and makes a mark up to a set price to make a steady profit, in order to pay for a fixed, variable and semi-variable costs, for example, rent of pitch, wages and food and drink. The same applies for the theatre because wages still have to be paid, but any extra profit made is put back into the company, so the prices have to bring a reasonable bit of profit by raising prices.
Break Even The “break Even” point is important to both businesses because it is a figure to let the owner of the business know how many products need to be sold in order for the business to earn back all of its out0going costs, after the break even point is reached, all of the money made by the business is pure profit. This is important for the theatre as the manager will know exactly how many tickets need to be sold to break even, it is a lot easier for the theatre to calculate its break even point as all of the tickets are a set price, whereas the marget traders
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Place Finding the right place to sell your product is probably the most important issue in a business because if your in the wrong place the product will not sell to its full potential which will leave you with less product, the area in which the theatre is located is good as there are no theatres in the Ilford area so they will get at least all of the local business. “The market trader” there is a lot more competition as there are a lot of other places to buy similar products so that he price factor is even more important, so you can under cut the competition to get more customers.
Promotion The promotion elements of these two businesses are very different because the “market trader” has no promotion techniques at all where as the theatre uses its own building to promote all of the coming shows. The theatre and the market trader both believe that the best kind of advertising is your reputation and history, if your customers believe your products are good and that your products are of a good quality then the customer will tell their friends and family and come back for more.
In the theatre, only 2.5% of the income is spent on advertising which is funded by their “supporters club” who buy around 75% of the tickets sold, the which is given from the “supporters club” goes towards the programme and stamp which is on the mailing list of addresses. Nische Marketing is when a small business is providing either a unique product or a unique service, in order to “win” customers over from big businesses and other markets. Income, the income of the customers is important and needs to be considered by both the trader and the theatre because if the customer is not happy with the value of the product or can not afford the product, you will end up loosing a lot of business. In the cases of these two businesses, the product and service are very cheap and therefore the target customers and afford the services and produces , they are also happy with the value.
Financial The market trader gets a lot more profit than the theatre as they a larger mark up and also, it products are brought in a whole sale they are cheaper so even more profit can be made. All of the profits can be used by the trader and his partner in any way see fit (after paying all of the outstanding debts and costs.) the theatre uses all of its profits to put back into the company to pay any need of the theatre and no worker gets extra pay.
Recruitment The market trader will recruit very little staff as the staff are normally friends or family and therefore recruitment is a very small part of a market traders business. On the other hand, in a theatre, recruitment is very important as nearly all of the staff work voluntarily, in return for their work they get to see a show for free, but if there is no staff working voluntary, there will be no-one to give out leaflets etc. Therefore the quality of the service will be lowered and the business maybe threatened with bankruptcy.
Method I will need to gather various bits of information on finance to give a more precise financial situation for both the market trader and the theatre. I will collect research, including leaflets, population statistics, maps, and I will also find out some primary/field research by doing interviews and by also carrying out questionnaires. After doing these tasks I will be able to understand the status of each business.
I am asking these questions to find out the individual views of the public and how they feel about the “Market Traders” and the “theatre!” I also hope to find out patterns of interest, e.g. what age people tend to like more, compared with others. (Different ages). After completing my questionnaires I will carry out two interviews, one with “Mr Vivian Ellacott” the manager of the Kenneth More theatre and another one with a “Market Trader”, from these interviews I intend to find information which gives a personal view from a person of high authority in each business, I will also receive information about both businesses such as, Strategies used to overcome competition, from this I will be able to compare the two businesses easier.