Business Glossary Flashcards
Marketing
is about understanding customers and finding ways to provide products or services which customers demand
Mass market
largest part of a market, with many similar products on offer
Niche market
smaller segment of a market, where customers have specific needs and wants
Branding
the process of creating a unique and identifiable brand which differentiates a product/service or company from its competitors.
Market research
research carried out to identify the needs and wants of customers
Segmentation
Splits up a market into different segments to enable a business to target its products to the relevant customers.
Product differentiation
making the product different from its competitors
Marketing mix
Known as the 4ps. deals with the way in which a business uses price, product, place and promotion to market and sell its product.
Demand
the amount of a product that customers are prepared to buy.
Supply
quantity of a good/service that a producer is able to supply
Equilibrium price
the consumer cost assigned to some product or service such that supply and demand are equal, or close to equal
Subordinates
employee who ranks below another employee within the corporate hierarchy
Chain of command
the route through which messages are passed
Centralisation
when authority rests with senior management at the centre of a business
Organisational chart
shows the internal structure of an organization or company.
Span of control
number of subordinates a line manager is supervising
Hierarchy
arrangement and organization of individuals within a corporation according to power, status, and job function
Debt factoring
external, short-term source of finance for a business by selling their outstanding sales invoices to a third party (a factoring company) at a discount.
Creditor’s
individuals/entities that have lent money to another individual/entity
Contribution
difference between sales and variable costs of production
Capital.
the finance provided to operate over the long-term
Debtors
any entity that owes money to another because they have been provided with a service/good, or borrowed money from an institution.
Internal finance .
finance comes form inside the business
External finance.
source of finance comes from outside the business
Fixed assets (non-current assets) .
assets that the business has purchased and expects to keep in the business for more than one year.
Fixed costs
costs that do not change with output
Overdraft
allows the business to withdraw more money from the bank then in its account
Profit
the financial return or reward
Share capital
money invested in a company by the shareholders, its a long-term source of finance.
Trade credit
A business buys goods or services from a supplier and agrees to pay for them in 30 days
Venture capitalism
a form of investment for early-stage, innovative businesses with strong growth potential
Variable costs
costs that change with output produced
brand
A symbol, logo or design that is recognisable and distinguishes
a product from competitors
competition
The rivalry among sellers trying to achieve goals e.g.
increasing profits, market share, and sales volume
competitive market
When there are many rivals selling similar products
Competitor
A rival business operating in the same market offering similar
goods or services/an appropriate
direct competition
Businesses produce similar products that appeal the same
group of customers
dynamic market
A market that is subject to rapid/continuous change
indirect competition
Different businesses make or sell products that are not in direct competition but compete for the same customer experience e.g. Netflix & local cinema
innovation
The creation, development and implementation of a new
product, process or service
market
Where buyers and sellers interact
market growth
An increase in demand/sales for a particular product/service
market share
The % of the total market a business has in terms of volume or value
market size
The total amount of sales/customers in a market measured by value/volume
mass market
A large unsegmented market where mass appeal products are
on sale
niche market
A specialist area of the market/is a subset of the market on
which a specific product focuses. It is a smaller segment of a
larger market where consumers have specific needs and wants
online retailing
Selling goods and services on the internet
product innovation
The development/creation of products not previously available
sales volume
The quantity of a good or service sold within a period of time.
Calculation Sales revenue/selling price
uncertainty
The inability to predict/a lack of knowledge about future events
and outcomes/reasons for uncertainty. Is caused by unexpected often external factors outside the businesses control, even though sometimes these can be predictable
biased questions
Where the findings do not give a true reflection of the views of
the target audience on the product or service
consumer behaviour
Observes how consumers make decisions about how they
choose and use products or services
databases
An organised collection of data stored electronically with instant
access, searching and sorting facilities
Face-to-face
survey
A research method used where the interviewer communicates
directly with the respondent using a questionnaire
focus group
A group of people who participate in a discussion as part of market research to give feedback about a product or service
government data
Government publications that a business can use such as the
census of the population
interview bias
Where the opinion of the interviewer interferes with the
judgements of the interviewee
market orientation
When a businesses products/services are based around the needs and wants of the customer.
market reports
A document that contains info, stats, research and facts on a chosen field
market research
Gathering, presenting and analysing information about
products/customers
market segmentation
Dividing a whole market into particular customer groups that
have similar characteristics
market segments
An identifiable group of individuals/a part of the market where consumers share one or more characteristic or need
observations
Where market researchers watch the behaviour of customer
primary market research
Obtaining data first hand by the business to match the specific
needs of the business. It can also be known as field research
product orientation
When a business prioritises a products design quality or
performance rather than meeting customer preferences to guide production and marketing decisions
qualitative research
Market research collected relating to the opinions and beliefs of consumers . Data not presented numerically.
quantitative research data
Numerical information gathered and can be presented and
analysed using graphs, charts, table
respondent bias
When respondents respond inaccurately to a question for some reason
sample
A small group of people who must represent a proportion of a total market when carrying out market research
secondary market share
Data collected by another business or organisation but used by the business in question. Also known as desk research
segmentation
Dividing the market into groups of people with similar attributes
or common characteristics
social networking
A platform such as Facebook, X and YouTube to market a
businesses products/services
survey
A method of (primary) research used to collect information
test marketing
Trialling the product in a small area or to a limited number of
users to assess the suitability of a product
trade publications
Specialist magazines that look at current trends in the business
world
added value
The increase in value that a business creates when producing a product/service. The difference between the price the customer pays and the total cost of inputs needed to create a product
competitive advantage
A feature of a business and/or its products that enable it to
compete effectively with rival producers/products.
differentiation
Making products or services different or distinct from competing products/creating a USP
market mapping
A form of market positioning. It is the use of a 2-dimensional
diagram that plots products or services in a market using two
key variables. It is used to spot a gap in the market
market positioning
An effort to influence consumer perception of a brand or product, relative to the perception of competing brands or products
product differentiation
The act of distinguishing a product/service from competitors to make it more attractive to a particular target market
complementary goods
Products consumed/used together, so they are purchased
together
consumer income
The money earned/received from work/investments
demand
The quantity of goods/services that a consumer is willing to buy
at a given price and at a given time
demographics
The structure of the population such as age, gender and
geographical distribution
external shocks
Factors beyond the control of a business
seasonality
When demand rises or falls at particular times of the year
according to seasonal factors
substitutes
Goods that can be bought as an alternative to others, but
perform the same function
government subsidies
A payment given to producers, usually to encourage production
of a certain good
indirect taxes
Taxes imposed by the government on spending e.g. VAT and Excise duties. Responsibility for payment lies with the business.
supply
The amount that producers are willing/able to produce at a given price/over a given period of time
equilibrium price
The price where supply and demand are equal. Also known as market clearing price
non price factors
Factors other than price e.g. Change in consumer incomes,
advertising and seasonality
shortages in markets
Where demand exceeds supply
surplus in markets
Where supply exceeds demand
luxury
Goods that consumers like to buy if they can afford them eg air travel and fashion items
necessity
Basic goods that consumers need to buy eg food, electricity and water
price elastic
Demand is responsive to a change in price
price elasticity of demand
Measures the responsiveness of demand to a change in price. Always negative due to laws of demand.
price inelastic
Demand for the product is less responsive proportionately to a change in price
income elasticity of demand (YED)
Measures the responsiveness of changes in demand to changes in consumer income
Inferior Good
When incomes increase there is a decrease in demand eg
budget goods
marketing mix
A plan for using the right blend of product, price, promotion, and place in order to maximise sales
social trends
Changing patterns in consumer behaviour reflected in changing demands e.g. increased use of social media/being
environmentally friendly
aesthetics
Relates to the appearance of a product
cost (design mix)
When the business focusses on being economically viable,
therefore they aim to minimise costs
design for recycling
Producing products using materials that have been discarded as waste and recycled
design for reuse
When materials used in the initial product are utilised again in the future beyond their initial intended use.
design for waste minimisation
Reducing the quantity of resources that are discarded in the
production process
design mix
The combination of factors needed in designing a product and include Aesthetics, Function, Economic Manufacture
ethical sourcing
When a business buys materials that are produced with fair
working conditions/pay and minimum impact on the environment
function
Relates to the quality and reliability of a product.
rebranding
A marketing strategy in which a new name, term, symbol, design or combination is created for an established brand with the intention of developing a new, differentiated identity in the minds of consumers, investors, and/or competitors.
resource depeltion
the using up of natural resources
advertising
A paid form of communication, used by a business to raise
customer awareness of its products, services and brands, to
persuade purchases to be made
customer loyalty
Repeat purchases with the same business/favour it over
competitors in the same market.
digital communcations
electronic transfer of data
direct marketing
Where a business mail out leaflets or letters to households
emotional branding
The creation of brands that perhaps appeal to customers’
emotional nature, rather than their logical side.
manufacture/corporate branding
Brands created by the producers of goods and services eg
Kellogg’s cornflakes (bear the producers name)
own-brand
Products that are manufactured for wholesalers or retailers by other businesses e.g. Tesco Beans
personal selling
Direct communication between a salesperson and the customer
premium price
Charging a higher price than competitors because of customer loyalty that has been built up over a period of time
product branding/ generic branding
Products that only contain the name of the product category
rather than the company or product name e.g. Carrots
promotion
The way a business creates demand/awareness for their
product/service.
public relations
An organisations attempt to communicate with interested
parties, usually through unpaid media such as press
conferences
sales promotions
Methods of promoting products in the short term to boost sales
social media
Websites and applications that enable users to participate in social networking.
sponsorship
A company giving a product or money to support another
business or person
USP
A feature that differentiates a product from its competitors
viral marketing
Encouraging customers to share information/adverts through existing social media platforms e.g. Facebook
competitive pricing
When a business sets a price similar to competitors selling
similar/rival products
cost-plus pricing
A cost-based method for setting the prices of goods and
services and is calculated by adding a mark-up percentage to
the cost of the product
penetration pricing
Setting a low price initially and accepting limited short-term
profits/losses in order to build market share before switching to a more profitable price
predatory pricing
Setting a low-price forcing rivals out of the market. This is illegal in the UK
price comparison websites
A website that compares the price of a particular product or
service in different stores or from different businesses
price skimming
Setting a high price at the launch of a product, to gain the money back from R&D and to take advantage of those wanting to be the first people to purchase.
pricing strategy
A method used by a business when deciding the price at which a product is sold for
psychological pricing
Tactics that are designed to appeal to a customer’s emotional
response to prices
channels of distribution
Methods used by businesses to get their products from
manufacture to consumer. It can include intermediaries such as wholesalers and retailers.
distribution
Getting products to the right place for customers and at the right time
distribution channels
The methods by which a product gets from the manufacturer to the consumer
distribution strategy
A plan to get a product or service to the customer
four stage distribution channel
Manufacturer/producer to wholesaler to retailer, then consumer. Examples include groceries and confectionery
online distribution/ eccomerce
The use of electronic systems to sell goods and services
place
Where the product can be purchased and is also the process of making a product or service available to the consumer
product
A tangible item offered for sale
service
The non-physical, intangible parts of our economy, as apposed to goods, which we can touch
three stage distribution channel
Manufacturer/producer to retailer, then consumer. Examples
include electrical goods and cars
two stage distribution channel
A direct marketing approach with no intermediary levels e.g.
Manufacturer/producer to consumer
boston matrix
A method used to analyse the product portfolio of a business
that contains stars, Cash cow, question mark and dog
business to business (B2B)
When a business promotes the sale of products/services to
other businesses for use in their operations
business to customer (B2C)
Where a company targets to sell its products to individual
customers
consumer loyalty
A preference for a product or brand based on experience and/or an emotional attachment, which inclines buyers to repeat purchases and away from rivals
extension strategy
A plan that is aimed at preventing the decline stage of a
product/service’s sales in the medium-to-long term
marketing objective
A goal the business aims to achieve through its marketing
activities
marketing strategy
The methods used/plan/way chosen to achieve marketing
objectives
portfolio analysis
When business considers each of its products in the context of its market position
product life cycle
The stages that a product goes through from introduction to
decline
product portfolio
The collection/range/ list of items/products produced/sold/
offered by a business
collective bargaining
Negotiation of wages/conditions of employment between
employee representatives / trade unions and the employer
dismissal
Referred to informally as firing or sacking. It is the termination of employment by an employer against the will of the employee.
employer/ employee relations
The way in which a company’s management and its employees behave towards each other
individual approach (employee relations)
When employers develop relationships with employees at an
individual level
multiskilling
The process of increasing the skills of employees
part-time employees
Workers that generally work a few hours or a few days a week. Fewer hours than a full-time employee.
redundancy
When a business needs to reduce the size of its workforce or
even close. Redundancy can be voluntary
staff as a cost
A cost to businesses in terms of recruitment, training,
remuneration, welfare and even severance
staff as an asset
Employers recognise the input of employees as an important
business resource. They contribute to the value of output,
whether this is through providing added value to a product by supporting the manufacturing process or through effective customer service
temporary work
The job position is generally for a limited period of time
trade unions
A workforce representative that act to protect and improve the economic and working conditions for their members.
external recruitment
When the business looks to fill the vacancy from outside of the business.
induction training
Introductory training given to employees coering its background, policies, health and safety procedures
internal recruitment
Selecting employees who already work within the business to fill job vacancies
off the job training
When employees are given training away from their normal job environment, often in a classroom
on the job training
Learning/gaining/developing skills whilst at work doing the job
recruitment
The process of finding and selecting workers.
training
The developing of a person, to enhance skills and knowledge.
Training can be on-the-job or off-the-job
centralised structure
An organisational structure where business decisions are made at the top of the hierarchy by senior management/or at the headquarters of a business
chain of command
The way authority and power is organised in an organisation
decentralised structure
When a business allows branches to take more control/make
their own decisions
flat organisational structure
One with few layers and a wider span of control for each
manager
hierarchy
The order or levels of responsibility in an organisation, from the lowest to the highest
matrix organisational structure
Organises employees from different disciplines or divisions into projects/teams
organisation structure
A diagram that shows who is answerable to whom in an
organisation. It can also show vertical and horizontal
communication links
span of control
The number of employees/subordinates that a manager is
responsible for
tall organisational structure
One with many layers and a narrow span of control for each
manager
bonus
A sum of money added to an employee’s wages/salary as a
reward for performance when they reach or exceed their targets
commission
A payment to a worker based on a percentage of the value of
sales.
consultation
Employees opinions/feedback are sought when making business decisions
delegation
Authority to pass down from superior to subordinate
empowerment
Giving official authority to employees to make decisions and to control their own work activities
financial incentives
Monetary rewards used to help improve staff motivation and
achievement. They can include Piecework, commission,
bonuses, profit sharing and performance related pay
flexible workforce
Employees have choice over how/when they work by agreement with the company. E.g. zero hours contracts, homeworking, parttime
herzberg’s two factro theory
A theory of motivation that is split into two categories: Motivators and Hygiene factors
job enlargement
Giving an employee more work to do of a similar nature,
horizontally extending their work role
job enrichment
Giving employees greater responsibility and recognition by vertically extending their work role
job rotation
The changing of jobs or tasks
maslow’s hierarchy of needs
The order of people’s needs, starting with basic human needs
mayo’s human relation theory
Emphasises the importance of the ways in which people interact and how they are treated. Motivation can improve when employees feel more involved
motivation
The reason for people’s actions, willingness and goals.
non-financial methods of motivation
Non-monetary rewards
non-financial techniques
Ways of encouraging employees without the use of monetary
rewards e.g Delegation, consultation, empowerment, team
working, flexible working, job enrichment, job rotation and job enlargement
performance-related pay
A financial reward to employees whose work is considered to
have reached a required standard
piece rate
A payment system where employees are paid an agreed rate for every item produced
profit-sharing
A form of financial incentive given to employees, where part of the profit of the business is shared amongst the employees
taylor’s scientific management
Suggested a job could be broken down into constituent parts, so that the most efficient way of working could be calculated. He believes workers are motivated by money
team working
Organising people into working groups that have a common aim
working conditions
The physical surroundings and the atmosphere of the
workplace, and the way staff are treated by managers
autocratic leadership
A leadership style where the decision-making is best kept with managers, who will direct subordinates with little consultation
democratic leadership
A type of leadership style in which members of the group take a participative role in the decision-making process. Group members are encouraged to share ideas and communication is two ways
leadership
Having a vision, sharing that vision with others and providing
direction
Laissez-faire
A leadership style where employees are encouraged to make
their own decisions within certain limits
managment
The day-to-day organisation of the business, including staffing.
paternalistic leaders
Leaders that are in control, but take the welfare of employees into account when making decisions
entrepreneur
Someone who organises a business venture by combining the other factors of production, namely land, labour and capital.They task risks to set up a business in hope of profit/reward
entrepreneurship
The activity of setting up a business, taking on risks, normally in the hope of making a profit
risk
Something an entrepreneur can essentially plan for. Probabilities of outcomes are known or at least understood or considered.
entrepreneural characteristics
Qualities or traits demonstrated by an individual starting up and running a business
entrepreneurial motive
Factors that drive a person to start a business
ethical stance
in support of a moral belief that they believe in
home working
Setting up a business from home
independence
A desire to be their own boss
product satisfaction
Making enough profit to satisfy the needs of the business owner
social entrepreneurship
Setting up a business and showing concern for the local area
business objective
A goal/target set by the business in the short/medium term to help achieve its aim/mission
cost efficiency
Minimising costs/expenses/waste when producing a product or service
customer satisfaction
Is a measurement of how satisfied a customer is with their
purchase
employee welfare
Facilities and benefits provided by a business to meet the wellbeing of the employee
profit maximisation
When the difference between sales revenue and cost is at its
greatest
sales maximisation
An attempt to sell as much as possible in a given time period (or to generate as much sales revenue as possible)
social objectives
A goal to benefit/improve the community
survival
A short-term business objective that aims to keep the business running
franchise
A business is buys the right to trade using the
brand/logo/business model of an existing firm in return for a
fee/royalty
franchising
A type of business where a business operator (franchisor) allows others (franchisee) to trade under its name (for a fee)
lifestyle business
A business set up with the aim of making no more than a set
level of income from which to enjoy a particular lifestyle
partnership
A type of business ownership/organisation owned by two or
more people
private limited company ltd
A small to medium sized business, usually run by the family thatowns it. Shares are sold to friends, family, and business
associates and it has limited liability.
public limited company plc
A business with limited liability whose shares are publicly traded on the stock market
social enterprise
a business that has aim/objectives which benefits society and isnot for profit/its profits are reinvested into the
business/community
sole trader
A business that that is owned by one person who has unlimited liability
stock market floatation
When a business sell shares publicly on the stock exchange for the first time
opportunity cost
The next best alternative forgone when making a decision
trade-off
A situation where having more of one thing leads to having less of something else
leader
A person who inspires and motivates others to meet objectives
salaries
A fixed regular payment to an employee
wages
A payment made to the employee from the employer, usually paid on an hourly or daily basis
