Definitions Flashcards
Market
A place or process whereby customers and suppliers trade
Marketing
the management process involved in identifying, anticipating and satisfying consumer requirements profitably.
management process
requires people to take responsibility for decision making
identifying
identify the customers needs and want through market research and data analysis
anticipating
predict what is customers might want in the future
satisfying
satisfied customers are more likely to become loyal customers
profitably
marketing is about earning profit
Market segmentation
the process of splitting a market into distinct consumer groups to better meet their needs
market segment
a distinct group of customers with similar characteristics, e.g. age, gender, income, ethnicity and religion.
Targeting
The process of devising an appropriate marketing mix and marketing strategies for different market segment.
Target market
a particular market segment that a business aims to focus its marketing effort on
market research
the process of collecting, recording and analyzing data about the customers, competitors and market for a product.
primary research
the collection of first-hand data for the specific needs of business
secondary research
the collection of data from second-hand sources
Objectives
A statement of a specific target to achieve the aim of a business
the importance of objectives
- Help to motivate staff
- provide direction for all individuals and departments of a business
Provide basis for measuring and controlling the performance of a business.
Primary sector
grow and gather natural resources (agriculture, forestry, fishing and animal husbandry)
Secondary sector
where raw materials are made into products
Tertiary sector
providing service to final consumers or business
Public sector
owned by the government, objectives: increase the number of students entering higher education, increase special needs provision in school, reduce response time of emergency services.
Factors of production
Land: all natural resources
Labour: employee
Capital: machinery, equipment and finance
Enterprise/Entrepreneur: people prepared to take the risk of setting up business and organize the land, labour and capital
The purpose of business
To use the factors of production to create goods and services in order to satisfy the needs and wants of people, organizations and governments.
Stakeholders
Any person or organization with an interest in and is affected the activities and performance of a business.
Sole trader
a business owned and
managed by one person
partnership
a business owned and managed by two or more people
limited companies (5)
- owned by shareholders
- profit is distributed to shareholders through dividends
- capital is raised by selling shares
- incorporated/limited liability business
- AGM is must
Organizational Structures
The formal, internal framework of a business that shows how it is managed or organized
Hierarchy
the number of layers of formal authority in an organization
(people who are on the same level in the organization have the same status)
Chain of command (3)
- The route through which authority is passed down through an organization
- the chain of command can be short or long)
- Each person in the chain of command is directly responsible to the person immediately above them and directly responsible for the person directly below them
Span of control
the number of subordinates directly reporting to each supervisor/manager
Subordinate
The employee who is below another employee in the organization’s hierarchy
Flat hierarchy
few levels of authority
Roles, responsibility and inter-relationship of Directors and CEO
(5)
- Setting Strategies - the long-term plans for the business
- Making sure that resources are available to achieve objectives
- Reviewing the performances of managers
- Protecting the interests of shareholders and other stakeholders
- Providing leadership to ensure the success of the business
Roles, responsibility and inter-relationship of Managers (5)
- Making sure that the decisions of the directors are carried out
- Delegating tasks to members of their department
- Taking the decisions needed to achieve departmental targets
- Motivating employees in the department so that they work hard to achieve the department’s and company’s objectives
- Solving day-to-day problems that may arise within the department
Roles, responsibility and inter-relationship of supervisors and employees
(2)
- Complete their tasks efficiently and at the required quality standard set by managers
- Work towards achieving individual, group or departmental targets.
Self-actualization
Reaching one’s full potential
Esteem needs
respect, recognition, status
Social needs
Accepted, friendship, belonging to a group
Safety needs
Health, job security, free from threats
Physical needs
Water, food, shelter, clothing and rest
Importance of Maslow’s hierarchy of needs (2)
- Improve employee motivation
- Increase business efficiency, reduce business costs and improve profitability improve competitiveness.
Limitations of Maslow’s hierarchy of needs (4)
- It is often difficult to identify how much of need has been met and which level each employee is on.
- Money might also satisfy esteem needs as well as those lower down the hierarchy
- Not everyone has the same needs as those in Maslow’s hierarchy
- Self-actualization is rarely, if ever, achieved. Therefore, unless more challenging tasks are always being provided, it is unlikely that work will help to satisfy this need. There is the risk that if jobs are no longer challenging, employees will become demotivated.
- There is no explanation of what motivates people who have achieved self-actualization. E.g. Bill Gates.
Hygiene Factors (Def + 5)
Factors necessary for people to work but not make people work harder:
1. Working Conditions
2. Relationship with others
3. Salary or wage
4. Supervision - leadership style
5. Company policy and administration
Motivator (Def + 5)
Factors which encourage people to work harder:
1. The work itself - the task employees do
2. Responsibility
3. Advancement - opportunity for promotion
4. Self-achievement
5. Recognition of achievement - recognized by management and colleagues.
Profit and Loss Account/Income Statement
A financial statement of a firm’s trading activities over a period of time, usually one year. It shows the profit or loss of a business.
Sales revenue/turnover
Price * quantity sold
Gross profit
turnover - the cost of goods sold
Net profit
Gross profit - expenses
Cost of goods sold
The direct cost of the goods that are actually sold, e.g. direct material, direct labour
Expenses
Indirect costs of production, e.g. insurance, rent, management salaries
Internal Growth (organic growth)
An organization expands using its own capabilities and resources without involving other organizations
External Growth
A business relies on third-party organizations for growth
Strategetic Alliances (4)
- More than two businesses may be part of the alliance
- No new business is created. SA is typically an agreement to work together for mutual benefit.
- Individual businesses in the alliance remain independent
- Strategic alliances are more fluid than a joint venture
Product
Any good or service produced to satisfy the needs or wants of customers.
Branding
The use of an exclusive name, symbol or design to identify a specific product or organization. It is a form of differentiating a firm’s products from those of its competitors
Brand image
The general impression of a product held by consumers
Importance of Branding
- Consumers recognize its product more easily when
looking at similar products - Its product can be priced higher than less well-known brands
- It is easier to launch new products on the market
because consumers already know and trust the brand, and so are more likely to try it than if it was from an unknown brand – brand loyalty
Below-the-line Promotion
the use of non-mass media promotional activities, allowing the business to have direct control, aimed directly at a target audience rather than a generic audience
Place
Channels of distribution – how a product gets from the producer to the final consumer
Retailers
The seller of products to the final consumers, e.g. Walmart, 7-Eleven, Tesco
Wholesalers
Buy large quantities of products directly from manufacturers and then separate the bulk purchases into smaller units for resale, mainly to retailers
Price
the amount paid by a customer to purchase a good or service
position/perception map
A position/perception map is a visual tool that reveals customer perceptions of a product or brand in relation to its competitors.
packaging
The way in which a product is presented to the consumer, e.g. colour, shapes, sizes and material
Promotion
marketing activities used to communicate with customers to inform and persuade them to buy the product
Above-the-line Promotion
Paid-for marketing communication via independent mass media
