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Business Studies Theme 1 - People > Random Mix > Flashcards

Random Mix Flashcards

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People You Should Know flashcards
1
Q

What is a niche market:

A

A strategy where a business targets a specific segment of a mass market

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2
Q

What are niche products?

A
  • unique
  • distinct
  • tailored
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3
Q

What is a mass market?

A

Targeting an entire market with a standardised product

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4
Q

What are two characteristics of a mass market?

A
  1. Low operational costs

2. Long lasting wide appeal - spans age groups and gender (don’t need to segment)

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5
Q

What are two characteristics of a niche market:

A
  1. Have higher units costs

2. Products designed to fulfil needs closely of specific segments

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6
Q

What pricing methods are used for a niche market?

A
  1. Charge premium pricing
  2. Price skimming
  3. Loyal, repeat purchasing
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7
Q

What is a negative of niche marketing:

A

There is a greater chance of failure- risk if the demand changes as there is a smaller target market

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8
Q

What are two negatives of mass marketing:

A
  1. Lots of competitors

2. Rely on volume - homogenous

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9
Q

What is a market size?

A

Measure of the total number of businesses operating in one market

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10
Q

What is volume?

A

The quantity of good/ services sold

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11
Q

What is value?

A

The worth (revenue) of a business

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12
Q

If given value, to find volume, what do you do?

A

X selling price per unit

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13
Q

What is growth?

A

How much a market has changed over time

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14
Q

What is a calculation to measure growth?

A

(Change in sales/ original sales) x100

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15
Q

What is a market share?

A

A measure of the proportion of sales one business has related to the total market size

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16
Q

What is the calculation for market share?

A

(One businesses sales)/ market size) x100

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17
Q

What is a dynamic market:

A

A market susceptible to rapid change

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18
Q

What are the causes of a dynamic market? (3)

A
  1. Changing tastes/ trends
  2. Competitive threat (new entrants who have a disruptive impact)
  3. Technological change (increased rate of obsolescence)
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19
Q

Pros of online retailing? (2)

A
  1. Reduced overheads

2. Reach a wider audience

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20
Q

What are three types of businesses?

A
  1. Multi channel (both online/ actual stores)
  2. Pureplay (just online)
  3. Bricks and mortar
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21
Q

What is the definition of demand?

A

The number of consumers willing and able to purchase a good/ service at a given price

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22
Q

What happens to the demand as the price rises?

A

The demand falls.

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23
Q

What is price and what is it the only thing to do?

A

It is the only variable that causes movement ALONG the line

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24
Q

What are determinants of demand? (6)

A
  1. Tastes
  2. Advertising/ branding
  3. Income
  4. Population
  5. Substitutes
  6. Complementary goods
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25
Q

What are the determinants of supply? (5)

A
  1. The impact of changing costs of production
  2. Technological progress
  3. Prices of other goods and services
  4. Government policy (e.g. Taxes and subsidies)
  5. Other factors (e.g. Expectations)
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26
Q

What is the definition of price elasticity?

A

How sensitive demand is to changes in price

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27
Q

How to calculate price elasticity?

A

PED= % change in quantity demanded/ % change in price

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28
Q

What is PED if = 1

A

Unitary

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29
Q

What is PED if > 1

A

It’s elastic, leads to a large change in demand

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30
Q

What is PED if < 1?

A

It is price inelastic. There is a smaller change in demand

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31
Q

Income elasticity definition:

A

How sensitive demand is to changes in real income

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32
Q

How to calculate YED:

A

= % change in quantity demanded/ % change in real income

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33
Q

If the YED is > 1, what is the product?

A

Income elastic

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34
Q

If the YED is < 1, then what is the product?

A

Income inelastic

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35
Q

If the result of a YED is -ve, what is the good?

A

An inferior good

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36
Q

If the result of YED is positive, what is the good?

A

A normal good ( as incomes rise the demand rises)

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37
Q

What are the two positive normal goods?

A
  • +0 to 1 it’s a necessity good

+> 1 it’s a luxury good

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38
Q

What is the definition for added value?

A

The process of ensuring consumers think a product is worth more

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39
Q

What is the calculation for added value:

A

Sppu - costs of production

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40
Q

What are 4 ways to add value to a product?

A
  1. Branding
  2. Unique selling point
  3. Adding value to raw materials
  4. Persuasive advertising
  5. Convenience
  6. Customer service
  7. Product design/ packaging
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41
Q

What is added value?

A

Is making the product perceived by the consumer to be worth more

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42
Q

Added value calculation?

A

Selling price per unit- cost of production

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43
Q

What is branding?

A

Giving a product/ service distinctiveness

44
Q

What pricing strategy do big brands do?

A

They use premium pricing

45
Q

What is market research?

A

Process of investigating the needs/ wants of customers of activities of competitors in order to inform marketing strategy.

46
Q

What is primary research? Give 5 examples

A

First hand data gathered for specific purpose. E.g. Interviews, focus group, observations, test marketing, consumer panels, loyalty cards, surveys

47
Q

What is quantitative research?

A

Statistically valid data

48
Q

What is qualitative research?

A

In depth research about the motivations behind consumer buying behaviour

49
Q

Give some examples of secondary research, and what is it?

A

Data that already exists. For example, previous sales records, government statistics and data, competitors data, trade press, market intelligence reports

50
Q

What are the types of products? (4)

A
  1. Own brand
  2. Brand
  3. Product portfolio
  4. Product range
51
Q

Why can a brand charge more?

A

The named product seems distinct

52
Q

What is an own product?

A

A product manufactured and sold under a retailers name

53
Q

What is the definition of a product portfolio?

A

The number of different goods/ services sold

54
Q

What is a product range?

A

Products sold under the same brand name

55
Q

What is the design mix?

A

The elements that influence a product, for example function, aesthetics, economic manufacture

56
Q

What is economic manufacture?

A

Design must consider whether it can be sold profitability and how much value can be added

57
Q

What are 6 pricing strategies?

A
  1. Cost- plus pricing
  2. Competitive pricing
  3. Penetration pricing
  4. Price skimming
  5. Psychological pricing
  6. Predatory pricing
58
Q

What two pricing strategies do new businesses use?

A

Price skimming

Price penetration

59
Q

What three pricing strategies can an established business use?

A
  • competitive pricing
  • predatory pricing
  • psychological pricing
60
Q

What is a loss leader?

A

Charge low on a product which they make a loss on, but rely on other products

61
Q

Cost plus pricing definition:

A

Costs of production and % mark up to form price

62
Q

What is the definition of a marketing strategy?

A

A medium to long action plan (4ps) in order to achieve marketing objectives

63
Q

What is B2B?

A

One business selling to another - trade customers

64
Q

What are the four features of a marketing mix?

A
  1. Product
  2. Price
  3. Promotion
  4. Place
65
Q

How do the 4 marketing mix change when the trade is business to business?

A

Product - function, durability, economic manufacture
Price - competitive (low as possible)
Place - 0 stage (e-commerce, telesales, mail order) wholesalers/ agents
Promotion - informed. Above: trade press, internet. Below: direct mail, personal selling, trade fair/ exhibition

66
Q

What is a product lifecycle?

A

Model maps sales over time for a product

67
Q

What are the six stages of a product lifecycle?

A
  1. R&D
  2. Introduction
  3. Growth
  4. Maturity
  5. Decline
  6. Extension strategy
68
Q

What are 5 ways of extending a product life?

A
  1. Discounts
  2. Modify product
  3. Appeal to new target market
  4. Change advertising campaign
  5. Bring out complementary product
  6. Change the name
  7. New slogan
69
Q

What are two ways of analysis get what you sell?

A
  1. Product portfolio

2. Boston matrix

70
Q

What is the definition of a mission statement?

A

A qualitative statement that sums up why the organisation exists and their values

71
Q

What is the benefit of a mission statement? (3)

A
  1. Distinguish business
  2. Communicate culture to staff
  3. Convey to customers
72
Q

What is the definition of an aim?

A

A goal a business tries to achieve

73
Q

What is the definition of an objective?

A

Targets to achieve aims - smart

74
Q

What are corporate objectives?

A

Objectives for the whole business

75
Q

What are 8 common business objectives:

A
  1. Survival
  2. Profit maximisation
  3. Sales maximisation
  4. Market share
  5. Cost efficiency
  6. Employee welfare
  7. Customer satisfaction
  8. Social objectives
76
Q

Why is survival a business objective?

A

All businesses need to be sustainable long term, especially new businesses. This is measured by breakeven, and cash flow

77
Q

What is profit satisficing? *

A

Generating just enough profit to function/ exist

78
Q

Why is profit maximisation a business objective?

A

It helps achieve growth, invest and attract shareholders to invest. It is measured by net profit/ net profit (most accurate)

79
Q

Why is sales maximisation a business objective?

A

Generate reputation and grow. If they grow too quickly, they have cash flow problems, and this is called overtrading. It is measured by % units sold, market share increasing

80
Q

What is sales maximisation?

A

Generating as many sales units/ volume as possible

81
Q

Why is a market share a business objective?

A

To gain a competitive advantage. They can then influence prices (price maker) and demand and supplier. The PED is inelastic

82
Q

Why is cost efficiency a common business objective? And how do they achieve it?

A

It impacts profitability (economies of scale, to reduce waste (lean production), use more technology (becoming more capital intensive), maximise capacity utilisation, motivate staff, delayering and training

83
Q

Why is employee welfare a common business objectives?

A

Reduce staff turnover, easier to recruit and increase motivation

84
Q

Why is customer satisfaction a business objective?

A

Achieve loyalty, increasing repeat purchase, competitive markets

85
Q

Why is social objectives a common objective?

A

Give you a usp, increase branding, consumers like it/demand it

86
Q

Why do businesses have objective? (5)

A
  1. To have a target
  2. To motivate staff
  3. To give a business direction
  4. To measure business performance
  5. Interest shareholders
87
Q

What factors influence objectives? (6)

A
  1. Competitors actions
  2. Changing tastes and trends
  3. Changes in business cycle/ economy
  4. Stage of business cycle - startup, growth etc and size
  5. External factors/ shocks
  6. Financial constraints
88
Q

What are 8 types of legal structures:

A
  1. Sole trader
  2. Partnership
  3. Ltd
  4. Plc (flotation)
  5. Franchising
  6. Social enterprise
  7. Lifestyle business
  8. Online
89
Q

Definition of motivation:

A

The will/ desire to work due to enjoyment of the work itself

90
Q

What are 3 benefits of motivation:

A
  1. Ensure good customer service
  2. Increase productivity
  3. Reduce staff turnover
  4. Reduce absenteeism
91
Q

Taylor - describe theorist:

A

T for Taylor and traditional. His theory is scientific management, an autocratic leader. He used financial incentives, with piece rate. He believed the one best way to motivate way money. He also believed in the division of labour and efficiency.

92
Q

Maslow - describe theorist:

A

His theory was the hierarchy of needs. The bottom of the triangle are the factors which motivate staff, and as you go up, the bottom are the first things that motivate you.

93
Q

What are the five stages for Maslows theory:

A
  1. (Bottom) Physiological needs - pay and basic needs
  2. Safety - job security. Lower order needs
  3. Belonging ——————————————–
  4. Self esteem. Higher order needs
  5. (Top) self actualisation
94
Q

What is the name of Herzebergs theory:

A

Hygiene factors and motivators. Hygiene factors (absence of them will demotivate) - pay/ conditions. Motivators are aspects which encourage people to work harder - recognition/ training/ management style

95
Q

What is the name of Mayos theory?

A

Human relations approach. The Hawthorne effect was an experiment - changed rest breaks, changed lighting and the social interaction with each other and the manager

96
Q

What are some methods for selecting people for a job?

A
  1. An assessment centre
  2. Presentations
  3. Interviews
97
Q

Benefits of seeing staff as an asset: (Herzeberg/ Mayo)

A
  1. More motivated - know they are valued

2. For the business there is lower staff turnover

98
Q

Cons of seeing staff as an asset:

A
  1. Costly way for the business - requires investment

2. Time consuming/ slows decision making when making decisions and consulting employees.

99
Q

What are benefits of seeing staff as a cost: (Taylor)

A
  1. Profitability improves

2. Authority is located at top of hierarchy - centralised structure

100
Q

What are cons of seeing the staff as a cost?

A
  1. Demotivated - PRP
  2. Increase cost - more absenteeism as not happy employees
  3. Quality decreased
101
Q

What is the definition of flexible working?

A

Providing employees with a choice over working hours, time, location

102
Q

What are 5 different examples of flexible working?

A
  1. Homeworking
  2. Flexi-time
  3. Temporary contracts
  4. 0 hour contracts
  5. Outsourcing
  6. Term time only
  7. Multiskilled
103
Q

What is a pro for the business having flexible working:

A
  1. Staff should be motivated - choice work - life balance

2. Larger pool of skilled staff - choose staff when peak demand

104
Q

What is a pro for an employee having flexible working:

A
  1. Can work around their home life
105
Q

What is a con for a business having flexible working:

A
  1. Harder to coordinate staff - both working hard and also not moving away from objectives of the business
  2. May not be as committed or loyal - harder to motivate them - not there all the time - harder to communicate
106
Q

What is a con for an employee working flexible working:

A
  1. May want to work longer but given part time contract

2. May not always know what is going on - not always there for meetings

Business Studies Theme 1 - People (6 decks)

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