Key Terms P - S

Question 1

Price taker

Answer 1

A business that has no option but to charge the ruling market price

Question 2

Pricing decisions

Answer 2

The decisions taken about how to price a product

Question 3

Pricing strategies

Answer 3

The overall strategic approach to pricing over the medium to long term

Question 4

Pricing tactics

Answer 4

Short-term pricing decisions and approaches

Question 5

Product life cycle

Answer 5

A theory which predicts the stages a product goes through from introduction to withdrawal from a market

Question 6

Product portfolio

Answer 6

The collection of products and brands owned and operated by a firm

Question 7

Productivity

Answer 7

Measures of output per worker over a given time period

Question 8

Profitability

Answer 8

The ability of a business to generate profits from its activities. Usually measured on net profit margin or return on capital invested

Question 9

Promotional mix

Answer 9

The mix of activities and approaches taken to promoting a product, including advertising, direct selling etc.

Question 10

Psychological pricing

Answer 10

Using price as a way of influencing a consumer’s behaviour on perceptions

Question 11

Public relations (PR)

Answer 11

The promotion of a business through news stories, sponsorship and similar activities

Question 12

Quality

Answer 12

Where a product meets a customer requirements

Question 13

Quality assurance

Answer 13

Organising every process of production to get the product right the first time

Question 14

Quality control

Answer 14

The inspection of products as part of a sampling process to ensure that the right production standards have been achieved

Question 15

Rationalisation

Answer 15

Re-organising production in order to increase productivity and efficiency. Often involves closure or relocation or production capacity

Question 16

Robotics

Answer 16

The science and technology of robots and their design, manufacture and application

Question 17

Sale and leaseback

Answer 17

Involves a business selling a major asset and then leasing it back from the new owner

Question 18

Sales promotion

Answer 18

Point-of-sale material or other incentives designed to stimulate purchases

Question 19

Selection

Answer 19

The process of deciding which applicant for a job a business should accept

Question 20

Span of control

Answer 20

The number of employees who are directly supervised by a manager

Question 21

Spare capacity (excess capacity)

Answer 21

When a business is able to produce more with existing resources

Question 22

Stock control

Answer 22

The processes and controls employed by a business to ensure that it has sufficient stock for its purposes

Question 23

Price skimming

Answer 23

Pricing strategy where a higher price is charged for a new product to take advantage of customers prepared to pay for innovation