business and economics (chapter 1 & 2) Flashcards
What are the internal factors of major buying decisions?
1) Personal
2) Social and cultural
3) Ethical and environmental situations
4) Physiological
What are the external factors of major buying decisions?
1) Price (elastic - unnecessary) & (inelastic - necessary)
2) marketing strategy
3) finance (credit cards, after pay etc.)
What is elastic and inelastic?
Price elastic is when the demand for a product has a large drop off because the price of a product increases. (fresh fruit, vegetables)
Price inelastic is when an increase of the price has little to no impact on the demand for the product. (milk, bread, petrol)
What is marketing strategies?
Marketing strategies are used to raise the customers awareness of a product and to create a positive picture about a product/brand. Could be using social media, newspaper, radio etc.
How is personal relevant to major buying decisions?
Consumers are different in age, gender, occupation and economic circumstances. How much money you have depends on what you can spend.
How does social and cultural influences major buying decisions?
Your purchases are influenced by your friends, family, social media reviews and your values and beliefs.
What is the ethical and environmental considerations?
The manner in which a product is sourced and manufactured can influence the buying decisions of a customer. For example, if some like the environmentally friendly packaging they will lean for that more.
How does physiological impact your major buying decisions?
It is the level of motivation of the consumer. For example, it could depend on your mood (impulse decisions) or an urgent need/ social need.
What is opportunity cost?
When any customers make’s a purchase, they incur an opportunity cost. When you are thinking of purchasing a product, you have many options of what kind of brand, ingredients that product is and start to have options. For example, if you are tight on money, you would choose the cheapest one, if you have no struggle with money, you get any one of that product.
What are is the difference between minor and major buying decisions?
Minor decisions are choices/purchasing you make daily that is nothing too big or life changing. For example, a piece of clothing you found at the shops or take way that you are having for dinner.
Major decisions are choices/purchases that create a big impact on you. It is not something you buy very often; you have to really think about purchasing this. Fo example, a car, a holiday or an electronic.
Efficiency and productivity when purchasing a product.
Efficiency is about purchasing goods without wasting any resources such as time, money and effort.
Productivity is used to measure efficiency.
Increase your output (final product) & decrease your input (resources) without jeopardising the quality of the output.
What is innovation?
Innovation is the process of new things/methods and improving the current/existing work practices, procedures and products. For example, new packaging/design for a product or electric cars to reduce carbon emissions.
What is the just in time inventory?
The just in time inventory is a management system that aims to avoid holding back stock. Supplies arrive just as needed for production and finished products are immediately sold to customers.
Benefits -
No need to pay for storage
No out-of-date stock
No stock loss due to theft
Potential problems -
insufficient stock -> efficient inventory control is necessary
What are the structures that businesses place in the system for employees?
Hieratical organisational structure (high level) -
Employees are put into different levels from what position, roles and responsibilities that look after. The decision making is mainly from the senior level.
Flatter organisational structure (a few levels) -
Small businesses usually use this structure. There are a very few levels of management, all employees are entitled with their own decisions and a lot more experience with how the employees’ work.
Matrix organisational structure (m for marketing and teamwork) -
Used when businesses are undergoing a project or an assignment. There are more communication channels and are different teams working on different functions (marketing, finance). There are a lot more of innovative ideas put into this structure as everyone is working together.
Network organisational structure -
Functions are outside of the company and are flexible + adapt to changes in consumer demand and choices.
What is big data?
Big data is when you use a wide variety of data sources to collect and analyse information. Big data allows for businesses to change their products to fit the needs and wants of customers.
