Key term definitions Theme 1 Flashcards
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What is a brand?
A symbol, logo or design that is recognisable and
distinguishes a product from competitors
A unique design/sign/symbol/words/logo which makes it
recognisable/distinguishes/differentiates it from its
competitors
What is competition?
The rivalry among sellers trying to achieve goals such as
increasing profits, market share, and sales volume
What is a competitive market?
When there are many rivals selling similar products
What is a competitor?
A rival business operating in the same market offering similar
goods or services (McDonalds and Burger King)
What is direct competition?
Businesses produce similar products that appeal to the same
group of customers
What is a dynamic market?
A market that is subject to rapid and continuous change
What is indirect competition?
Different businesses make or sell products that are not in
direct competition but compete for the same customer
experience e.g. Netflix and the local cinema
What is invoation?
The creation, development and implementation of a new
product, process or service.
Creating a new idea/product/process and turning it into a
marketable/sellable product/service.
What is a market?
Where buyers and sellers interact
What is market growth?
Increase in demand/sales for a particular product or service
What is market size?
total amount of sales/customers in a market measured by value/volume.
What is a mass market?
a large unsegmented market where mass appeal products are on sale
What is a niche market?
A specialist area of the market/is a subset of the market on
which a specific product focuses. It is a smaller segment of a
larger market where consumers have specific needs and
wants.
A specialised section of the market where customers have
specific needs/wants.
What is market orientation?
When a business’s products/services are based around the
needs and wants of the customer.
The business finds out the needs and wants of the customers
and responds to them/meets customer requirements
What are market reports?
A document that contains information, stats, research and facts about a chosen field.
what are observations in a market?
market researches observe behaviour of customers
What are market segments?
An identifiable group of individuals/a part of the market where
consumers share one or more characteristic or need
What is social networking?
A platform such as Facebook, X and You Tube, which can be
used to market a businesses products/services
What is test marketing?
Trailing a product in a small area to see its performance and assess suitability.
What is added value?
The increase in value that a business creates when
producing a product/service. The difference between the
price the customer pays and the total cost of inputs needed
to create a product
The difference between the selling price and the cost of
inputs
What is market mapping?
A form of market positioning. It is the use of a 2-dimensional
diagram that plots products or services in a market using two
key variables. It is used to spot a gap in the market
What is Market positioning?
An effort to influence consumer perception of a brand or
product, relative to the perception of competing brands or
products
What is a complementary good?
Products consumed/used together, so they are purchased
together E.g. printer and printer ink
What is demand?
The quantity of goods/services that a consumer is willing to
buy at a given price and at a given time
What are demographics?
The structure of the population such as age, gender and
geographical distribution
What are external shocks?
Factors beyond the control of a business
What is seasonality?
When demand rises or falls at particular times of the year
What are substitutes?
Goods that can be bought as an alternative to others, but
perform the same function E.g. petrol car and electric car
What are Government Subsidies?
A payment given to producers, usually to encourage
production of a certain good
What are Indirect taxes?
Taxes imposed by the government on spending e.g. VAT and
Excise duties. Responsibility for payment lies with the
business.
What is supply?
The amount that producers are willing/able to produce at a
given price/over a given period of time
What is equilibrium price?
The price where supply and demand are equal. Also known
as market clearing price
What are Non Price Factors?
Factors other than price e.g. Change in consumer incomes,
advertising and seasonality
What is a luxury good?
Goods that consumers like to buy if they can afford them e.g.
air travel and fashion items
What is a necessity good?
Basic goods that consumers need to buy e.g. food, electricity
and water
What is price elastic?
Quantity demand is responsive to a change in price
What is price elasticity of demand? (PED)
Measures the responsiveness of quantity demanded to a
change in price. Always negative due to laws of demand.
What is price inelastic?
Quantity demanded for the product is less responsive
proportionately to a change in price
What is income elasticity of demand? (YED)
Measures the responsiveness of changes in quantity
demanded to changes in consumer income
To estimate how quantity demanded will change given
changes in income
What is the marketing mix?
A plan for using the right blend of product, price, promotion,
and place in order to maximise sales
What is design for recycling?
Producing products using materials that have been discarded
as waste and recycled
What is design for reuse?
When a product is designed to allow for disassembly at the
end of its life and the re-use of the materials
What is the design mix?
The combination of factors needed in designing a product
including Aesthetics, Function, Economic Manufacture
What is ethical sourcing?
When a business buys materials that are produced with fair
working conditions/pay and minimum impact on the
environment
What is rebranding?
A marketing strategy in which a new name, term, symbol,
design or combination is created for an established brand
with the intention of developing a new, differentiated identity
in the minds of consumers, investors, and/or competitors.
What is resource depletion?
The using up of natural resources
What is advertising?
A paid form of communication, used by a business to raise
customer awareness of its products, services and brands, to
persuade purchases to be made
What is customer loyalty?
Customers favouring a business over competitors when
making a purchase/favour it over competitors in the same
market.
What is direct marketing?
Where a business mails out leaflets or letters to households
What is manufacture/corporate branding?
Brands created by the producers of goods and services e.g.
Kellogg’s cornflakes (bear the producers name)
What is personal selling?
Direct communication between a salesperson and the
customer
What is product branding?
Products that only contain the name of the product category
rather than the company or product name e.g. Carrots
What is promotion?
The way a business creates demand/awareness for its
product/service.
What is public relations?
An organisation’s attempt to communicate with interested
parties, usually through unpaid media such as press
conferences
What is sales promotions?
Methods of promoting products in the short term to boost
sales
What is competitive pricing?
When a business sets a price similar to competitors selling
similar/rival products
What is cost plus pricing?
A cost-based method for setting the prices of goods and
services and is calculated by adding a mark-up percentage to
the cost of the product
What is penetration pricing?
Setting a low price initially and accepting limited short-term
profits/losses in order to build market share before switching
to a more profitable and higher price
What is predatory pricing?
Setting a low-price forcing rivals out of the market. This is
illegal in the UK but difficult to prove
What are price comparison websites?
A website that compares the price of a particular product or
service in different stores or from different businesses
What is price skimming?
Setting a high price at the launch of a product, to gain the
money back from R&D and to take advantage of those
wanting to be the first people to purchase.
What is pricing strategy?
A method used by a business when deciding the price at
which a product is sold for
What is psychological pricing?
Tactics that are designed to appeal to a customer’s emotional
response to prices
What are channels of distribution?
Methods used by businesses to get their products from
manufacture to consumer. They can include intermediaries
such as wholesalers and retailers.
What is distribution?
Getting products to the right place for customers and at the
right time
What is distribution strategy?
A plan to get a product or service to the customer
What is a 4 stage distribution strategy?
Manufacturer/producer to wholesaler to retailer, then
consumer. Examples include groceries and confectionery
What is place? (5 P’s of marketing)
Where the product can be purchased and is also the process
of making a product or service available to the consumer
What is product? (5 P’s of marketing)
A tangible item offered for sale
What is a service?
The non-physical, intangible parts of our economy, as
opposed to goods, which we can touch
What is the Boston matrix?
A method used to analyse the product portfolio of a business
that contains stars, Cash cows, question marks and dogs
What is B2B?
When a business promotes the sale of products/services to
other businesses for use in their operations
What is B2C?
Where a company targets to sell its products to individual
customers
What is consumer loyalty?
A preference for a product or brand based on experience
and/or an emotional attachment, which inclines buyers to
repeat purchases and away from rivals
What is an extension strategy?
A plan that is aimed at preventing the decline stage of a
product/service’s sales in the medium-to-long term
What is portfolio analysis?
When business considers each of its products in the context
of its market position
What is product life cycle?
The stages that a product goes through from introduction to
decline
What is a product portfolio?
The collection/range/ list of items/products produced/sold/
offered by a business
What is collective bargaining?
Negotiation of wages/conditions of employment between
employee representatives / trade unions and the employer
What is dismissal?
Referred to informally as firing or sacking. It is the termination
of employment by an employer against the will of the
employee.
What is redundancy?
When a business needs to reduce the size of its workforce or
even close. Redundancy can be voluntary
What is staff as a cost?
A cost to businesses in terms of recruitment, training,
remuneration, welfare and even severance
What is staff as an asset?
Employers recognise the input of employees as an important
business resource. They contribute to the value of output, whether this is through providing added value to a product by
supporting the manufacturing process or through effective
customer service. Note that in accounting terms, staff are an
expense not an asset.
What are trade unions?
A workforce representative that act to protect and improve
the economic and working conditions for their members
What is external recruitment?
When the business looks to fill the vacancy from outside of
the business.
What is induction training?
Introductory training given to employees covering its
background, policies, health and safety procedures
What is internal recruitment?
Selecting employees who already work within the business to
fill job vacancies
What is off the job training?
When employees are given training away from their normal
job environment, often in a classroom
What is on the job training?
Learning/gaining/developing skills whilst at work doing the job
What is the chain of command?
The way authority and power is organised in an organisation
What is a centralised structure?
An organisational structure where business decisions are
made at the top of the hierarchy by senior management/or at
the headquarters of a business
What is a decentralised structure?
When a business allows branches to take more control/make
their own decisions. Allows branches to take more control/make their own
decisions
What is a flat organisational structure?
A structure with few layers and a wider span of control for
each manager
What is a hierarchy?
The order or levels of responsibility in an organisation, from
the lowest to the highest
What is a matrix organisational structure?
Organises employees from different disciplines or divisions
into projects/teams
What is a span of control?
The number of employees/subordinates that a manager is
responsible for
What is a tall organisational structure?
One with many layers and a narrow span of control for each
manager
What is a commission?
A payment to a worker based on a percentage of the value of
sales
What is consultation?
Employee opinions/feedback are sought when making
business decisions
What is delegation?
Authority to pass down from superior to subordinate
What is empowerment?
Giving official authority to employees to make decisions and
to control their own work activities
What are financial incentives?
Monetary rewards used to help improve staff motivation and
achievement. They can include Piecework, commission,
bonuses, profit sharing and performance related pay
What is a flexible workforce?
Employees have choice over how/when they work by
agreement with the company. E.g. zero hours contracts,
homeworking, part-time
What is flexible working?
Offering different working hours/location/pattern of working
that improve work-life balance/motivation for employees
What is job enlargement?
Giving an employee more work to do of a similar nature,
horizontally extending their work role
What is job enrichment?
Giving employees greater responsibility and recognition by
vertically extending their work role
What is job rotation?
The changing of jobs or tasks
What is Maslow’s hierarchy of needs?
The order of people’s needs, starting with basic human
needs
What is Mayo’s human relations theory?
Emphasises the importance of the ways in which people
interact and how they are treated. Motivation can improve
when employees feel more involved
What are non-financial methods of motivation?
Ways of encouraging employees without the use of monetary
rewards. Include consultation, empowerment, team working, flexible
working and job rotation
What are non-financial techniques?
Ways of encouraging employees without the use of monetary
rewards e.g Delegation, consultation, empowerment, team
working, flexible working, job enrichment, job rotation and job
enlargement
What is Profit sharing?
A form of financial incentive given to employees, where part
of the profit of the business is shared amongst the
employees.
What is Taylor’s scientific management?
Suggested a job could be broken down into constituent parts,
so that the most efficient way of working could be calculated.
He believed workers are motivated by money
What is team working?
Organising people into working groups that have a common
aim
What is an autocratic leadership?
A leadership style where the decision-making is best kept
with managers, who will direct subordinates with little
consultation
What is a democratic leadership?
A type of leadership style in which members of the group
take a participative role in the decision-making process.
Group members are encouraged to share ideas and
communication is two-ways
What is Laissez-faire?
A leadership style where employees are encouraged to make
their own decisions within certain limits
What is a paternalistic leader?
Leaders that are in control, but take the welfare of employees
into account when making decisions
What is an entrepreneur?
Someone who organises a business venture by combining
the other factors of production, namely land, labour and
capital. They task risks to set up a business in the hope of
profit/reward
What is Entrepreneurship?
The activity of setting up a business, taking on risks, normally
in the hope of making a profit
What is risk?
Something an entrepreneur can essentially plan for.
Probabilities of outcomes are known or at least understood or
considered.
What is an ethical stance?
In support of a moral belief
What is profit satisficing?
Making enough profit to satisfy the needs of the business
owner
What is a business objective?
A goal/target set by the business in the short/medium term to
help achieve its aim/mission
What is profit maximisation?
When the difference between sales revenue and cost is at its
greatest
What is sales maximisation?
An attempt to sell as much as possible in a given time period
(or to generate as much sales revenue as possible)
What is a social enterprise?
A business that has aims/objectives which benefits society
and is not for profit/its profits are reinvested into the
business/community
What is stock market fluctuation?
When a business sell shares publicly on the stock exchange
for the first time
What is opportunity cost?
The next best alternative forgone when making a decision
What is trade off?
A situation where having more of one thing leads to having
less of something else
