Core Knowledge

Core Knowledge

1. Scale of Production

   • One off production
     • One product is fully completed before the next is started
     • Very high skill levels required
     • High labour costs
     • Small scale productions
       • Jewellery
       • Specialist furniture
       • Bespoke clothing
     • Large scale productions
       • Signage
       • Bridges
   • Batch Production
     • A few items to several thousand
     • Components can be processed together in a planned seqence
     • Examples
       • Small batches
         • Batch of aeroplanes
       • Large batches
         • pairs of training shoes
     • A wide range of products can be produced
     • Can stop and increase production run based on demand
     • Less skilled work force
     • Medium investment needed
     • Batch cannot be done 24/7
     • Would use batch production for something that doesn't require mass production
   • High Volume Production/Mass Production
     • Usually operate 24/7
   • Continuous flow
     • Production systems take in the raw material at one end of the factory, and the finished at the other
       • Example: Paper pulp - to sheets of paper
   • In Line Production
     • Systems require the product to be moved from one process to another usually using a conveyor system
     • Examples: televisions, kettles, pens, clothes hangers
     • High volume production
     • Minimal, if any, variation in product
     • Usually a very high capital investment
     • Low skilled workforce - mostly fully automatic
   • Modular/Cell Production Sysems
     • These

2. PRODUCTION TECHNOLOGIES

   • Digital technology in designing the manufacturing processes
     • Computer
     • Graphics tablet
     • Scanner
     • Internet access
     • 2D/3D software

3. MARKETING and other COMMERCIAL PRACTICE

   • Marketing = the identification and anticipation of customers needs and hopefully meeting those needs
   • New product development can involve
     • Investigation leading to idea/concept generation
       • through; research, consumers, employees, case studies, design cosultancies
       • Feasibility analysis
         • It is possible? Will costumers want it? Can it be manufactured to generate profit?
         • Development - modelling and mock up designs
           • Testing - working prototypes made to fully test function and safe usage
             • User trialling - Beta testing product with selected consumers. feedback generated
               • Modification - make necessary adjustments to the product
                 • Launch - possible small scale, gradual 'roll out' or full national launch of product
   • Market Research
     • Primary - Precise data, collected first hand using questionnaires,
       • Secondary - Uses available data from, reference books, government agencies. Provide info such as population trends and regional statistics
         • Can be out of date or incorrect
       • Can be costly
   • Marketing Mix (4P's)
     • PRODUCT
       • Product is examined on 3 levels
         • 1) The CORE product is the benefit of the product
           • 2) The ACTUAL product is the tangible, physical product
             • 3) The AUGMENTED product is the customer service support offered
     • PRICE
       • Price of product depends on:
         • Demand
         • Costs
         • Government taxes
         • Competition
         • Stage in the life cycle - price increases in growth and falls in decline
       • Penetration pricing = price set artificially low to gain market share
         • Price skimming - if the product has competitive edge, a high price can be set
           • Psychological pricing - charging £1.99 instead of £2
             • Predatory pricing - undercutting competitors, creating price wars
     • PROMOTION
       • Aim of promotion is to persuade them to change brand loyalty
         • Methods
           • Short term promotions such as Buy One Get One Free
             • Competitions and coupons
               • Exhibitions and trade fairs
                 • Publicity campaigns
                   • Personal selling/sales representatives
       • AIDA is used with promotion and advertising
         • draw ATTENTION, create INTEREST, generate DESIRE, invite ACTION
     • PLACE
       • Where a customer can purchase a product. It is sometimes known as the DISTRIBUTION CHANNEL
         • FOUR MAIN CHANNELS OF DISTRIBUTION:
           • Manufacturer - Consumer
             • e.g mail order, farm shops
           • Manufacture - retailer - consumer
             • e.g high street stores
           • Manufacturer - wholesaler - consumer
             • e.g furniture
           • Manufacturer - wholesaler - retailer - consumer
             • e.g medium size convenience stores
           • Functions of distribution channels include:
             • Contacting prospective buyers
             • matching the offer to the buyer's needs
             • Negotiating agreement on prices

4. SUSTAINABILITY AND THE ENVIRONMENT

   • Carbon footprints
     • A carbon footprint is made up of two parts the PRIMARY and SECONDARY footprint
       • The PRIMARY footprint: measure our direct emission of C02 from the burning of fossil fuels, including domestic energy consumption and transportation
       • The SECONDARY footprint is a measure of the indirect C0Z emissions from the product we use
       • 6 R'S