Business Vocabulary Flashcards
Marketing
The management task that links the business to the customer by identifying and meeting the needs of customer profitability.
It does this by getting the right product at the right price to the right place at the right time.
Marketing objectives
The goals set for the marketing department to help the business achieve its overall objectives
Marketing strategy
Long-term plan established;listed for achieving marketing objectives.
Market orientation
An outward looking approach basing product decisions on customer demand , as established by market research
Product orientation
An inward looking approach that focuses on making products and then trying to sell them
Asset led marketing
an approach to marketing that bases strategy on the firm’s existing strengths and assets instead of purely on what the customer wants
Societal marketing
This approach not only considers the demands of customers but also the effects on all members of the public (society) involved in some way when forms meet these demands
Demand
The quantity of a product that consumers are willing and able to buy at a given price in a time period
Supply
A quantity of product that firms are prepared to supply at a given price in a time period
Equilibrium price
The market price that equates supply and demand for a product
Market size
The total level of sales of all producers within a market
Market share
The percentage of sales in the total market sold by one business.
Market growth
The percentage change in the total size of a market ((volume or value) over a period of time
Direct competitor
Business that provide the same or very similar goods or services
USP
Unique selling point
The special feature of a product that differentiates it from competitors’ products
Product differentiation
Making a product distinctive so that it stands out from competitors’ products in consumers’ perception
Niche marketing
Identifying and exploiting a small segment of a larger market by developing product to suit it
Mass marketing
Selling the same products to the whole market with no attempt to target groups within it
Market segment
A sub-group of a while market in which consumers have similar characteristics
Market segmentation
Identifying different segments within a market and targeting different products or services to them
Consumer profile
A quantified picture of consumers of a firm’s products, showing proportions of age groups, income levels, location, gender or social class
Market research
This is the process of collecting, recording and analysing data about customers, competitors and the market
Primary research
The collection of first hand data that is directly related to a firms needs
E.g…….
Consumer goods
The physical and tangible goods sold to the general public
They include durable consumer goofed such as cars and washing machines, and non-durable consumer goods, such as food, that can only be used once
Consumer services
The non-tangible products sold to the general public
They include hotel accommodation, insurance services and train journeys
Capital goods
The physical goods used by industry to aid in the production of other goods and services , such as ,machines and commercial vehicles
Creating value
Increasing the difference between the cost of purchasing bought-in materials and the price finished goods are sold for
Added value
The difference between the cost of purchasing bought-in materials and the price finished goods are sold for
Opportunity cost
The benefit of the next most desired option which is given up
Entrepreneur
Someone who takes the financial risk of starting and managing a new venture
Social enterprise
A business with many social objectives that reinvests most of its profits benefiting society rather than maximising returns to its owners
Triple bottom line
The three objectives of social enterprises: economic, social and environmental
Primary sector business activity
Firms engaged in farming, fishing, oil extraction and all other industries that extract natural resources so that they can be used and processed by other firms
Secondary sector business activity
Firms that manufacture and process products from natural resources, including computers, brewing, baking, clothes-making and construction
Tertiary sector business activity
Firms that provide services to consumers and other businesses such as, retailing, transport, insurance, banking, hotels, tourism and telecommunications
Public sector
Comprises organisations accountable to and controlled by central or local government (the state)
Private sector
Comprises business owned and controlled by individuals or groups of individuals
Mixed economy
Economic resources are owned and controlled by both private and public sectors
Free market economy
Economic resources owned largely by the private sector with very little state intervention
Command economy
Economic resources are owned, planned and controlled by the state
Sole trader
A business in which one person provides the permanent finance and, in return, has full control of the business and is able to keep all profits
Rather ship
A business formed by two or more people to carry on a business together, with shared capital, investment and, usually, shared responsibilities.
Limited liability
The only liability, or potential loss, a shareholder has if the company fails is the amount invested in the comps by, not the total wealth of the shareholder
Private limited company
A small to medium sized business that is owned by t=shareholders who are often members of the same family
This company cannot sell shares to the general public
Share
A certificate confirming part ownership of a company and entitling the shareholder owner to dividends and certain shareholder rights
Shareholder
A person or institution owning shares in a limited company
Public limited company
A limited company , often a large business, with legal right to sell shares to the general public
Share prices are quoted quoted on the national stock exchange
Memorandum of association
This states the name of the company, the address of the head office, through which it can be contacted, the maximum share capital for which the company seeks authorisation and declared aims of the business
articles of association
This document covers the internal working and control the business
For example, the names of directors and procedures to be followed at meetings will be details
Franchise
A business that uses the name, logo and the trading systems of an existing business
Joint venture
Two or more businesses agree to work closely together on a particular project and create a separate business division to do so
Holding company
A business organisation that owns and controls a number of separate business, but does not unite them into one unified company
Public corporation
A business enterprise owned and controlled by the state
Also known as nationalised industry
Revenue
Total value of sales made by a business in a given time period
Capital employed
The total value of all long term finance invested into the business
Market capitalisation
The total value of a company’s issued shares
Market share
Sakes off the business as a proportion of total market sale s
Internal growth
Expansion of business by means of opening new branches, shops or factories (also known as organic growth)
Mission statement
A statement of the business’ core aims, phrased in a way to motivate employees and to stimulate interest by outside groups
Corporate social responsibility
This concept applies to those businesses that consider the interests of society by taking responsibility for the impact of their decisions and activities on customers, employees, communities and the environment
Management by objective
A method of coordinating and motivating all staff in an organisation by dividing its overall aim into specific targets for each department manager and employee
Ethic code (code of conduct)
A document detailing a company’s rules and guidelines on staff behaviour that must be followed by all employees
Stakeholders
People or groups of people who can be affected- and therefore have an interest in- any action by an organisation
Corporate social responsibility
The concept that accepts that businesses should consider the interest of society in their activities and decision, beyond the legal obligations that they have
Family business
A business that is actively owned and managed by at least 2 members of the same family
Monopoly
When a company has 25% of market shares
Oligopoly
When more than one business has over 25% of market shares
Dividends
The shareholder’s part of the company’s profit
Secondary research
…
Qualitative research
Research into the in-depth motivations behind consumer buying behaviour
-open questions that gathers indefinite answers
Quantitative research
Research that leads to numerical results that can be statistically analysed
-Closed questions that gather easy, basic data
E.g. how many times have you been to Portugal on a holiday
Focus groups
A group of people who are asked about their attitude towards a product, service, advertisement or new style of packaging
Sample
The group of people taking part in a market research survey selected to be representative of the overall target market
Random sampling
Every member of the target population has an equal chance of being selected
Stratified sampling
This draws a sample from a specified sub-group or segment of the population and uses random sampling to select an appropriate number from each stratum
Quota sampling
When the population has been stratifies and the interviewer selects an appropriate number of respondents from each stratum
Cluster sampling
Using owner or a number of specific groups to draw samples form and not selecting from the whole population e.g. using one town or region
Geographic segmented sampling
Brand
An identifying symbol, name, image or trademark that distinguished a product from its competitors
Intangible attributes of a product
Subjective opinions of customers about a product that cannot be measured or compared easily
Marketing mix
The four key decisions that must be taken in the effective marketing of a product
Customer relationship management (CRM)
Using marketing activities to establish successful customer relationships so that existing customer loyalty can be maintained
Tangible attributes of a product
Measurable features of a product that can be easily compared with other products
Product
The end result of the production process sold on the market to satisfy customer need
Product positioning
The consumer perception of a product or service as compared to it’s competitors
Product portfolio analysis
Analysing the range of existing products of a business to distribute resources between them
Product life cycle
The pattern of sales recorded bu a product from lain he to withdrawal from the market and is one of the main forms of product portfolio analysis
Consumer durable
Manufactured product that can be reused and is expected to have a reasonably long life, such as a car or washing machine
Extension strategies
These are marketing plans that extend the period of maturity stage of the product before a brand new one is needed
Price elasticity of demand
Measures the responsiveness of demand following a change in price
Mark-up pricing
Adding a fixed mark-up for profit to the unit price of a product
Target pricing
Setting a price that will give a required rate of return at a certain level of output/sales
Full-cost pricing
Setting a price by calculating a unit cost for the product (allocated fixed and variable costs) and then adding a fixed profit margin
Contribution-cost pricing
Setting prices based on the variable costs of making a product in order to make a contribution towards fixed costs and profits
Competition-based pricing
A firm will base its price upon the price set by its competitors
Dynamic pricing
Offering goods at a price that changes according to the level of demand and the customer’s ability to pay
Penetration pricing
Setting a relatively low price often supporting by strong promotion in order to achieve a high volume of sales
Market skimming
Setting a high price for a new product when a firm has a unique or highly differentiated product with low price elasticity of demand
Promotion
The use of advertising, sales promotion, personal selling, direct mail, trade fairs, sponsorship and public relations to inform customers and persuade them to buy
Promotion mix
The combination of promotional techniques that a firm uses to sell a product
Above the line promotion
A form of promotion that is undertaken by a business by paying for communication with consumers
Advertising
Paid-for communication with consumers to inform and persuade, e.g. TV, cinema advertising
Below the line promotion
Promotion that is not a directly-paid for means of communication but based on short-term incentives to purchase
Sales promotion
Incentives such as special offers or special deals directed at consumers or retailers to achieve short-term sales increases and repeat purchases by consumers
Personal selling
A member of the staff communicates with one consumer with the aim of selling the product and establishing a long-term relationship between company and consumer
Sponsorship
Payment by a company to the organisers of an event or team/individuals so that the company name becomes associated with the event/team/individual
Public relations
The deliberate use of free publicity provided by newspapers, TV ad other media to communicate with and achieve understanding by the public
Branding
The strategy of differentiating products from those of competitors by creating an identifiable image and clear expectations about a product
Marketing or promotion budget
The financial amount made available by a business for spending on marketing/promotion during a certain time period
Channel of distribution
This refers to the chain of intermediaries a product passes through from producer to final consumer
Internet marketing
This refers to advertising and marketing activities that use the internet, email and mobile communications to encourage direct sails via electronic commerce
E commerce
The buying and selling of goods and services by businesses and consumers through an electronic medium
Viral marketing
The use of social media sites or text message to increase brand awareness or sell products
Integrated marketing mix
The key marketing decisions complements each other and work together to give customers a consistent message about the product
Start up capital
The capital needed by an entrepreneur to set up a business
Working capital
The capital needed to pay for raw materials, day-to-day running costs and credit offered to customers
Working capital = current assets - current liabilities
Capital expenditure
The purchase of assets that are expected to last for more than one year (long lasting), such as building and machinery
Revenue expenditure
Spending on all costs and assets other than fixed assets and includes wages and salaries
Liquidity
The ability of a firm to be able to pay its short-term debts
Liquidation
When a firm ceases trading and its assets are sold for cash to pay suppliers and other creditors
Overdraft
The bank agrees to a business borrowing up to an agreed limit as and when required
Factoring
Selling of claims over trades receivables to a debt factor in exchange for immediate liquidity- only a proportion of the value of the debts will be received as cash ( this is the debt factor’s profit)
Hire purchase
An asset is sold to a company that agrees to pay fixed repayments over an agreed time period- the assets belong to the company (it is leasing until the final payment is made)
Leasing
Obtaining the use of equipment of vehicles and paying a rental to leasing charge over a fixed period, this avoids the need for the business to raise long-term capital to buy the asset; ownership remains with the leasing company
Equity finance
Permanent finance raised by companies through the sales of shares
Long term loans
Loans that do not have to be repaid for at least one year
Long term bonds or debentures
Bonds issued by companies to raise debt finance, often with a fixed rate of interest
Rights issue
Existing shareholders are given the right to buy additional shares at a discounted price
Trade recievables
The value of payments to be received from customers who have bough goods on credit
Venture capital
Risk capital invested in business start-ups or expanding small businesses that have goof profit potential but do not find it easy to gain finance from other sources
Micro finance
Providing financial services for poor and low-income customers who do not have access to banking services, such as loans and overdrafts offered by traditional commercial banks
Crowd funding
.the use of small amounts of capital from a large number of individuals to finance a new business venture
Business plan
A detailed document giving evidence about a new or existing business, and that aims to convince external lenders and investors to extend finance to the business
Direct costs
These costs can be clearly identified with each unit of production and can be allocated to a cost centre
Indirect costs
Costs that cannot be identified with a unit of production or allocated accurately to a cost centre
Fixed costs
Costs that do not vary with the output in the short run
Variable costs
Costs that vary with output
Marginal costs
The extra cost of producing one more unit of output
Break-even point of production
The level of output at which total costs equal total revenue and neither a profit or a loss is made
Margin of safety
The amount by which the sales level exceeds the break-even level output
Contribution per unit
Selling price less variable cost per unit
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Operations planning
Preparing input resources to supply products to meet expected demand
CAD
Computer aided design
The use of computer programs to create 2D or 3D graphical representations of physical objects
CAM
Computer aided manufacturing
The use of computer software to control machine tools and related machinery in te manufacturing of components or complete products
Operational flexibility
Gather ability of a business to vary both the level of production and the range of products following changes in customer demand
Process innovation
The use of a new or much improved method or service delivery method
Job production
Producing a one-off item specially designed for the customer
Batch production
Producing a limited number of identical products- each item in the batch passes through one stage of production before passing on to the next stage
Mass customisation
Mass customisation is the use of flexible computer aided production systems to meet individual customers requirements at mass-production cost levels
Optimal location
A business location that gives the best combination of quantitative and qualitative factors
Quantitative factors
These are measurable in financial terms and will have a direct impact on either the costs of a site or the revenues from it and its profitability
Qualitative factors
Non measurable factors that may influence business decisions
Multi site location
A business that operates from more than one location
Offshoring
(Outsourcing in a different country; tax!)
The relocation of a business process done in one country to the same or another company in another country
Outsourcing :SKRGLERJGI PIT$
The relocation of a business process done in another…
Multinational
a business with operations or production bases in more than one country
Trade barriers
Taxes (tariffs) or other limitations on the free international movement of goods and services
Scale of operation
The maximum output that can be achieved using the available inputs (resources)
This scale can only be increased in the long term by employing more of all inputs
Economies of scale
Reductions in a firms unit (average) costs of production that result from an increase in the scale of operations
Diseconomies of scale
Factors that cause average costs of production to rise when the scale of operation is increases
Enterprise resource planning
The use of a single computer application to plan the purchase and use of resources in an organisation to improve the efficiency of operations
Supply chain
All of the stages int eh production process from obtaining raw ,materials to selling to the consumer - form point of origin to point of consumption
Sustainability
Production systems that prevent waste by using the minimum of non-renewable resources so that levels of production can be kept going in the future
Transformation process
The process from which inputs, like raw materials, are put through to. Produce outputs
Income statement
Records the revenue, costs and profit or less of a business over a given time period
Gross profit
Equal to sales revenue less cost of sales
Revenue
The total value of sales mad enduring the trading period = selling price x quantity sold
Cost of sales
This is the direct cost of goods that were sold during the financial year
Low quality profit vs high quality profit
One off profit that cannot easily be repeated or sustained
Vs
Profit that can be repeated and sustained
Statement of financial position
An accounting statement that records the values of a business’ assets, liabilities and shareholders’ equity at one point in time
Liability
A financial obligation of a business that it is required to pay in the future
Share capital
The total value of capital raised from shareholders by the issue of shares
Intellectual capital or property
The amount by which the market value of a firm exceeds its tangible assets less liabilities
An intangible asset
Goodwill
Arises when a business is valued at or sold for more than the balance sheet -sheet value of its assets
Cash flow statement
Record of the cash received by a business over a period of time and the cash outflows form the business
Liquidity
The ability of a firm to pay its short term debts
Liquid assets
Current assets - inventories =liquid assets
Window dressing
Presenting the company accounts in favourable light - to flatter the business performance
Liquidation
When a firm ceases trading and its assets are sold for cash to pay suppliers and other creditors
Insolvent
When a business cannot meet its short term debts
Bad debt
Unpaid customers’ bills that are now very unlikely to ever be paid
Overtrading
Expanding a business rapidly without obtaining all of the necessarily finance so that a cash-flow shortage develops
Creditors
Suppliers who have agreed to supply products on credit who haven’t been paid yet
Manager
A person responsible or setting objectives, organising resources and motivating staff so thar the organisations aims are met
Leadership
This is the art of privations a group of people towards achieving a common objective
Autocratic leadership
A style of leadership that keeps all decision-making at the centre of the organisation
Democratic leadership
A leadership style tear promotes the active participation of workers in taking decisions
Paternalistic leadership
A leadership style based on the approach that the manager is in a better position than the workers to know what is best for an organisation
Laissez faire
A leadership style that leaves much of the business decision making to the workforce
A hands off approach and the reverse of autocratic style
Informal leader
A person who has no formal authority but has the respect of colleagues and some power over them
Emotional intelligence
The ability of managers to understand their own emotions and those of the people they work with to achieve better business performance
Motivation
The internal and external factors that stimulate people to take actions that lead to achieving a goal
Self actualisation
A sense of self- fulfilment reached by feeling enriched and developed by what one has learned and achieved
Job enrichment
Aims to use the full capabilities of workers by giving them the opportunity to do more challenging and fulfilling work
Hygiene factors
Aspects of a workers job that have the potential to cause dissatisfaction
