commerce Flashcards
on thursday first period
Characteristics of an Entrepreneur
Opportunity Recognition: Entrepreneurs see and seize business opportunities.
Market Gaps: Identify unmet demands or improvements in existing products.
Strengths Alignment: Select opportunities that match their strengths and personality.
Objectives & Vision: Establish clear goals and a motivating vision for the business.
Innovation & Resilience: Embrace change and continuously improve products/services.
Case Study - Dion Devow
Business: Founded Darkies Design in 2010, focusing on Aboriginal-themed apparel.
Market Gap: Recognized a lack of Indigenous Australian clothing.
Controversial Name: Reclaimed a derogatory term to express pride in heritage.
The Selling Process
Product Differentiation: Make products appear unique or superior to competitors.
Success Factors:
Changes in packaging or labeling.
Quality service and convenience.
Better value for money.
Factors Influencing Purchase
Customer Service: High-quality service enhances customer experience.
Convenience: Products that save time, e.g., fast food.
Value for Money: Competitive pricing strategies, e.g., tiered car models.
Quality: Durable and well-designed products stand out in the market.
Targeting Customers
Market Segmentation: Divides total market into groups based on common traits (age, gender, etc.).
Target Market: Primary (major revenue source) and secondary (backup market).
Niche Marketing: Focus on a very specific segment of the market.
Promotion Strategies
outh Targeting:
Build brand loyalty through logos and social media.
Use buzz marketing for word-of-mouth promotion.
Regulation:
Governed by the Competition and Consumer Act 2010 and AANA Code of Ethics.
ASB ensures compliance with advertising standards.
Marketing Strategies
Promotion: Methods to inform, persuade, and remind customers.
Forms of Promotion:
Personal selling.
Relationship marketing.
Public relations.
Sales promotions (coupons, free samples).
Profit and Loss Statements
Trading: Income from selling goods/services.
Income Statement Components:
Revenue: Total income from sales.
COGS: Cost of goods sold.
Gross Profit: Revenue - COGS.
Expenses: Costs incurred in running the business.
Net Profit/Loss: Gross profit - expenses.
Circular Flow Model
Definition: Illustrates connections between five economic sectors: consumers, businesses, financial institutions, government, and overseas.
Injections & Leakages: Help measure changes in economic activity.
Consumer Sector
Resources: Consumers possess land, labor, capital, and enterprise.
Consumption: Households spend their income on goods and services.
Interdependence: Consumers rely on businesses for goods/services; businesses depend on consumers for income.
Business Sector
Resource Exchange: Individuals sell resources to businesses for income.
Production: Businesses utilize these resources to produce goods/services.
Interdependence: Businesses need consumer purchases to thrive.
Financial Sector
Role of Financial Institutions: Act as intermediaries between savers and borrowers.
Saving: Leakage from the flow; money set aside for future use.
Investment: Injection into the flow; borrowed money used for business expansion.
Government Sector
Levels of Government: Local, state, and federal.
Taxation: Leakage; taxes collected from income/profits.
Government Expenditure: Injection; spending on infrastructure, welfare, education, and health.
Overseas Sector
Exports: Injection; Australian goods/services sold abroad.
Imports: Leakage; purchasing foreign goods/services.
Economic Impact:
Injections > Leakages = Economic Expansion
Leakages > Injections = Economic Decline
ACCC - Australian Consumer Competition Commission
Role: Ensures fair trading and consumer protection in the marketplace.
Ethical Decision-Making
Corporate Social Responsibility (CSR): Businesses’ commitment to ethical practices, sustainability, and community engagement.
The Business Cycle
Definition: Fluctuations in economic activity over time.
Phases:
Recession: Two consecutive quarters of negative growth.
Depression: Four consecutive quarters of negative growth.
Causes of Fluctuations: Consumer spending, investments, government spending, and exports.
Economic Changes
Contraction:
Falling output and consumer spending.
Decreasing inflation, wages, and rising unemployment.
Expansion:
Rising output and consumer spending.
Increasing inflation, wages, and lowering unemployment.
Demand Definition
Demand: Quantity of a product consumers are willing to purchase at a specific price at a given time.
Law of Demand
Law of Demand:
As price increases, demand decreases.
As price decreases, demand increases.
Changes in Demand
Expansion in Demand: Increase in demand for goods and services.
Contraction in Demand: Decrease in demand for goods and services.
Supply Definition
Supply: Quantity of a good or service businesses are willing and able to offer at a specific price at a given time.
Law of Supply
Law of Supply:
As prices increase, quantity supplied increases.
As prices decrease, quantity supplied decreases.
Changes in Supply
Expansion of Supply: Increase in supply for a good or service.
Contraction in Supply: Decrease in supply for a good or service.
Market Equilibrium
Market Equilibrium: The point where the supply and demand curves intersect; buyers and sellers agree on a price.
Price Mechanism
Price Mechanism: The interaction of supply and demand determines the price and quantity of goods/services.
Price Changes
Price Changes: Result from changes in demand and supply, influenced by factors such as:
Rise in consumer income
Changes in consumer taste/preferences
Population increase
Substitute prices
Complementary good prices
Increase in Demand
Increase in Demand: Shifts demand curve to the right;
Results in higher equilibrium price and quantity.
Decrease in Demand
Decrease in Demand: Shifts demand curve to the left;
Results in lower equilibrium price and quantity.
Causes of Demand increase:
Causes of Demand Increase:
Rise in consumer preferences.
Population growth.
Cheaper substitutes.
Expectations of future price increases.
Causes of Demand Decrease:
Causes of Demand Decrease:
Fall in consumer preferences.
Population decline.
Cheaper substitute goods.
Expectations of future price decreases.
Increase in Supply
Increase in Supply: Shifts supply curve to the right;
Results in lower price and higher quantity.
Decrease in Supply
Decrease in Supply: Shifts supply curve to the left;
Results in higher price and lower quantity.
Factors Causing increase in supply
Factors Increasing Supply:
Increased efficiency.
Decrease in production costs.
Favorable climatic conditions.
Increase in number of suppliers.
Factors Decreasing Supply:
Factors Decreasing Supply:
Decreased efficiency.
Increase in production costs.
Unfavorable climatic conditions.
Decrease in number of suppliers.
What is a Market?
Market Definition: A situation where buyers and sellers come together to exchange goods and services.
Types of Markets
Types of Markets:
Retail market
Labour market
Financial market
Stock market
Retail Market Definition
Retail Market: Markets where consumers buy most of their goods and services.
Retail Market Examples
Examples of Retail Markets:
Shopping centres in the CBD
Local shopping centres
Shopping strips
Group of shops
Online shopping websites
Online Shopping Statistics
Online Shopping (2019):
Over $23 billion in sales.
6.6% of total retail.
80% of purchases made by Australians.
Labour Market Definition
Labour Market: The interaction of buyers (employers) and sellers (employees) of labour.
Labour Market Characteristics
Employers: Demand skills of employees.
Location: Operates without a specific location, using communication methods.
Connection Methods: Job signs, newspapers, online job boards.
Australian Wages
Wages Regulation: Minimum wage as of July 1, 2019, is $19.49 per hour or $740.80 per 38-hour week.
Financial Market Definition
Financial Markets: Connect savers and borrowers within an economy.
