business paper 1 Flashcards
1
Q
market share? formula definiton
A
market share is % of the total sales held by one company.
sales of one company / total sales of the whole market
2
Q
market size?
A
can be given in volume of products sold or value of products.
3
Q
how can we increase market share?
A
innovative technology, customer loyalty, adding features and value to the products.
4
Q
YED? definition and formula
A
YED measures the responsiveness of demand to a change in income.
%changeD / %changeincome
5
Q
define inferior, luxury and normal goods
A
inferior - < 0, YED is negative value, increase in income leads to fall in demand (cheap bread)
normal - >0, YED is positive value, increase in income leads to increase in demand (bershka)
luxury - > 1, increase in income causes bigger % increase in demand (car,phone)
6
Q
dynamic market?
A
one that is subject to rapid or continous changes
7
Q
product innovation?
A
the developmnet or creation of products not previously available in the market.
8
Q
online retailing?
A
sale of goods and services using internet.
9
Q
drawback of dynamic market
A
it requires large amounts of investment in design to keep up with changes in customer needs
10
Q
benefits of online retailing
A
- shop is open 24/7, flexible
- no need for employees
- easy access from all around the world
11
Q
drawbacks of online retailing
A
- issues with sending goods back
- competitive market
- need of IT skills, may be exspensive to keep the website
- competitors are more aware of your business.
12
Q
benefit of dynamic market
A
it could be argued that in dynamic market demand is growing as customers are always looking for the new things.
13
Q
marketing mix?
A
refers to the 4 key elements of marketing strategy (4P), price, product, promotion and place and how business uses them and sell its products
14
Q
design mix?
A
combination of 3 factors needed in designing a product which includes function, economic manufacture and aestetics.
15
Q
define each factor of design mix and their role?
A
- aestetitcs - if the product is appeling to the customers, design/look, smell/taste/feel - high added value, difference from other competitiors
- function - the way product works and its features, quality/safety/reliability - can build good reputation on the product and interest
- economic manufacturer - can the product be produced at a cost that will then offer suitable price for the customers.
16
Q
social trends?
A
changes in the pattern of mass behaviour that impact society and business.
17
Q
mass marketing?
A
refers to a marketing strategy that is focusing on the entire market, it ignores segmentation and attempts to appeal to the whole market with one basic strategy.
18
Q
niche marketing?
A
selling to small section of market with distinct features, products are targeted at a specific portion of a large market and they try to capture small numbers of buyers.
19
Q
benefits of mass marketing
A
- targets a broad audience, potential huge sales
- economies of scale, costs are reduced because of buying in bulk
- less vulnerable to changes in market or customers
20
Q
drawback of mass marketing
A
- lots of competitors
- less ability to charge higher prices
- hard to stand out in competitive market because of the lack of USP
- lack of USP
21
Q
benefits of niche marketing
A
- less competition
- clear focus, they have particular customers that are easier to reach and find, loyal customers
- can often charge higher prices
- increased brand loyalty
22
Q
drawbacks of niche marketing
A
- lack of economies of scale
- vulnerable to market changes
- likely to attract competition if successful
23
Q
PED? definition and formula
A
PED measures the responsiveness of demand to change in price
%changeD/%changeP
24
Q
what is inelastic or elastic PED?
A
1.inelastic - x<1, can change price and only see a small change in demand
2. elastic - x>1, can change price but will se greater change in demand
!always a negative value!
25
revenue?
the total amount of income generated by the sale of goods or services related to companys primary operations
26
market research?
collection and analysis of data and information to inform a business about its market its used to.
27
primary market research?
obtaining data first hand by the business to match the specific needs of the business.
(interview, surveys, focus groups, face to face, telephone...)
28
secondary market research?
gathering already excisting data, which has been collected for another purpose.
(website, internet, newspaper, magazine,tv, radio...)
29
qualitative research? + benefits
market research collected relating to the opinions and beliefs of the consumers
- understanding customer needs
- can higlight issues that need to be improved
30
quantitative research? + benefits
involves gathering data/information that relates to numbers (graphs, statistics, %)
- quicker to analyse
- can help identify trends
31
market segmentation?
it categorises potential customers according to common characteristics such as gender, age, income or lifestyle.
32
benefits market segmentation
1. it allows business to adjust and develop their products to meet the particular needs of target population - customer loyalty
2. helps directing advertising and promotion to specific group of people - markeeting being more effective
3. they can become the preffered choice of the target group of people, higher profits for that type of product
33
drawbacks of market segmentation
1. exensive, if a business tries to serve dofferent groups the cost of production may rise
2. business may lack focus if they segment to too many differnet sectors
3. may be valunerable to changes in trends /demand if they only segment a small section of market
34
types of market segmentation?
location
demographics
lifestyle
income
35
adding value?
differnece between the price charged and the cost of the inputs needed to provide a preoduct or service
- we can add value if we add new feature, new technology
36
benefits of adding value?
1. higher price can be charged therefore higher profit margins
2. customer loyalty
3. protection against competitors offering lower prices because if we add value we have a reason of increasing the price because the product is of better quality and more developted and therefore customers will be more intrested in our product even tho it has higher price
37
drawbacks of adding value?
1. it can be expensove there is a need of high investments for developing the product
2. depends on what consumers may value
38
product differentiation?
a feature of a product that is differenet from its competitors
39
supply?
the amount of a particular good or services that sellers are willing and able to produce at a given price at a given time
- it is determined by price
40
demand?
the amount of a good or service that people are willing and able to buy at a given price at a given time
41
factores that lead to change in demand?
1. chnages is the price of substitues and complementary goods
2. income
3. trends
4. season
4. advertising, marketing
5. demographics
6. external factors
42
factors that lead to change in supply?
1. introduction of new technology
2. external factors
3. cost of production
43
market mapping?
the process of finding the variables which differentiate brands in a a market and then plotting them on a map to identify a gap in the market.
44
benefits of market mapping
1. can show gap in the market
2. allows company to differentiate its product or service (USP)
3. traditional brand can reposition itself
45
drawbacks of market mapping
1. it is time - consuming
2. does not mean entering the gap will be successful
46
risk?
risk is something that can be planned for, probabilities of outcomes are known or at least understood
47
uncertainty?
the inability to predict about future events and outcomes (external factors)
48
sample?
a group of people that has been chosen for investigation
49
sampling?
sampling allows business to gain insight into the wants and needs of the customers in a cost effective manner,
50
random sampling?
sample is selected from a population where each person is chosen entirely by chance
+ quickest method, unbiased
- may not represent target audience
51
stratified sampling?
the population is first segmented into subgroups beofre respondents are rrandomly selected from whithin that subgroup
+ more spesific, and representative to the target audience
- time consuming
52
quota sampling?
the population is first segmented into subgroups before a judgent is made in selecting respondents that are representative of that subgroup
+ most specific, representative of the target audience
-
52
quota sampling?
the population is first segmented into subgroups before a judgent is made in selecting respondents that are representative of that subgroup
+ most specific, representative of the target audience
-n most time consuming / slowest metod
53
distribution?
distribution channels are the stages involved in getting the finished product to the customer
54
four stage? b and d
producer to wholesales to retailer, then consumer - buying in bulk and then selling smaller to retailers (supermarkets)
+ sell in large quantities
- producer needs to sell at lower cost as the wholesaler needs to make profit
55
three stage? b and d
producer to retailer and then to consumer - buying goods and selling them directly to consumer, can add value such as delivery or selling at convenient locations
+ retailers are usually well known
the product reaches more locations
- have to charge competitive price to retailers therefore less profit
56
product portfolio?
the range of products/services that is sold/produced by a business
57
methods of primary research ?
surveys/questionnaires
focus groups/consumer panels
58
focus groups?
A focus group is a market research method that brings together 6-10 people in a room to provide feedback regarding a product, service, concept, or marketing campaign
59
benefit and drawback focus groups
1. feedback, real life reactions
time saving
2. not as in depth as other market research such as interviews
expensive
60
product life cycle?
product life cycle describes the stages a product goes through from when it enters the market of until is finally removed from the market
It consists of stages such as, development, introduction, growth, maturity and decline
61
extension strategies? and some
ways to prolong product life cycle before it starts to decline
1. advertising - trying to gain new audience
2. price rudiction - more attractive
3. adding value - adding new features
4. new packaging- subtle changes, more eye catching packages
62
describe stages of product life cycle?
1. development - researching and developing a product before it is made available for sale in the market, (investors, test products…)
2. introduction - launching the product into the market for the first time
3. growth - when sales are increasing at their fastest rate. Consumers have accepted the product and are begging to truly buy it. Demand and profits are growing in rapid pace
4. Maturity - sales are near their highest but the rate of growth is slowing down (pricing becomes competitive profit margins are thinner)
5. Decline - sales begin to fall, competitors get too high and sales go down bc of latest technology inventions, changes in customers needs and upcoming trends
63
market saturation?
happens when products or services in a particular market are no longer in demand due to multiple offerings by competitors or simply less demand
64
benefits of product life cycle?
1. can help devise promotional strategies - products in growth stage will benefit from advertising and promotion
2. can help make decisions on the establishment products - products in the maturity stage benefit from extension strategies
3. make decisions on those products with low sales in the decline stage - which products should continue selling and which should discontinue to maintain the reputation of the business
65
drawback of product life cycle?
1. simplistic model - it is hard to predict the life of some products
2. does not take into account the competitors actions - some products may move into the decline stage quickly if competitors introduce a superior product
3. need to take account of other research findings on competitors because the success of the product depends on economy, changing trends etc
66
boston matrix?
a method of analyzing a company products in term of their market share and growth potential in terms of cash cow, star, question mark and dog
67
benefits boston matrix
1. helps identify cash cows which the revenue from cash cows can be taken to help the development of a new product to ensure balanced portfolio across its ranges
2. a useful tool to help a firm plan its product mix and ensure that it is constantly reviewing its product portfolio against changes in demand such as consumer concern for the environment.
3. allows firm to see which of its products are growing and which products need to be divested if market share and growth is declining in order to maximise profits
68
drawbacks product life cycle?
1. for firms with many different products it becomes impractical to conduct meaningful analysis using a simple model such as the boston matrix for every product.
2. the boston matrix model has its limitations for some companies because the market changes quickly and the model does not always reflect this as it is only a snapshot of the current position of demand for products
3. the model focuses on market share and market growth but ignores issues such as profitability and brand reputation/customer loyalty
69
stars,cash cows, ?, dogs
stars - valuable to business, likely to be profitable (business nerd to invest to cope with the growing market)
cash cows - likely to be profitable, but little chances of growing sales
? - unlikely to be profitable, but as market is growing they can turn into star
dogs - poor prospects for future sales and profit, can generate little bit of profit but also no profit
70
cost efficiency?
is minimising costs/expenses when producing a product or service
71
branding?
features of a product that distinguish it from competitors
72
price skimming
a pricing strategy that sets new product prices high and subsequently lowers them as competitors enter the market (introduction)
73
cost plus
takes all the know. costs of production and adds a % mark up to calculate the selling price
74
predatory
pricing of goods or services at such a low kevel that other firm cannot compete and are forced to leave the market
75
penetration
is a marketing strategy used by business. to attract customers to a new product or service by offering a lower price during its initial offering
76
competitive
when a products price is set similar to its competitors
77
psycholoical
practise of setling price slightly lower than a whole number, based on the belief that customers do not round up these prices and so will treat them as lower prices than they really are
78
promotion
promotion refers to any type of marketing communications used to inform or persuade consumers to buy or use a particular brand
79
types of branding
1. manufacturer / corporate branding
2. product branding
3. own brand products
80
types of promotions
1. personal selling
direct marketing
advertising
public relations
sponsorship
sales promotions
digital communications
81
flexible workforce
offering different working hours locations of working that improve the work life balance/motivation for employees
82
collective bargaining
refers to the negotiation between employees and workforce representatives, for example trade union
83
individual approaches
individual approaches to employer relationships refer to when a single worker negotiates their working conditions and pay with management
84
recruitment ?
recrutment is the process of finding and selecting new employees. It is the process of finding and hiring the best qualified candidate for a job opening
85
internal recruitment
is the process of filing vacancies within a budiness from its existing workforce
86
hierarchy?
refers to the arrangement and organisation of individuals within a corporation according to power, status and job function
87
chain of command
the way power is organised in business
88
span of control
number of employees that manager is responsible for
89
decentralised organisation
desicions are being oushed down the chain of command
90
organisational structures
1. tall - many layers, narrow span of control<
+ allows employees to be carefully supervised
lines of responsibilities are clear
horizontal communication is often better, could be beneficial if there are different departments
employees have more opportunities for promotion, therefore productivity and motivation may increase
2. flat - few layers, wider span of contorl
+ vertical communication can be more effective in flater as there is shorter chain of command
decision making can be faster
reducing total wage bill, improves profit
91
matrix structure
employees work within teams or projects, as well as within their own functional areas
+ encourages sharing of ideas
improved communication between departments
motivates workers as they are in teams
- decision making can be slower
confusion over who to report
92
taylor (scientific managment)
workers are motivated by pay
managers should give orders and closely control workers
workers are given one repetitive task so they can learn to master it
- autocratic management style - managers take all desicions and simply give orders to those below them
93
mayo (human relations)
believed that workers are not just concered with money but could be better motivated by having their social needs met while at work
- workers should work in teams
managers should have greater involvment in employee working life
they are best motivated by: better communication, working in teams, managers being involved
94
maslow (hierarchy of needs)
focus on psychological needs of workers
5 levels of human needs that employees need to fulfill their work
1. self - actualisation
2. self - respect /status
3. social (feeling wanted, belongig)
4. safety environment
5. psycological (basic needs, food, shelter, salary)
95
herzberg (2 factor theory)
there are certain factors that a business could introduce that would motivate employees to work harder (motivators)
hygiene factors - which are necessities in the work like pay or safety which is not gonna make employees work harder.
- how intresting the job is, how many opportunities are given to you for extra responisibilities, recognition, promotion
96
financial methods to motivate
1. piecework
2. commission
3. bonus
4. profit share
5. performance related pay
97
non - financial methods to motivate
1. delegation
2. consultation (opinion from employees are heard when making a desicion)
3. team working
4. flexible working
5. job enrichment (invlves workers being given a wide range of more challenging tasks surronding a complete unit of work)
6. job enlargment (workers being given more variety of tasks which should make their work more interesting)
98
market positioning
how you differentiate your brand product or service from your competitors in the mind of customers
99
market orientation
the business finds out the needs and wants of the customers and respond to them (customer is the most important factor when providing the product)
100
product orientation
when business priorities a products design quality or performance rather then meeting customers preferences
101
market orientation/positioning benefits
1. thy will chance the brande name, since the are giving constumers precisely what they want, this means demand may come price inelastic and theerefore the can charge premium prices
2. less need to advertise as costumers would feel that their needs are being met, so they can save money and invest it in something else
3. as they meet the customer needs, tdemand may increse and they can hold larger market share
102
market orientation/positioning drawbacks
1. can be expensive to carry out due to amouhnt of market research
2. tends to be more competitions between market orientated products
103
price skimming benefits drawbacks
+ generates revenue quickly, invest a lot of money in develooping the product and thats why prices have to be set up high to recover the costs
- attracting competitors who offer similar products at a lower price
104
penetration b and d
+ brand awarness, less competitors
- poor brand imahe (if price goes up), price expentations
105
predatory b and d
+ driving out the competition
- business may not make enough money, low on profit
106
competitive b and d
+ enabling to maintain or build market share, customers are loyal
- might risk selling at loss
107
psychology b and d
+ more sales, attracts target copmetitions
- only increased sales in short period of time
108
cost plus b and d
+ cost of production is covered
- does not take into account price set by other competitors
109
b and d of flexible workforce
+ allows business to expand and comtact quickly, motivates workers (they are confortable)
- workers may be less loyal and likely to leave, communication problems
110
flexible workforce tipes
1. multi skilling - ability to cary out variety of jobs
2. part time and temporary (few hours, limited period of time)
3. zero hour contract - only pays wages to employees when they need them
4. flexible hours and home working
5. outsourcing (hiring outside of comapny (cleaner))
111
external recruitment
company recruits candidates who ar enot part of organisation
112
b and d external recruit,
+ opens the organisation to a larger pool of aplications
provides opportunity for a fresh outlook
- time taken to fill open psitions
high costs, needed ads, promotion...
113
b and d internal recruit.
+ reduces time to hire
employees are more loyal
cost less
- making a hole in a team, may need to find someone to fill in the new gap
114
training?
the acquisition of knowledge and skills as a result of the teaching of vocational or practical skills-
115
on the job training b and d
training given in the workplace by the employeer
+ improved productivity and motivation
increased job satisfaction
feliing confortable in the working environment, feeling known with it
cpst effective way of training
- unlikely to bring new skills and ideas into the business
116
off the job training b and d
training which takes place away from the workplace
+ speciliesed trainers
opportunity to learn new skills
increased productivity and motivaiton
- completely detached from the workplace
may be non-effective as course may be generic and not job specific to individual organisation
117
induction
provided to new employees at the start of an employment contract
+ the feel ready and confortable
they are less likely to leave
- not job specific
lack of output
118
two stage b and d
direct marketing, producer to consumer (outlets, factories, online, door to door)
+ producer keeps all the revenue , easily available feedback and good relationships with the customers.
- includes more costs, difficult to find customers, (they may need a truck for the deliveries)
119
personal selling
- when product has a lot of features that need to be explained (cars), very expensive as it requiers training and slaary is high
affective way to manage business to customer relationships, sales people are well trained in approaches and techiques of personal selling
120
direct marketing
emails or posts
higly focused target mail based on what customers have bought before
121
public relations
celebrities doing reviews
building a relationship between business and public
costly to pa the celebrities
122
sponsorship
positive association with the celebrity or a sport
123
sales promotions
BOGOF - buy 1 get 1 free
price discounts
coupons
samples/giveaways
special events
124
digital communications
online ads (pop up, paid ones, banners)
mobile communications (text m, in apps)
advergaming (collab with the game to advertise ur product or service)
isocial media
consumer generated content (reviewes, positive responses)
125
brand?
brand is a characteristic name or symbol that distinguistes one product from another supplier
126
rebranding?
a mraketing startegy which a new name or symbol is created for an estamblidhes brand with the itention of developing a new identity in the minds of customer, investor or competitions.
127
leadership?
the diffference between managment and leadership
128
types of leadership styles?
autocratic - When the leader exerts power over employee, they lead without consultation with employees
paternalistic - the boss takes decisions and is in control, but takes the welfare of their staff into account
democratic - are prepared to share decision-making with employees
laissez - faire - leader encourages employees to make their own decisions, the leader adopts a more hands-off approach.
129
entrepreneur?
Entrepreneur e.g. a person who sets up a business/takes risks (1) in the hope of profit/reward (1).
130
roles of entrepreneur?
creating and setting up a business
Running and expanding / developing a business.
131
barriers to entreptenuer?
entrepreneurial capacity – not having the skills
access to finance
lack of training
Lack of know how
Fear of failure
lack of confidence
132
intrapreneurs?
Intrapreneurs are employees who use entrepreneurial skills to find and develop initiatives that will have financial benefits for the company
133
Entrepreneur characteristic
Entrepreneur characteristics e.g. personality traits that somebody will have in order to start and run a successful business
risk
fleixibility
resilience
confidence
creativity
134
Entrepreneur characteristic
Entrepreneur characteristics e.g. personality traits that somebody will have in order to start and run a successful business
risk
fleixibility
resilience
confidence
creativity
135
business objectives?
business objective e.g. a target/ goal set by the business in the short to medium term
136
survival?
May be an objective for new businesses
Or when new competition enters the market
Or during times of economic crisis
137
profit maximasation
Try to focus on costs and keep these as low as possible and increase price as high as possible (before upsetting customers)
