Key Terms Flashcards
What is a brand?
A symbol, logo, or design that is recognizable and distinguishes a product from competitors. It can also be a unique design/sign/symbol/words/logo.
Define competition in a business context.
The rivalry among sellers trying to achieve goals such as increasing profits, market share, and sales volume.
What is a competitive market?
A market where there are many rivals selling similar products.
What is a direct competitor?
Businesses that produce similar products that appeal to the same group of customers.
Explain a dynamic market.
A market that is subject to rapid or continuous change.
What is indirect competition?
When 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.
Define innovation.
The creation, development, and implementation of a new product, process, or service.
What is a market?
Where buyers and sellers interact.
What is market growth?
An increase in demand or sales for a particular product or service.
What is market share?
The percentage of the total market a business has in terms of volume or value.
What is market size?
The total amount of sales or customers in a market measured by value or volume.
Define 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, a smaller segment of a larger market where consumers have specific needs and wants.
What is online retailing?
Selling goods and services on the internet.
What is product innovation?
The development or creation of products not previously available.
What is sales volume?
The quantity of a good or service sold within a period of time.
What is uncertainty in business?
The inability to predict, a lack of knowledge about future events and outcomes.
What are biased questions in market research?
Questions that do not produce findings that give a true reflection of the views of the target audience on the product or service.
What is consumer behavior?
How consumers make decisions about how they choose and use products or services.
What are databases?
An organized collection of data stored electronically with instant access, searching, and sorting facilities.
What is a face-to-face survey?
A research method where the interviewer communicates directly with the respondent using a questionnaire.
What is a focus group?
A group of people who participate in a discussion as part of market research to give feedback about a product or service.
What is government data?
Government publications, such as the census, that a business can use.
What is interview bias?
When the opinion of the interviewer interferes with the judgments of the interviewee.
What is market orientation?
When a business’s products or services are based around the needs and wants of the customer.
What are market reports?
A document that contains information, stats, research, and facts on a chosen field.
What is market research?
Gathering, presenting, and analyzing information about products or customers.
What is market segmentation?
Dividing a whole market into particular customer groups that have similar characteristics.
What are market segments?
An identifiable group of individuals/a part of the market where consumers share one or more characteristic or need.
What are observations in market research?
Where market researchers watch the behavior of customers.
What is primary market research?
Obtaining data first-hand by the business to match the specific needs of the business, also known as field research.
What is product orientation?
When a business prioritizes a product’s design quality or performance rather than meeting customer preferences.
What is qualitative research?
Market research collected relating to the opinions and beliefs of consumers.
What is quantitative research data?
Numerical information gathered and can be presented and analyzed using graphs, charts, tables, etc.
What is respondent bias?
When respondents respond inaccurately to a question for some reason.
What is a sample in market research?
A small group of people who must represent a proportion of a total market.
What is secondary market research?
Data collected by another business or organization but used by the business in question, also known as desk research.
Define segmentation.
Dividing the market into groups of people with similar attributes or common characteristics.
What is social networking?
A platform such as Facebook, X, and YouTube, which can be used to market a businesses’ products or services.
What is a survey?
A method of primary research used to collect information.
What is test marketing?
Trialling the product in a small area or to a limited number of users to assess the suitability of a product.
What are trade publications?
Specialist magazines that look at current trends in the business world.
What is added value?
The increase in value that a business creates when producing a product or service.
What is a competitive advantage?
A feature of a business and/or its products that enable it to compete effectively with rival producers or products.
What is differentiation?
Making products or services different or distinct from competing products.
What is market mapping?
A form of market positioning using a 2-dimensional diagram that plots products or services in a market.
What is market positioning?
An effort to influence consumer perception of a brand or product, relative to the perception of competing brands.
What is product differentiation?
The act of distinguishing a product or service from competitors.
What are complementary goods?
Products consumed or used together, so they are purchased together.
What is consumer income?
The money earned or received from work or investments.
Define demand.
The quantity of goods or services that a consumer is willing to buy at a given price.
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 according to seasonal factors.
What are substitutes?
Goods that can be bought as an alternative to others, but perform the same function.
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.
Define supply.
The amount that producers are willing or able to produce at a given price.
What is equilibrium price?
The price where supply and demand are equal.
What are non-price factors?
Factors other than price, e.g., change in consumer incomes, advertising, and seasonality.
What is a shortage in a market?
When demand exceeds supply.
What is a surplus in a market?
When supply exceeds demand.
What are luxury goods?
Goods that consumers like to buy if they can afford them.
What are necessities?
Basic goods that consumers need to buy.
What does it mean for demand to be 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.
What does it mean for demand to be 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.
What is an inferior good?
When incomes increase, there is a decrease in quantity demanded.
What is the marketing mix?
A plan for using the right blend of product, price, promotion, and place to maximize sales.
What are social trends?
Changing patterns in consumer behavior reflected in changing demands.
What is the aesthetic of a product?
Relates to the appearance of a product.
What is the cost element of the design mix?
When the business focuses on being economically viable and minimizes costs.
What does ‘design for recycling’ mean?
Producing products using materials that have been discarded as waste and recycled.
What does ‘design for reuse’ mean?
When a product is designed to allow for disassembly at the end of its life.
What does ‘design for waste minimization’ mean?
Reducing the quantity of resources that are discarded in the production process.
What is the design mix?
The combination of factors needed in designing a product, including aesthetics, function, and economic manufacture.
What is ethical sourcing?
When a business buys materials that are produced with fair working conditions.
What is the function of a product in the design mix?
Relates to the quality and reliability of a product.
What is rebranding?
A marketing strategy in which a new name, term, symbol, design, or combination is created for an established brand.
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.
What is customer loyalty?
Customers favoring a business over competitors when making a purchase.
What are digital communications?
The electronic transfer of data.
What is direct marketing?
Where a business mails out leaflets or letters to households.
What is emotional branding?
The creation of brands that may appeal to customers’ emotional nature.
What is manufacture/corporate branding?
Brands created by the producers of goods and services, bearing the producer’s name.
What is an own brand?
Products that are manufactured for wholesalers or retailers by other businesses.
What is personal selling?
Direct communication between a salesperson and the customer.
What is premium pricing?
Charging a higher price than competitors due to customer loyalty.
What is product/generic branding?
Products that only contain the name of the product category rather than the company name.
What is promotion?
The way a business creates demand or awareness for its product or service.
What is public relations?
An organization’s attempt to communicate with interested parties.
What are sales promotions?
Methods of promoting products in the short term to boost sales.
What is social media?
Websites and applications that enable users to participate in social networking.
What is sponsorship?
A company giving a product or money to support another business or person.
What is a USP (Unique Selling Point)?
A feature that differentiates a product from its competitors.
What is viral marketing?
Encouraging customers to share information or adverts through existing social media platforms.
What is competitive pricing?
When a business sets a price similar to competitors selling similar products.
What is cost-plus pricing?
A cost-based method for setting the prices of goods and services.
What is penetration pricing?
Setting a low price initially to build market share before switching to a higher price.
What is predatory pricing?
Setting a low price forcing rivals out of the market.
What are price comparison websites?
A website that compares the price of a particular product or service in different stores.
What is price skimming?
Setting a high price at the launch of a product to gain back R&D costs.
What is a pricing strategy?
A method used by a business when deciding the price at which a product is sold.
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.
Define distribution.
Getting products to the right place for customers and at the right time.
What are distribution channels?
The methods by which a product gets from the manufacturer to the consumer.
What is a distribution strategy?
A plan to get a product or service to the customer.
What is a four-stage distribution channel?
Manufacturer/producer to wholesaler to retailer, then consumer.
What is online distribution/e-commerce?
The use of electronic systems to sell goods and services.
What is ‘place’ in the marketing mix?
Where the product can be purchased and the process of making it available to the consumer.
What is a four-stage distribution channel?
Manufacturer/producer to wholesaler to retailer, then consumer, examples include groceries and confectionery.
What is ‘place’ in the marketing mix?
Where the product can be purchased and the process of making a product or service available to the consumer.
What is a product?
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 a three-stage distribution channel?
Manufacturer/producer to retailer, then consumer, examples include electrical goods and cars.
What is a two-stage distribution channel?
A direct marketing approach with no intermediary levels, e.g., manufacturer/producer to consumer.
What is the Boston matrix?
A method used to analyze the product portfolio of a business that contains stars, cash cows, question marks, and dogs.
What does B2B (business-to-business) mean?
When a business promotes the sale of products or services to other businesses for use in their operations.
What does B2C (business-to-customer) mean?
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 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 or service’s sales in the medium-to-long term.
What is a marketing objective?
A goal the business aims to achieve through its marketing activities.
What is a marketing strategy?
The methods used/plan/way chosen to achieve marketing objectives.
What is portfolio analysis?
When a business considers each of its products in the context of its market position.
What is the 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 or trade unions and the employer.
What is dismissal?
The termination of employment by an employer against the will of the employee.
What are employer/employee relations?
The way in which a company’s management and its employees behave toward each other.
What is an individual approach in employer/employee relations?
When employers develop relationships with employees at an individual level.
What is multiskilling?
The process of increasing the skills of employees.
What are part-time employees?
Workers that generally work a few hours or a few days a week, fewer hours than a full-time employee.
What is redundancy?
When a business needs to reduce the size of its workforce or even close, and it can be voluntary.
How is staff viewed as a cost to businesses?
In terms of recruitment, training, remuneration, welfare, and even severance.
How is staff viewed as an asset to businesses?
Employers recognize the input of employees as an important business resource, contributing to the value of output.
What is temporary work?
A job position that is generally for a limited period of time.
What are trade unions?
A workforce representative that acts 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, and 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 or gaining skills while at work doing the job.
What is recruitment?
The process of finding and selecting workers.
Define training.
The developing of a person to enhance skills and knowledge, and can be on-the-job or off-the-job.
What is a centralized structure?
An organizational structure where business decisions are made at the top of the hierarchy by senior management or at the headquarters of a business.
What is the chain of command?
The way authority and power are organized in an organization.
What is a decentralized structure?
When a business allows branches to take more control or make their own decisions.
What is a flat organizational 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 organization, from the lowest to the highest.
What is a matrix organizational structure?
Organizes employees from different disciplines or divisions into projects or teams.
What is an organization structure?
A diagram that shows who is answerable to whom in an organization, it can also show vertical and horizontal communication links.
What is the span of control?
The number of employees/subordinates that a manager is responsible for.
What is a tall organizational structure?
One with many layers and a narrow span of control for each manager.
What is a bonus?
A sum of money added to an employee’s wages or salary as a reward for performance when they reach or exceed their targets.
What is commission?
A payment to a worker based on a percentage of the value of sales.
What is consultation?
Employee opinions or 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 and 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?
Emphasizes the importance of the ways in which people interact and how they are treated, motivation can improve when employees feel more involved.
What is motivation?
The reason for people’s actions, willingness, and goals.
What are non-financial methods of motivation?
Non-monetary rewards such as 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 performance-related pay?
A financial reward to employees whose work is considered to have reached a required standard.
What is piece rate?
A payment system where employees are paid an agreed rate for every item produced.
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, and believed workers are motivated by money.
What is team working?
Organizing people into working groups that have a common aim.
What are working conditions?
The physical surroundings and the atmosphere of the workplace, and the way staff are treated by managers.
What is autocratic leadership?
A leadership style where the decision-making is best kept with managers, who will direct subordinates with little consultation.
What is democratic leadership?
A 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-way.
What is laissez-faire leadership?
A leadership style where employees are encouraged to make their own decisions within certain limits.
Define leadership.
Having a vision, sharing that vision with others, and providing direction.
Define management.
The day-to-day organization of the business, including staffing.
What are paternalistic leaders?
Leaders that are in control but take the welfare of employees into account when making decisions.
What is an entrepreneur?
Someone who organizes a business venture by combining the other factors of production, namely land, labor, and capital, and they take risks to set up a business in the hope of profit or reward.
Define entrepreneurship.
The activity of setting up a business, taking on risks, normally in the hope of making a profit.
What is resilience in business?
The ability to recover from difficulties and try again.
Define risk in a business context.
Something an entrepreneur can essentially plan for. Probabilities of outcomes are known or at least understood or considered.
What are entrepreneurial characteristics?
Qualities or traits demonstrated by an individual starting up and running a business.
What is an entrepreneurial motive?
Factors that drive a person to start a business.
What is an ethical stance?
In support of a moral belief.
What is home working?
Setting up a business from home.
What is independence in business?
A desire to be one’s own boss.
What is profit satisficing?
Making enough profit to satisfy the needs of the business owner.
What is social entrepreneurship?
Setting up a business and showing concern for social issues.
What is a business objective?
A goal or target set by the business in the short or medium term to help achieve its aim or mission.
What is cost efficiency?
Minimizing costs or expenses or waste when producing a product or service.
What is customer satisfaction?
A measurement of how satisfied a customer is with their purchase.
What is employee welfare?
Facilities and benefits provided by a business to meet the well-being of the employee.
What is an objective in business?
A goal or target set by the business to help achieve its aim or mission.
What is profit maximization?
When the difference between sales revenue and cost is at its greatest.
What is sales maximization?
An attempt to sell as much as possible in a given time period or to generate as much sales revenue as possible.
What are social objectives?
A goal to benefit or improve the community.
What is survival as a business objective?
A short-term business objective that aims to keep the business running.
What is a franchise?
A business buys the right to trade using the brand/logo/business model of an existing firm in return for a fee/royalty.
What is franchising?
A type of business where a business operator (franchisor) allows others (franchisee) to trade under its name (for a fee).
What is a lifestyle business?
A business set up with the aim of making no more than a set level of income from which to enjoy a particular lifestyle.
What is a partnership?
A type of business ownership or organization owned by two or more people.
What is a private limited company?
A small to medium-sized business, usually run by the family that owns it, shares are sold to friends, family, and business associates, and it has limited liability.
What is a public limited company?
A business with limited liability whose shares are publicly traded on the stock market, owned by shareholders.
What is a social enterprise?
A business that has aims or objectives which benefits society and is not for profit, its profits are reinvested into the business or community.
What is a sole trader?
A business that is owned by one person who has unlimited liability.
What is a stock market flotation?
When a business sells 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 a trade-off?
A situation where having more of one thing leads to having less of something else.
Define leader.
A person who inspires and motivates others to meet objectives.
What are economic variables?
Features of an economy that have effects on business and consumers, e.g., unemployment, inflation, and exchange rates.
What is internal finance?
The raising of capital or cash from within or inside the business, e.g., business or owner’s capital.
