BUSINESS UNIT 1 KEY TERMS !!! Flashcards
Percentage Change In Price
New - Old / Old * 100
Market Share
The percentage of a market that a business, product or service has.
Added Value
When a business chooses to enhance the quality of a product by providing extras to improve a customer’s experience.
Above-The-Line Promotion
Placing adverts using the media
Market Size
Measured by volume of sales or value
Marketing
A management process involved in identifying, anticipating and satisfying customer needs and wants profitably.
Advertising
Communication between a business and its customers where images are placed in the media to encourage the purchase of products.
Aesthetics
What the item looks like
Marketing Mix
Factors used by a business to influence consumers to purchase its products.
Marketing Strategy
A set of plans that aim to achieve a specific marketing objective.
Maslow’s Hierarchy of Needs
The order of people’s needs starting with the basic human requirements.
Aims
What a business tries to achieve in the long-term.
Mark-Up
The amount added to the cost of a product before it is placed for sale.
Agent or Broker
A person who buys and sells goods for other businesses.
Mass Market
Products or services that are sold and advertised to everyone in the same way.
Authority
The power or right to give orders in an organisation.
Matrix Structure
A hierarchy design which groups people into projects to serve a function.
Autocratic Leadership
Leader makes all the decisions regarding business operations.
Below-The-Line Promotion
Any promotion that does not involve the use of media.
Bonus
A payment in addition to the basic wage for reaching targets or in recognition for service.
Brand Name
A name, term, design or any other feature that allows customers to identify the goods and services of a business and to differentiate them from those of rivals.
Boston Matrix
A 2x2 Matrix model that analyses a product portfolio according to the growth rate of the market and the relative marketshare of products within the market.
Breaking Bulk
Dividing a large quantity of goods received from a supplier before selling them on in smaller quantities to customers.
Niche Market
A subset of a market that caters to the specific needs and wants of customers.
Normal Good
Products where an increase in consumers’ income = increase in demand
Centralisation
A type of business organisation where major decisions are made at the centre of the organisation and then passed down the chain of command.
Objectives
The goals set by a business to help it achieve its long-term purpose.
Chain of Command
A series of positions of authority within an organization that are ordered from lowest to highest.
Off-the-Job Training
Training that takes place away from the work area
Collective Bargaining
A union representative will speak to the management on behalf of all the workers in a business, usually about working conditions or pay.
Commission
Percentage payment on a sale made to the salesperson.
On-the-Job Training
Training that takes place while doing the job.
Competitive Advantage
An advantage a business has over its competitors, allowing it to generate higher profits.
Opportunity Cost
The cost of the loss of the item not chosen, or the profit from the goods not produced.
Competitive Pricing
To charge a similar amount for goods as competitors.
Complimentary Products
Products that need to be consumed together.
Outsourcing
Giving work to sub-contractors that was originally done in-house.
Partnership
2-20 people who set up a business together as joint owners.
Consumer Panels
Groups of consumers are asked for feedback about products over a period of time.
Consultation
Listening to the view of employees before making key decisions that affect them.
Part-Time Work
Employees that work less than 35 hours a week but still get work benefits.
Cost-Plus Pricing
To set the price of a product or service by considered the cost of manufacture and adding a set percentage to the price.
Paternalistic Leadership
Leader makes decisions but takes employees’ point of view into consideration.
Decentralisation
A type of business organisation where decision making is pushed down the chain of command and away from the centre of the organisation.
CV
A document that lists personal details, qualifications, work experience, referees and other information about the jobseeker.
Penetration Pricing
Setting a low price when launching a new product and raising it after it has established itself in the market.
Price Elasticity of Demand
Percentage Change in Quantity Demanded / Percentage Change in Price
PPP (Performance Related Pay)
A payment system designed for non-manual workers where pay increases are given if performance targets are met.
Delayering
Removing layers of management from the hierarchy of an organisation.
Person Specification
The characteristics the candidate both needs to have and those which are desired, for example skills and qualifications
Delegation
The act of asking a worker to perform a task.
Piece Rate
A payment system where employees are paid an agreed rate for every item produced.
PLC
Shares are floated on the stock market and can be bought by anyone
Demand
Amount customers willing to buy at a given price and time.
Democratic Leadership
Leaders encourage employee participation in decision making.
Predatory Pricing or Destroyer pricing
Setting a low price forcing rivals out of business
Price Elastic Demand
The change in price results in a greater change in demand.
Demographics
The statistical data relating to population.
Differentiation
A business’ attempt to distinguish its products and services, in order for customers to recognise it as superior.
Price Elasticity of Demand Def.
How much demand for a good or service is likely to fluctuate with a change in price.
Design Mix
The range of features that are important when designing a product - Aesthetics, Economics and Function
Price Inelastic Demand
A change in price results in a proportionally smaller change in demand.
Direct Selling
Producers selling their products directly to consumers
Price Skimming
Setting a high price initially and then lowering it later.
Pricing Strategy
The pricing policies or methods used by a business when deciding what to charge for its products.
Distribution channel (place)
Where a product is sold and how many stages it takes to get to a customer.
Primary Research
The gathering of new information which does not already exist.
Dynamic market
A market that is constantly changing to suit customers needs and wants.
E-Commerce
Conducting business transactions online.
Private Equity Company
A business usually owned by private individuals backed by financial institutions.
Economies of Scale
The reductions in average costs enjoyed by a business as output increases.
Product Design
The process of creating a new product or service.
Empowerment
Giving official authority to employees to make decisions and control their own work activities.
Emotional Branding
The practice of using the emotions of a consumer to build a brand
Product Life Cycle
The stages that a product moves through over time.
Product Lines
A group of products that are very similar.
Entrepreneur
A person who sets up a business, taking financial risks in the hope of making a profit
Equilibrium Price
The price where supply and demand are equal.
Product Orientation
A business approach where companies focus on their products.
Ethical Stance
To trade in a way that is respectful of people, animals, or the environment.
Profit Maximisation
The aim of the business is to make as high profits as is possible in the time frame.
Profit Satisficing
The aim of the business is to make just enough profit to satisfy the owners but with other managers objectives.
Extension Strategy
A plan to extend the maturity stage of the life cycle of a product.
Profit Sharing
Where workers are given a share of the profits, usually as part of their pay.
Promotion
An attempt to obtain and retain customers by drawing their attention to a firm or its products.
External Recruitment
Appointing workers from outside of the business.
Flat Structure
This is a hierarchy design which has few layers and short chain of command but a wide span of control.
Psychological Pricing
Setting the price slightly below a round figure.
Flexible Workforce
A workforce that can respond, in quantity and type, to changes in market demand.
Public Relations
An organisation’s attempt to communicate with interested parties.
Qualitative Data
The gathering of non-numerical data e.g. opinions, beliefs, etc.
Quantitative Data
Numerical data, e.g. statistics.
Focus Groups
Where a number of customers are invited to attend a discussion about a product led by market researchers.
Recruitment
Process by which a job vacancy is identified & potential employees are notified
Formal Organisation
The internal structure of a business as shown by an organisational chart.
Recycling
Making use of materials that have been discarded as waste.
Franchise
A business idea which is sold to other owners who run it under a licence and pay royalties, in return they get branding and marketing support.
Franchisee
The person who buys the franchise.
Responsibility
The duty to complete a task.
Franchisor
The person who sells the franchise.
Function
What the item is used for.
Resource Depletion
The overconsumption of natural resources.
Risk
The possibility of financial loss.
Retailer
A business that sells goods to consumers.
Government Subsidy
A grant or gift of money from the government to encourage supply of certain goods.
Hierarchy
A system in an organisation where people are ranked according to the authority that they have.
Sales maximisation
An attempt to sell as much as possible in a given time period.
Sales promotion
Methods of promoting products in the short term to boost sales.
Sample
A small group of people who must represent a proportion of a total market when carrying out market research.
Hygiene Factors (Hertzberg)
Factors that do not motivate employees, but if they are not fulfilled may result in dissatisfaction.
Income elastic demand
The percentage change in demand for a product is proportionately greater than the percentage change in income.
Income elasticity of demand
How much demand changes when the consumer has a change in income.
Secondary market research
Information which already exists.
Income inelastic demand
Where the percentage change in demand is proportionately less than the percentage change in income.
Induction Training
Training given to new employees when they first start their new job.
Social Entrepreneurship
To trade with the goal of helping the community in some way.
Socio Economic Groups
Division of people according to social class.
Inferior good
Products where an increase in consumers income means a decrease in demand
Sole trader
Person who sets up business on their own - unlimited liability.
Innovation
The process of creating new ideas, inventions, methods, etc.
Intermediaries
Links between the producer and the consumer.
Span of control
This is the number of subordinates that a supervisor or manager is in charge of.
Sponsorship
Making a financial contribution to an event in return for publicity.
Internal Recruitment
Appointing workers from inside the business.
Intrapreneur
An employee who possesses entrepreneurial skills - does not risk financial loss in the same way as a leader.
Strong brand
A brand that is recognised by everyone.
Subordinates
People in the hierarchy who work under the control of a senior worker.
Stock market
A market for second hand shares.
Job Description
Identifies tasks and responsibilities involved in the job.
Stock market flotation
The process of a company ‘going public’ – making shares available to the public for the first time.
Job enlargement
Giving an employee work of a similar responsibility to do.
Job enrichment
Method used to motivate employees by giving them increased responsibility and variety in their jobs
Substitute products
A product or service that can easily be replaced with another by customers.
Job rotation
Moving an employee from one department to the next - multiskilling.
Laissez-faire Leadership
Leaders allow employees to make their own decisions.
Supply
The amount of a specific good or service that is avaliable in the market.
Leader
Same as management plus is a visionary who motivates their workers, a strategist and a problem solver
Tall Structure
This is a hierarchy design which has a long chain of command but a short span of control.
Team working
Employees in small groups with a similar aim
Lifestyle Business
A business that aims to make enough money and provide the flexibility needed to support a particular lifestyle for the owner.
Trade Union
Organisations of workers that exist to promote the interests of their members.
Uncertainty
Something in the future which is not known.
Limited Liability
A legal status which means that a business owner is only liable for the original amount of money invested in the business.
Limited Company
A business organisation that has a separate legal entity from that of its owners.
Temporary Staff
Employees hired at a company for a limited time period.
Limited Partnership
A partnership where some members contribute capital and enjoy a share of the profits, but do not participate in the running of the business.
Management
Authority to make decisions in the best interest of the business
Training
A process that involves increasing the knowledge and skills of a worker to enable them to do their job effectively.
Market
A set of arrangements that allows buyers and sellers to communicate and trade in a particular range of goods and services.
Unlimited Liability
A legal status which means that the owner of a business is personally liable for all business debts
USP
The aspect or feature of a product that clearly distinguishes it from its rivals.
Market Orientation
Businesses who sell products according to the needs and wants of customers
Market Positioning
The view consumers have about the quality, value for money and image of a product in relation to those of competitors.
Waste minimisation
Business way of making sure that there is no waste in the production process.
Market Research
The collection, presentation and analysis of information relating to the marketing and consumption of good and services.
Market segmentation
A whole market can be divided into sections called segments.
Wholesaler
A business that sells goods to retailers.
Zero Hours Contracts
Employees are called into work only when they are needed, they get no work benefits and cannot be guaranteed work.
