definitions Flashcards
Define economic problem
-people wants are unlimited
-resources are limited
Define value for money
-product/ service is worth the money
Define needs
-basic things needed for survival
Define wants
-things not needed for survival but for satisfaction
Define demand
-the need to satisfy wants and need
Define scarcity
-lack of sufficient products to fulfil the total wants of the population
Define opportunity cost
-next best alternative given up by choosing another option
-sacrifice something
-try to make as low as possible
Define specialisaiton
-people & businesses concentrate on what they are best at
-causes division of labor
define division of labor
-when production process is split into diff tasks & each worker performs the task
-form of specialisation
-increases production
define adding value
-difference btw selling price of a product & cost it’s bought in (materials & componenets)
Define primary sector
-extracting natural resources (raw materials)
define secondary sector
-processing raw materials into final products (manufacturing & construction)
define tertiary sector
-providing service and distribution of goods
define industralisation
-moving from primary sector to secondary sector
define deindustralisation
-moving from primary & secondary sector to tertiary sector
Define planned eocnomy
-economy is mostly led by public sector
-usually associated with communism
define mixed economy
-economy is led by public and pvt. sector
define free market economy
-economy is led mostly by pvt. sectors
define enterprise
-actions of a person who takes initiative by taking a risk to start the business
-the business / company itself
define entrepreneur
-person who markets the business
Define business plan
-doc containing important details of business and objectives created by entrepreneur
Define business idea
-what products/ service business will provide
define turnover
total value of sales over a period of time
define capital employed
money used in business
define internal business growth
-business expands existing operations using personal money or profits
define external business growth (intergration)
-business expands by taking over or merging with another business
define merging business
-2 businesses combine mutually
define take over
-a business is bought over forcefully
define horizontal integration
-2 similar businesses from the same industry combines
Define vertical backward integration
-a secondary sector business combines with a primary sector business
define vertical forward integration
-a secondary sector business combines with a tertiary sector business
Define conglomerate integration
-a businesses combines with a business from a diff industry
define sole trader
-business owned by 1 person
-simplest form of business
-usually small
define unlimited liability
-person is liable for company’s debts
define partnership
-business owned by 2 or more owner
-usually 2 - 20
define Deed of partnership
-a doc that contains how profit is divided, role of each person and other things to prevent future dispute
define Ltd company
-businesses that have a legal identity & owned by majority shareholder (51%)
define Annual General Meeting (AGM)
-a mandatory annual meeting where all shareholders of Pub. Ltd. company are invited to attend where they:
-analyse business performance (accounting)
-make major decisions
-decide dividends
define dividend
-division of profits among shareholders
define profit maximisation
-to get max profits
define public corporation
-business owned & controlled by gov. to provide service to people in a non- profit basis
define business survival
-make sure business doesn’t collapse from:
-competition
-new businesses
-recession = sales go down
Define market share
how much of market is owned by the business
define stakeholder
-people who are affected by business decisions
define marketing
identifying customer wants and satisfying them profitably
define customer
person who buys products
define market
-where buyers & seller come tgt to cater to demographic
define anticipating changes
making futuristic call on changes
define consumer
person who uses products
define market segment
-sub groups of entire market
define niche market
-market for specialised products & people are willing to pay a high price for it
-short lived - based on trends
-more profits
define market research
-process of gathering, analyzing & interpreting info. about the market (before selling)
define mass market
-market for general products for everyone
-more safe
define product orientated
-making & selling a product without research
-less cost, time, effort
define market orientated
-doing research before making product
-more success (but not guaranteed)
define primary research
-doing field research - using first hand info.
-new & specific info.
-more time, effort, expensive
-accurate & reliable
define secondary research
-doing desk research - using second hand info.
-less time, effort, expensive
-old & not specific info.
-too much irrelevant info.
-unreliable
-have to pay sometimes
define focus groups
-people who are paid to test products
define sampling
groups of selected people who respond to a market research
(only in primary research)
define consumer goods
goods bought by consumers for their own use
define producer goods
goods make for other businesses to use
define marketing mix
-4 key activities that make your product successful
-Product
-Price
-Promotion
-Place
define consumer service
service used by consumers
define producer service
service for other business
define feasibility
decide if product is worth selling by considering the resources, profit and capacity to produce
define crowd funding
-people willing to invest even though they haven’t seen the product
define price
what customer pays for a product
-if brand loyalty, price don’t matter
-value of money = repeated purchases
define price elasticity of demand
-how responsive the demand for a product is when it’s price changes
define elastic demand
small change in price causes big change in demand
-eg, luxury goods
define Inelastic demand
demand does not change much when price changes
-eg, necessary goods
define promotion
-communication with customer which lead to more sales
define Point Of Sales Display (POS)
-products specifically placed around the entrance/ counter to entice buyer
define Public relations
-creating a positive image by doing good things to increase sales
-good for negative products - eg, beer, cigar
eg. raising awareness, sponsoring, donating
define marketing budget
how much money businesses have to spend to market its products
define free publicity
people say good things about products without the company having to give them money
define marketing strategy
plan with the right combination of marketing mix to make a product successful
