Exam Flashcards
What is the primary sector
This is the sector that is responsible for the extraction of raw materials from the land eg farming and mining
What is the secondary sector
This sector involves the assembling of goods or raw materials to make or manufacture man made goods
What is the tertiary sector
This sector is involved in providing services such as banking, teaching
What are the sectors in sectors of industry
Primary, secondary and tertiary
What is the private sector
This is the part of the economy that is owned and controlled by a private firm or an individual. Their main aim is to make a profit.
What is the public sector
This is the part of the economy that is owned, controlled and funded by the government. Their main is to help society with a specific area such as health
What is the third sector
This is the part of the economy that is undertaken for voluntary purposes. Examples are charities, which is ran for non profit. Their main aim is to support a cause not being covered fully by the public sector.
What are the sectors in the sector of economy
Private, public and third
Sole trader advantages
~ decisions are made easily as no permission is needed from a boss
~ owner makes all the decisions
~ owner takes all the profits
~ firm is easy to set up
Sole trader disadvantages
~Stressful- got to make all the decisions
~ difficult to arrange time off
~unlimited liability
~ limited sources of finance which limits expansion
Partnership advantages
~ more capital is available than a sole trader
~ workload is shared between partners
~ greater pool of ideas/ skills than a sole trader
~ parnters can specialise in an area and so quality of work improves
Diadvantages for a partnership
~possible clash of personalities
~each partner has unlimited liability (could lose all possessions)
~ profits have to be shared amongst the partners
Advantages of ltd (private limited company)
~has a separate legal identity
~ raise more capital than a sole trader and partnership
~shareholders have limited liability (only lose what they put in the business)
~they send their annual account to registrar of companies but is not in the public domain
Disadvantages of ltd
~Consent of other shareholders needed before shares can be sold
~expansion is limited to the funds of friends and family
~have to pay auditors to look at the firms book
What is an external factor
This area covers everything that goes outside of the business
What is a political external factor
This is any action take by the government eg government laws to ban smoking which forced many pubs to introduce outside smoking areas
What is an economic external factor
This is the current state of the economy that will influence business eg if the economy is in a recession, the rate of unemployment, the interest rate, the exchange rate
What is a socio-cultural external factor
- The cultural trends and buying habits of the market, such as soap powder companies reduced the size of their bottles as the average family size was shrinking and so too the size of homes or kitchens
- population trends such as demographics eg if the population is growing through an increase in birth rates th govt will plan for a rise in demand schools in 5 years
What is technological external factor
This is latest developments with the technology eg the use of cad in designing training shoes means it is easy to have a design office in one office in one country and a manufacturing plant in another country eg china
What is environmental external factor
This involves action and laws that promote the upkeep of the enviornment eg the need to recycle waste has led to introduction of bins with separate compartments
What is competitive external factor
This is the actions of competitors that force a firm to react eg tesco launching the successful self-service tills has forced many others supermarkets to follow
What is an interest
What the stakeholder wants from the business
What is an influence
The action or decision te stakeholder can take that will affect the business
What does a manager want
Status & responsibility
Their decisions to be successful
What is the managers action
Appraise staff
Make decisions
Decide on the firms objs
Customers want
Cheap prices
Quality product/ service
Customers action
Change to another competitor
Their demand will control prices
Bank want
Firm to take out loans
Bank action
Charge an interest rate
Grant a loan
Give advice of the finances of the business
Why have good customer service
Firms are most likely to produce a good that the customer wants and so high sales will result
Complaints from customers will be reduced
The firm will get a good reputation and may find it easier to get a government grant
Ways of maximising customer sevice
- A firm should research the wants of a customer to find out exactly what would make them happy
- A firm should invite customrs to make comments on the product or sevice that the firm is being offered eg customer loyalty cards
- charging fair prices that reflect the product or service being offered
The objectives for private sector
- survial
- growth
- profit max
- max sales
Objectives for public sector
- cut costs
- social responsiblity
- provide a wide range of sevice
How to segment a market
Age Income Occupation Hobbies Gender Sports Marital status
What are the stages in the product life cycle
Introductory, growth, maturity, saturation and decline
What is the introductory stage
sales are low as product has just launched and profit is low as firm has to cover R&D’s costs
What is the growth stage
Sales start to rise as some repeat purchases are undertaken, profits start to rise- as the firm is able to buy in bulk
What is the maturity stage
Sales are at their peak/ at their highest as their product is fully established, profits peak as profit becomes market leader
What is the saturation stage
Sales start to dip slightly, extension strategies?
What is decline stage
Sales fall, product losing favour in market, profits fall as sales fall product is seen unpopular
Benefits on having a brand name
Able to charge a high price which maximises profits
Differentiate from the competition
Easier to launch a new extension to the branded product
Customers are often loyal which means repeat sales
Costs of branding
If the celebrity involved with the brand misbehaves then the brand will receive poor publicity
It costs $1000’s of pounds to establish themselves
Brand is so extinct that its difficult to launch products that are different
High value pricing
Premium, skimming, competitive and discrimination
Value for money pricing
Promotional, penetration and loss leaders
Types of market research
Desk and field
Method of field research
Street survey Postal survey Telephone survey Observation Hall test Test marketing Group survey
Method of desk research
Newspapers
Books
Textbooks
Company accounts
Databases
Sort customers data eg customers age of your customers
Spreadsheet
Can show Cost on advertising campaign
Graphs
Calculations
Survey monkey
Online survey
Youtube
Show ads
Monitor likes and views
Advertise
Demonstrate
Data with product
Factors influencing choice of supplier
Costs- cheap prices = > max profits
Location- near => low delivery charges
Reliable - delivers on time=> wont hold up production line
Costs of overstocking
Stock will perish
Employees steal
Storage costs - air conditioning
Wont max profits
Cost of understock
Dont max sales
Gain bad reputation
Production line has to stop => loses part finished products
Examples of poor ethical marketing
Obtaining market research information without the consumer agreeing
Making false claims in an advert
Selling on private info about customers
Advantages of ethical marketing
Good reputation so customers are loyal
Priced at high price so max profits
Can recruit a better employee and they are motivated
Disadvantages of ethical marketing
Higher costs : more expensive than non fairtrade farmers
Has to stic by its claims and will be monitored by pressure groups and consumers
