1.4 - Key Vocab

Question 1

London stock exchange

Answer 1

Where shares in public limited companies are sold to members of the general public

Question 2

Sole trader/ proprietor

Answer 2

One person business
-> self employed

Question 3

Partnership

Answer 3

Typically 2-20 people sharing ownership of a business

Question 4

Autonomy

Answer 4

Freedom of choice
-> pro for self employment

Question 5

Sleeping partner

Answer 5

They invest money into a business but doesn’t play an active role in the business

Question 6

Franchise

Answer 6

1 business gives another business to trade using name and product in return for a fee and share of its profits
-> like McDonald’s
-> around 900 in the UK (nearly)

Question 7

Franchiser

Answer 7

The already established business

Question 8

Franchisee

Answer 8

The business that works for the franchisor

Question 9

CPU

Answer 9

Contribution/cost per unit

Question 10

Footloose business

Answer 10

Location doesn’t matter (could be online)

Question 11

Hybrid working

Answer 11

Part time working in office, part time at home, working online

Question 12

Hot-desking

Answer 12

Siting in any desk that’s free

-> perhaps hybrid workers so only come in sometimes

-> pro = people communicate with people from other departments

Question 13

CBD

Answer 13

Central business district
-> Is in the middle of the city
-> high foot fall and more customers

Question 14

Multi channel business

Answer 14

Traditional (in store) but also online

Question 15

Showrooming

Answer 15

Seeing something in the shops and finding the cheaper version online

Question 16

Marketing mix

Answer 16

A business trying to gain the reaction its seeking from its target audience
Also the 4Ps

Question 17

4Ps

Answer 17

Price - £££
Promotion - advertising and marketing
Product - packaging and quality
Place - location and delivery (how it’s distributed as well

Question 18

Re-packaging

Answer 18

Giving a mature product a new image
-> especially important if product has limited target audience

Question 19

Discounting

Answer 19

Designing a new pricing strategy - doesn’t have to be a short-term option for a mature product

Question 20

Rebranding

Answer 20

Changing name, logo as well as product

Question 21

Expanding abroad

Answer 21

Adding new and unique qualities to a product for that country
-> McDonald’s in India - McChicken Tikka

Question 22

Outsource

Answer 22

Get a manufacture somewhere cheaper (Apple -> China)

Question 23

Competitive pricing

Answer 23

Basing price of a product on the prices charged by the competitors

Question 24

Cost plus pricing

Answer 24

Basing the price of a product on the cost of producing it plus an allowance for profit

Question 25

Price skimming

Answer 25

Setting the price of a new product very high while the goods are scarce then lower them later

Question 26

Penetration pricing

Answer 26

Setting prices very low in order to gain a larger share of a market. The price is raised later

Question 27

Mark up pricing

Answer 27

Pricing a product based on the cost of production plus a standard percentage (the market up) for profit

Question 28

Legislation

Answer 28

Protecting rights of consumers/employees through law

Question 29

Overdraft

Answer 29

Ability to take out money from the bank that you don’t have
Interest is charged every day you’re overdrawn