Facts Flashcards

(38 cards)

1
Q

Identify the stages in product lifestyle

A
Development
Introduction
Growth
Maturity
Decline
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2
Q

The product lifestyle

What is development

A

The business is researching and developing the product. product testing and trials take place
. the product is not yet available for sale.

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3
Q

The product life-cycle

What is introduction

A

The business launch is the new product on the open market and makes it available for sale. During this stage, The business advertises the product and uses promotions to encourage sales

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4
Q

Product life-cycle

What is growth

A

Customers are now familiar with the product and sales are increasing. At this stage of the life-cycle, sales are increasing at the fastest rate.

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5
Q

Product life-cycle

What is maturity

A

During the stage, sales of the product have reach their highest. It is likely that the number of new customers is reducing and sales growth is limited. Other businesses organisations may have entered at the market to compete with a number of similar products available may mean the market is saturated

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6
Q

The product life-cycle

What is decline

A

In the decline phase sales of the product will begin to fall. The business will not actively advertise the product and will eventually remove from the sale.

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7
Q

What is an extension strategy

A

Action is a business can take to extend the life of a product and increase sales

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8
Q

Examples of extension strategies

A
Advertising
Price reduction
Add value
Explore new markets
New packaging
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9
Q

Cost of production formula

A

Product costs+ profit= selling price

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10
Q

Examples of pressed strategies

A

Competitive prices
Price skimming
Psychological pricing
Price penetration

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11
Q

What is competitive pricing

A

Selling a product with a price which is similar to other local competitors however it will be lower so customers will buy yours

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12
Q

What is price skimming

A

Introducing the product at a high price and then it gradually lower as it overtime

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13
Q

What is psychological pricing

A

Set an approach that appears attractive to a customer for example 999 rather than 1000
99p

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14
Q

What is price penetration

A

Introduce the product at a lower price than usual to attract customers gradually increase the price all the time

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15
Q

advertising

A
Leaflets
Social media
Websites
Newspapers
Magazines
Radio
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16
Q

What is a sole trader

A

A business owned and controlled by one individual

17
Q

Give an example of a sole trader

A

Plumber
Electrician
Mobile

18
Q

Examples of a sole trader

A

Easy to set up
Low set up costs
The owner makes all the business decisions
You can choose your working hours

19
Q

Disadvantages of a sole trader

A
Difficult for the business to grow
Banks are less keen to lend
No one to share a responsibility with
May have to long work long hours
Unlimited liability
20
Q

What is partnership

A

Business that is owned and controlled by two or more individuals

21
Q

Examples of a partnership business

A

Estate agents
Accountant
Solicitors

22
Q

Advantages of partnership

A

Partner is bringing different skills
Responsibility and risk a shared
Partners can discuss queries before finalising decisions

23
Q

Disadvantages of partnership

A

Decision-making can be consuming
There is a potential disagreement and conflict
All partners are jointly responsible for business debt

24
Q

What is a franchise

A

A business organisation where the franchisor grants a license to another business so they can sell brand or business ideas the franchisor owns the business ideas

25
Examples of a franchise
McDonald’s Pizza Hut Starbucks
26
Advantages of a franchise
Limited business and its industry experience The franchise still owns the business but not the idea Is easier to gain customers
27
Disadvantages of franchise
The initial and ongoing costs of operating a franchise are not cheap The franchise will need to stick to the marketing activities agreed by the franchisor
28
What is the functional area
A department that plays a pacific role within an organisation and his employees carry out a particular aspect of the work of the organisation
29
What are the four main functional areas
Human Resources Marketing Operations Finance
30
What is the formula for total cost
Fixed cost + variable costs = total cost
31
What is revenue
The money a business earns from selling goods or providing services
32
What is total revenue
The total amount of money earned at a particular output level
33
What is the formula for total revenue
Total revenue= selling price per unit X number of sales
34
How to calculate profit
Sales revenue - total cost = profit/loss
35
What is Break even
The point at which a business makes no profit and no loss
36
The formula for calculating breakeven points in units
BEP=FC divided by (SP-VCPU) Fixed costs Variable cost per unit
37
What are the name of the three lines which could be shown on a break even graph
Fixed cost Total cost Total revenue
38
How to calculate cash flow
Net cash flow = cash inflow - cash outflow