All Keywords Theme 1 and 2 Flashcards
Market Share
Proportion of a market that is held by a business, a product or a number of businesses or products. Expressed as a percentage calculated by sales / total sales x 100
Niche
A smaller segment of a larger market, usually with low output and revenue.
Differentiation
The extent to which consumers percieve a brand from being different to another
Qualitative Data
Non numerical data, often opinions and viewpoints usually gathered through surveys or questionnaires among other things
Marketing Objective
Targets the marketing department must achieve
Marketing Strategy
The medium to long term plan for meeting the marketing objective.
Sample
The selection of people used in a market research exercise.
Consumer Goods
Items bought and used by consumers usually in a mass market e.g bread.
Marketing
Targeting the right product/service to the right target market through the likes of price, promotion and place.
Dynamic Market
Fast moving markets that are constantly changing which can be sensitive to aspects leading to market changes
Economies of Scale
Factors that cause the cost per unit to fall due to an increase in the size of an enterprise
Secondary Research
Finding out information that has already been gathered by another entity e.g using government stats
Quantitative Research
Research using data gathering which allows for numerical analysis.
Mass Marketing
The attempt to appeal to an entire market with one large strategy.
Sample Bias
Where a sample result can be distorted due to the possibility of excluding possible customers
Asset led or Asset Bases
A business which considers both its strengths and weaknesseses aswell as their market needs.
Profit
The amount gained after revenue exceeds the total costs and expenses of a business
Market Size
The total possible customers a business could target.
Primary Research
Finding out information first hand.
Revenue
turnover - income
Demand
A measure of the level of interest consumers have in a product
Supply
Quantity of a product that producers are able to deliver at a point in time
Complementary Goods
Goods usually bought together e.g cereal and milk
Inferior goods
Cheaper alternative, doesn’t always mean a sub-standard product. Demand falls when income increases and vice versa e.g Asda Smartprice
Normal Goods
Goods for which demand increases when income rises
Substitute Goods
Goods that can be bought as an alternative whilst performing the same function
External Shock
Factors beyond a businesses control that can impact them e.g Iceland volcano was a shock to flights
Government Subsidary
A kind of grant from the government made available to certain businesses, often to increase jobs or encourage production of a certain product.
Centeris Paribus
Taking a situation at face value and that nothing will change
Disposable Income
The money consumers have left after all other financial commitments are met
Indirect Tax
Tax levied on goods and services rather than income and profits e.g VAT
Direct Tax
Tax levied on income and profits
Free Market
An economic system in which prices are determined by unrestricted competition between privately owned businesses
Market Equilibrium
Point where price and quantity meet. Suppliers sell for the right price for customers to have enough quantity to satisfy demand
Surplus
Not enough demand in regards to supply
Shortage of Goods
When prices are lower then the equilibrium and supply is low thus demand is high and cannot be fulfilled
Surplus of goods
Prices are higher than the equilibrium and supply is higher meaning demand is lower thus less demand
Added Value
The difference between price sold for and the total cost of making the product or service e.g bread may be made for 25p and sold for £1, Added Value is 75p
Direct Competition
Another company that offers the same product or service to the same market and customer base, with the goal being to increase their market share
Demographics
Population Data e.g Age, Ethnic Origin or Gender
Price
The amount a consumer pays for a good or service
Pricing Strategy
Plan for setting mid to long term pricing of a product or service
Loss Leader
Selling for below costs to gain more profitable business in the future
Price Sensitive
When demand for a product reacts sharply to a price change
Pricing Tactics
Short-term pricing responses to opportunities or threats
Promotional Hook
Promotional Techniques used to gain customers interest
Promotional Reach
Maximising the number of people exposed to media in a given time period
Emotional Branding
Practice of using the emotion of a consumer to build a brand
Generic Brand
Brand which becomes the name of a product e.g Hoover
Merchandising
Methods used at point of sale
Cost Plus Pricing
Cost-based strategy, calculated as the cost to produce plus a % mark up e.g production costs £1, markup is 40% it would be sold for £1.40
Penetration Pricing
Price set low to gain market share
Price Skimming
Initially set at a high price whilst a product has its new appeal to gain development costs back as soon as possible usually used in the tech market
Competitive Pricing
Price set at market level
Psychological Pricing
Using the consumers psychological price barrier e.g 2.99 instead of 3
Predatory Pricing
Setting a low price to force rivals out of business (Illegal but still happens)
Sustainability
An ability of something to be maintained or to sustain itself, taking what we need now
Ethical Sourcing
Using Materials, components and services that come from suppliers who respect the environment and treat their workforce fair e,g Fairtrade
Ergonomicss
Study of how people interact with their environment and the equipment they use
Waste Minimisation
Reducing the quantity of resources discarded in the process of production
Above the Line Promotion
Advertising in the media, often more expensive
Below the Line Promotion
Any form of promotion which doesn’t use media
Viral Marketing
Any strategy that encourages people to pass on a message
Distribution Channel
Route taken by a product from producer to consumer
Distribution
Delivery of goods from the producer to the consumer
Remuneration
Entire package of material rewards received by an employee e.g pay, pension, share options plus infringe benefits such as a company car
Outsourcing
Paying another business or individual to undertake a task which would otherwise be done by an employee
Labour Turnover
Number of staff leaving a company as a percentage of number employed
Subcontracting
Using another business to complete an aspect of operations e.g health and safety
Core Workers
Employees essential to the running of a business usually with high pay, high job security and good conditions
Zero Hour Contracts
Workers on demand with no commitment from the employer. Rate of duties is agreed weekly and may not work at all
Severence
The word for the ending of a contract of employment due to dismissal or redundancy
Redeployment
Moving an employee to a new job function because their department has been closed or they are not good enough for current post
Dismissal
Termination of an employees contract due to gross misconduct
Redundancy
Contract is terminated due to job no longer existing
Trade Union
Organisation representing the interests and goals of working people, member pay to join but receive help if they need it such as legal aid
Collective Bargaining
A group or body that represents employees and negotiates changes on behalf of the workers. Have more bargaining power as they speak for many
Individual Approach
Where an individual discusses issues relating to their terms and conditions of employment with their employer - the employer has the position of strength over an individual
Lean Production
Term used to describe a range of methods of waste saving
Absenteeism
Measure of the rate of deliberate workforce absence as a proportion to all the employees
Centralised Structure
Organisation where decision making made by one or few people
Decentralised Structure
Organisation where decision making is run through everyone down a chain of command
Heirarchy
Traditional business structure with a series of levels that represents authority and responsibility
Chain Of Control
Path of communications and authority up and down the heirarchy
Span Of Control
The number of workers who are answerable directly to a manager
Narrow Span Of Control
Responsibility for fewer workers
Wide Span Of Control
Responsibility for a lot of workers
Organisational Design
Structure of a business commonly organised by either: Area, customer, function, product or process
Matrix Structure
Where staff work in project teams in addition to their responsibilities within their own department.Answerable to more than one boss
Job Enrichment
Adding tasks which have more responsibility to help increase overall skills which may be useful preparation for promotion
Crowdfunding
Finance obtained from many individuals through small investments usually over the internet
Entrepreneur
Someone who makes a business idea happen, either through their own effort or by organising others to do the work
Piece Rate
Paying workers per piece they produce e.g £2 per pair of jeans
Budgets
An agreed maximum on monthly expenses set by a manager
Mission Statment
A short and powerfully expressed sentence or two that clearly outlines the businesses aims clearly and motivationally
Share Holder Value
Mix of shareholder dividends and a rising price that stems from rising profit
Staff Retention
Retaining Staff
Bankrupt
When a person is unable to meet personal liabilities, some or all of which are a consequence of business activites
Creditiors
Those owed money by a business
Debtors
Those who owe a business money
Franchisee
An independent business who has bought the right to use another businesses brand, logo and trading practices in a certain area
Incorporation
Establishing a business as a separate legal entity from its owners and thus giving them limited liability
Limited Liability
Owners are not liable for the debts raised by a business, loss is limited to what they invest
Sole Trader
One person who owns a business and holds unlimited liability
Unlimited Liability
Owners are liable to all of the businesses debts so can have personal possessions taken away to cover the debt if need be
Opportunity Cost
The cost of missing out on the next best alternative when making a decision or committing resources
Trade-Off
Accepting less of something to achieve more of another e.g less quality for lower costs
Liquidity
The ability a business has to pay its debts on time which relies on how much money they have in the bank
Overtrading
When a business expands at a rate that it cannot be sustained due to its capital base
Capital
Wealth in the form of money or assets that signifies the financial strength of an individual, business or nation
Fixed Costs
Costs that stay the same regardless of output
Variable Costs
Costs that change relevant to the level of output
Working Capital
The finance available for the day to day running of a business
Angel Investors
Investors who back a business before it opens its doors, taking a full equity risk
Collateral
An asset used as security for a loan
Public Limited Company (PLC)
Company with limited liability and shares which are available for sale on the stock market
Seedcorn capital
The early stage finance that may come from an angel investor
Share Capital
Business Finance that has no guarantee of repayment or of an annual income, but gains a share of the business and its profits
Stock Market
The market for buying and selling company shares supervising the issuing of shares by a business and providing a market place for the buying and selling of second hand shares
Venture Capital
High risk capital invested in a combination of loans and shares, usually in a small and dynamic business
Best Case
An optimistic estimate of the best possible outcome of a business
Business Plan
A document setting out a businesses idea, showing how it will be financed, marketed and put into practice
Cashflow Forecast
A predictive business management tool which estimates the amount of money flowing in and out of a business allowing you to predict net cash flow
Just-In-Time
Ordering stock so that it comes just before it runs out
Overdraft
An authorised short term loan from a bank used for daily cash defecits
Defecit
Negative balance in the cash flow forecast
Surplus
Positive balance in the cash flow forecast
Worst Case
A pessimistic estimate assuming the worst possible outcome for a business
Retained Profit
Profit after tax which is invested back into the business
Debenture
Long term business to business loan
Lease
Essentially hiring equipment from other external businesses
Secured Loan
A loan where the lender requires security e.g collateral
Unsecured Loan
Where the lender has no protection if the borrower fails to repay its money
Capital Gain
Profit made from selling a share for more than you bought it for
Undercapitalised
A firm not raising enough capital when the business starts up
Cashflow Forecast
A predictive business management tool which estimates monthly cash inflows and outflows to be able to manage net cashflow
Opening Balance
The balance at the start of each month which is the closing balance of the previous months
Net Cashflow Balance
The difference between cash flowing in and out
Closing Balance
The amount in the bank at the end of the month
Adverse Variance
Difference between budgeted and actual figures that I worse for the business
Favourable Variance
Difference between budgeted and actual figures where it is good for the business
Income Budget
Setting a minimum figure for the revenue to be generated by a product, department or manager
Zero Budgeting
Setting all future budgets at zero and having all expenses asked for and justified by those who need it
Margin of Safety
Amount you which current output exceeds the breakeven output
Contribution
Selling Price - Variable Costs per unit
Breakeven
Predictive calculation used to calculate the amount a business must sell to cover its costs
Breakeven Formula
Selling price - VC per unit = Contribution
Fixed costs / Contribution = Breakeven Quantity
Total Contribution Formula
Contribution x Breakeven Quantity
Total Revenue at Breakeven Formula
Selling price per item x Breakeven Quantity
Sales Forecast
Method of predicting future sales based on past statistics
Time Series Data
Method that allows a business to predict future levels based on past output
Extrapolation
Forecasting future trends based on past data
Real Incomes
Changes in household incomes after allowing for changes in price I.e percentage change in household income - inflation = real income
Contingency Plans
Plans held in reserve in case things go wrong e.g sales predicted at 30% lower in worst case
Sales Volume
Number of units sold in a given time period
Capacity Utilisation
The use a business makes of its resources
Rationalisation
Reducing resources usually due to excess capacity
Batch Production
Products passed through each production stage in batches
Flow Production
A continuous production where standardised products are assembled in stages
Job Production
One off production, usually unique products and services
Lean Production
An approach to operations that focuses on a reduction of resources
Cell Production
Involves producing a family of products in a small self contained unit of a factory
Capital Intensive
More machinery used relative to Labour
Labour Intensive
More labour used relative to machinery
Division of Labour
Specialisation in specific tasks or skills by an individuals
Production
A measure of quantity output
Productivity
Measure of efficiency measured by dividing output by inputs per time period e.g a factory worker may make 10 computer chips every hour
Efficiency
Producing a level of output where average costs are minimised
Kaizen
Japanese term meaning continuous improvement
Buffer Stock
Stock held as a precaution to cope with unforeseen demand
TQM
Constant Company Wide culture of total quality management
Lead Time
Time between placing an order and delivery
Re-order Level
The level of current stock when a new order is placed
Re-order Quantity
Amount of stock ordered when an order is placed
Stock Rotation
Flow of stock into and out of a business
Work-In-Progress
Partly Finished Goods
Quality
Features of a product that allow it to satisfy customers needs
Quality Assurance
A method of working for businesses that takes into account customers wants when standardising quality
Quality Circles
Groups of workers meeting regularly to solve problems and discuss work issues
Quality Chains
When employees form a link between customers and suppliers internally and externally
Appreciation In A Currency
Rise in value of a currency
Base Rate
Rate of interest the bank structures other interests off
Gross Domestic Product (GDP)
Common measure of national income, output or employment
Boom
The peak in an economic cycle, GDP is growing at its fastest
Consumer Price Index (CPI)
Common measure of price changes used in the EU
Deflation
A fall in the general price level
Depreciation
Fall in the value of a currency
Downturn
The GDP is growing but more slowly than before
Fiscal Policy
Using changes in Taxation and government expenditure to manage the economy
Inflation
General rise in prices
Monetary Policy
Using changes in interest and money supply to manage the economy
Recession
Less severe form of depression when GDP has decrease for more than 2 quarters
Index linked
Linking of certain payments, such as benefits to the rate of inflation
Slump or Depression
The bottom of the economic cycle where the GDP starts to fall with a significant increase in unemployment
Taxation
Charges made by governments on the activities, earnings and incomes of individuals
Anti-Competitive or Restrictive Practices
Attempt by firms to prevent or restrict competition
Barriers of Entry
Obstacles that make it hard for a business to enter the market
Collusion
Two or more businesses working together to do restrictive practices such as price fixing
Contract Of Employment
Written agreement between an employer and employee with each having obligations
Employment Tribunal
Court that deals with cases involving disputes between employers and employees
Cartel
Group of businesses or countries which join together to agree on pricing and output in a market in attempt to gain higher profit at the consumers expense
Market Structures
Characteristics of a market e.g size of barriers of entry, number of businesses,what they produce and the behaviour of them within the market
Monopoly
Absence of competition where a single group or company has vast market share
Unfair Dismissal
Illegal dismissal of a worker by a business
