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Business > Business theme 1 > Flashcards

Business theme 1 Flashcards

1
Q

Different ways a market can grow

A

Economic growth
Demographic changes
Social changes

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2
Q

How can a business adapt to changing markets?

A

Market research
Investment
Developing a niche

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3
Q

How can a business create brand recognition?

A

Differentiating products
Customer loyalty
Charge premium prices

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4
Q

Difference between mass and niche market

A

Mass market- a very large market in which products with mass appeal are targeted
Niche market- a smaller market, usually within a larger market

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5
Q

Key advantages of selling in a mass market

A

Higher sales and higher profits

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6
Q

Disadvantages of selling in a niche market

A

May attract competition

Vulnerable because they are not spreading risk

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7
Q

How is market share calculated?

A

sales of a business/total sales in market x100

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8
Q

Advantages of giving products brand names

A

Creates customer loyalty
Charge premium prices
Differentiation

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9
Q

Advantages to customer of online retailing

A

Greater flexibility

More choice

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10
Q

What is a dynamic market?

A

A market that is likely to change overtime

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11
Q

How might the nature of a market change overtime?

A

Size

Nature

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12
Q

How can market research reduce risk for a business?

A

Confidence the launch of a new product will be a success

Respond more quickly to changes in the market

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13
Q

Benefits a market orientated business might enjoy

A

Stronger position to meet the challenge of competition

More able to anticipate market changes

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14
Q

Advantages of primary research

A

Quantify likely demand for a product
Provides an insight into consumer behaviour
Identify and anticipate customer needs and wants

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15
Q

Sources of data for secondary research

A

Information from competitiors
Data from customer services
Sales figures

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16
Q

Benefits of market segmentation

A

Produces different products for different market segments which can increase revenue
Creates customer loyalty

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17
Q

Ways a business might position its products

A

Benefits offered by a product
USP
Attributions of the product

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18
Q

Benefits of using market mapping

A

Helps to understand how customers see the brand in relation to competitors
Can reveal the price customers are willing to pay

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19
Q

Ways a business might try to gain a competitive advantage

A

Product quality / design
Customer service
Economies of scale

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20
Q

Ways a business could differentiate their products

A

Flexible pricing

Recognition

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21
Q

What is the definition for added value? How might a business add value to its product

A

Where a business provides extra features for the customer that go beyond their standard expectations
Customisation
Packaging
Customer service

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22
Q

List the factors of demand

A 
Prices of substitutes / complements
Changes in tastes
Fashion and trends
Advertising and branding
Demographics
External shocks
Seasonality
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23
Q

Examples of external shocks affecting demand

A

Competition

Social Factors

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24
Q

List the factors leading to a change in supply

A 
Changes in cost of production
Introduction to new technology
Indirect taxes
Government subsidies
External shocks
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25
Q

List external shocks affecting supply

A

Weather
Government
Price of related goods

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26
Q

What is the formula for PED?

A

% change in QD / % change in P

27
Q

List the factors influencing PED

A

Competition
Branding
Proportion of income spent on product

28
Q

What are the interpretations for PED values?

A

Less than 1 = inelastic

More than 1 = elastic

29
Q

What is the formula for YED?

A

% change in QD / % change in Y

30
Q

What is a normal good?

A

increase in income leads to an increase in demand

31
Q

What is an inferior good?

A

Increase in income leads to a decrease in demand

32
Q

List the factors of YED

A

Necessities
Luxuries
Price relative to income

33
Q

What are the factors in the design mix?

A

Aesthetics
Cost
Function

34
Q

state the benefits of adapting product designs to changes in social trends

A

Products will sell more

Can be used as a USP

35
Q

Examples pf advertising media

A

TV
Radio
Internet
Newspapers

36
Q

State examples of below-the-line media

A

loyalty cards

BOGOF offers

37
Q

Benefits of strong branding

A

added value
ability to charge premium prices
reduced PED

38
Q

what is cost-plus pricing

A

adding a standard markup to the cost of the product

39
Q

implication of cost plus pricing

A

ignores market conditions

40
Q

name an implication of price skimming

A

maximises revenue

41
Q

name an implication of penetration pricing

A

grow sales quickly

pressure on rivals

42
Q

factors determining the most appropriate pricing strategy

A

differentiation
PED
competition

43
Q

Types of direct selling

A

Internet
door-to-door selling
direct mail

44
Q

Types of extension strategies

A

Product adjustments: updating, add value

45
Q

stages in the product life cycle

A

development: high costs
Introduction: low sales, investment on promotion
Growth: high sales
Maturity: sales level off, extension strategies used
Decline

46
Q

explain the boston matrix

A

high market growth, high market share Stars
high market growth, low market share: ???
low market growth, high market share: £ cow
low market growth, low market share: dogs

47
Q

Types of marketing strategies

A

Product
Place
Price
Promotion

48
Q

Implications of a flexible workforce

A

+Allows a business to expand and contract quickly in response to demand
+Cheaper than employing full time staff
-Less loyalty
-poor quality of work

49
Q

Implications of internal recruitment

A

Cheaper
worker is familiar with procedures
Can motivate workers

50
Q

Implications of external recruitment

A

Brings in someone with new and different ideas

might attract larger number of applicants

51
Q

Implications of on-the-job training

A

+output is being produced
+cheaper
-output may be lost with mistakes
-may be stressful

52
Q

Implications of off-the job training

A

+output not affected
+training can take place outside work hours
-No output
-expensive

53
Q

Advantages of centralisation and decentralisation

A

senior management has control of business
communication may improve with less decision-markets

motivates workers
reduces stress on management

54
Q

Types of organisational structures

A

Tall: long chain of command, narrow span of control
Flat: long span of control, short chain of command
matrix: getting different people together from different areas in the business to form a project

55
Q

Summarise the motivation theorists

A 
Taylor- financial motivates workers
Mayo- personal satisfaction of workers
maslow- physiological needs, safety needs, love and belonging, esteem needs, self-actualisation
Herzberg- motivators: job satisfaction
Hygiene: pay or conditions
56
Q

list financial incentives to improve staff performance

A

commission
bonus
piece work

57
Q

list non-financial incentives to improve staff performance

A

job enlargement
job rotation
teamworking

58
Q

summarise the leadership styles

A

Autocratic: manager allocates tasks and insists on obedience
Paternalistic: management make decisions however take into account employee welfare
Democratic: encourages participation in decision making
Laissez-faire: allows others freedom to make decisions

59
Q

Lists the role of an entrepreneur

A

Creating and setting up business
Expanding/developing business
Anticipating risk

60
Q

List characteristics of entrepreneurs

A

commitment
self-confidence
initiative

61
Q

List skills of entrepreneur

A

organising
financial management
negotiating
decision making

62
Q

List business objectives

A

profit maximisation
survival
sales maximisation
social objectives

63
Q

implications of being a sole trader

A

owner keeps all profits
owner can be flexible
owner has all control

owner has unlimited liablilty
owner main struggle to raise finance

64
Q

disadvantages of private limited companies

A

have to publish financial information
profits are shared
cannot raise as much finance as public limited companies

Business (4 decks)

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