Milestone 2 key terms Flashcards
ways to add value?
celebrity endorsement
convenience
choice
quality
unique selling point
best technology(if suitable)
aesthetic/good design
restricted supply
brand name/branding
calculated risk
a chance of exposure to loss or injury is undertaken having carefully assessed the advantages and disadvantages of taking that risk
risks
financial loss
lack of security
business failure
rewards
business growth/profit
independence
business success
fame
asset and liability?
asset- money in pocket e.g. stock bond, things you own, royalties ,businesses that don’t require presence
liability- money out of pocket e.g. bills ,taxes ,credit card debt, loan
liabilities
limited: owners of companies have limited liability meaning they are not personally responsible for business debts
unlimited: owners of small businesses such as sole traders and partnerships are personally responsible for all the debts of the business
entrepreneur characteristics
good leader
decisive
creative
determined
resilient
persuasive
focussed
risk taker
able to use initiative
hard working
good communicator
factors of production
land includes all natural resources e.g. raw materials
labour is the supply of workers and their productivity
capital is the machinery, factories, shops and the goods that are made
enterprise-the entrepreneurs who supply the products and services. They invest their own financial capital (cash) and take risks in return for profit
customer needs
price
quality
choice- (power of 3, optimum number of options for sales is 3)
convenience
convenience
location: businesses need to be located where customers find it easy to access services being provided
availability: it refers to products being in stock when customers wish to purchase them or that services are able to be provided
payment options: to provide convenience for customers by offering a variety of payment options
delivery :cost, speed and reliability of the methods of transport offered to customers
primary or field research
new first hand information
for a specific purpose
not been collected before
secondary or desk research
pre-existing information
information already collected before for a different purpose
reasons for research
identify and understand customer needs and how they could be met
help businesses know if they’re doing the right thing
identify a gap in the market
reduces risk of failure
helps with decision making
benefits of social media
access a wide range of people
changes in customer trends are spotted quickly
market researchers can segment the market and target research effectively
contain analytical tools that can be used to interrogate data
big data
huge amounts of market research data
can be gathered through social data, cookies(online) ,loyalty cards
gathering primary research?
surveys, questionnaires ,interviews, focus groups, observations ,experiments
gathering secondary research?
Internal: previous sales records ,company accounts ,loyalty card information, customer data
external: competitors’ websites, newspapers, government statistics, reports, magazine surveys, social media, other firms research
quantitative data
expressed in numbers, can be easily statistically analysed using graphs etc, comes from closed questions
qualitative data
information about opinions, judgements and attitudes
more detail about why when and how
not easy to record or analyse statistically
comes from open questions
primary research pros and cons?
PROS: can be highly focussed and relevant, up-to-date
CONS: can be expensive to collect analyse and evaluate ,care needs to be taken to ensure accuracy and avoid bias, takes time to do and analyse
secondary research pros and cons?
PROS: wide range available, some of these are cheap/free
CONS: some are very expensive to buy, not always relevant or recent
impact of unreliable data
can lead to bad decisions that may waste money and time
brand image can suffer
competitors gain an advantage
failure to meet the needs of customers with your product or service
missing gaps/opportunities in the market
poor decisions made with potentially disastrous consequences
disadvantages of market research
information only as good as methodology used
can be inaccurate or unreliable or biased
results may not be what the business wants to hear
may stifle initiative or gut feeling
what customers want may be out of your businesses’ capacity
mass market product
meets neds of a wide range of customers across various segments
niche product or service
one that targets a specific of a large industry and market
market segmentation
division of a market into smaller groups of consumers that share common needs and wants
target market
a particular group of consumers that a product or service is aimed at
segmentation by location
market is divided by features of geographical location
population density may be another feature ( number of people per square km)
segmentation by region
identify and target consumers tastes and preferences that are unique ,or more prevalent in a particular area
segmentation by demographics
by lifestyle?
market segmentation according to age, race, religion, gender, family size, ethnicity, income, and education
life style segmentation groups consumers by their activities, interests and opinions
mission statement
what a business is trying to achieve
set values that enable employees to understand the basis for a business’ actions
aim
a long term goal
objectives
what do the need to be ?
something that states the plan of action needed to achieve the aims set by a business
S- Specific
M-Measurable
A-Attainable
R-Reliable
T-Time based
Financial aims
survival, profit, sales, increased market share, financial security
non-financial aims
social objectives(help others), personal satisfaction, challenge ,independence, control, power
why aims and objectives differ
size of organisation, primary/secondary/tertiary sector, money available, reason for setting up, type of organisation, different sector
revenue equation
number of sales X price per Unit
total costs equation
fixed costs + variable costs
variable costs?
Quantity x cost per unit
equation for breakeven point
Fixed cost/ (selling price per unit)- (variable costs per unit)
