Section 2 Flashcards
Production
process of using materials and transferring them into products
factors of production
land - includes natural resources
labour - physically and mentally
capital- needed to provide goods and services
fixed capital
long term , used multiple times in production
working capital
used in the everyday running of the business
enterprise
skill of organizing all the factors together
industries of natural resources
bauxite- Jamaica
clay/limestone - Barbados
gold/ diamond - Guyana
Oil and gas- Trinidad and Tobago
Asphalt - Trinidad
How to improve productivity
use modern equipment , organise work efficiently, motivate yourself, improve working conditions
importance of productivity
the more county becomes more competitive and produces more , income will rise due to exports sales
improving the labour supply
the number of hours the labour force is expected to work makes thek work smarter
human resources development
create appraisal, system , development helps to make workers more productive
ways to improve quality of hr
training to workers . health insurance and safety training , improve working conditions
use of capital in production
fixed capital- machinery and equipment
working capital - cash, stock of goods, raw materials
types of production
primary - extraction of raw materials from the earth
secondary- converting raw materials into products
territory - involves service and retail
process in production
job- make one product at a time
batch - makes batches at a time of a product
flow- products are passed down a production line
Marketing
any situation that brings seller and buyers together
types of markets
consumer - sells to customers
industrial- sale between businesses
niche- smaller part of a bigger market
trends in marketing
social media - gaining attention through social media
integrated - helps find out about customer requirements
marketing activities
marketing research- find out what customers want and how to produce
types of research - qualitative and collecting data
packaging - outer wrapping of good
branding - give your product a unique name
sale promotion - short term measures to persuade people to buy the product
pricing
cost plus - unit cost +variable cost + mark up
market oriental - survey what customers are willing to pay
promotional - introducing offers
market shimming - at the beginning high price is charged to get a high profit margin
phycology - seller keeps price below a certain price so it seems cheaper
packaging advantage
loos presentable , protects item ,easier to transport
branding importance
to distinguish product , helps promote product , identifies company
sales promotion
short term measures to increase sales
advertising
billboards , online websites , flyers , ads on tv or radio
purpose of advertising
to persuade , to inform , highlight features , educate persons
distribution
getting goods from manufacturer to customer
consumer decisions
save or spend money ?
which goods to buy?
when to buy?
influenced by affordability , quality and brand loyalty
Marketing mix
product , promotion, price and place
logistics
management of complex operations
supply chain
all networks that links in getting a product from the producer to the final customer
chain of distribution
manufacturer ->whole sale-> retailer -> customer
mode of transport importance
workers to travel to and from work , raw materials , finished products
influence of type of transport
nature of good , how urgent the delivery is, cost of transportation , the size and weight of good
multimodal transport
transport of goods under 1 contract
intermodal transport
transportation of intermodal container
Air transport
advantages - fastest form, reduced risk of damaged goods , packaging cost reduced , effective for long distance
disadvantages - cost high to operate , weight of good limited , not good for short distance, affected by bad weather
rail transport
advantages - faster than road travel , suitable for ISO containers , less pollution, fuel is more economical
disadvantages - routers are determined , equipment is costly , not suitable for perishable goods
road transport
advantages - most flexible , fast over short distance , speedy delivery
disadvantages - operation is expensive , prone to accidents , causes pollution
Sea transport
advantages -large ships can be propelled with small amount of power , aids in international trade, accidents are rare
disadvantages- can carry cargo only as far as ports , slow , affected by climate change
Pipeline
advantages - environmentally friendly , no need organize cargo
disadvantages - limited to liquid products , can have leaks causing environmental damage
transport documents
import license- permit giving permission to import certain goods
bill of landing - document that provides the shipper with all info needed to make delivery properly
airway bill- document for when goods are traded using air transport
export license - needed before certain goods are exported
roles of transport in marketing
ensure security of supply , to reduce cost
supply chain advantages
improved quality of life , economic growth , increase opportunities of employment
telesales
selling goods to customers via telephone
telemarketing
generates interest of potential customers by creating leads
e- trading
selling of retail goods online
supply chain challenges
globalisation - expansion of market thereby increasing complexity and business management cant cope the competition , counterfeiting of product which reduces scope and scale and changes in market conditions which may be hard for small businesses
importants of logistics
can improve the competition between businesses , provide competitive advantages who are more favourable than others , comparative cost advantage where business can produce more at lower cost , outsourcing accessing goods from an outside supplier via contract
types of outsourcing
1st P- firm that owns logistics
2nd P- provide assets to 1st P
3rd P - perform logistics on behalf of other companies
4th P - coordinates 3rd P
Benefits of outsourcing
free up cash flow , save cost
distribution problems
delayed shipment, spoilage or damage too goods, misdirection , inadequate storage , lack of security , ineffective communication
reducing distribution problems
gov intervention , creating a communication networks , taking out insurance , security mode of distribution
information tech and logistics and supply
Gps , Gis , portnet , logistics hub
Financial institution
Central bank , commercial bank
central bank
leading bank in country, issues notes and coins , bank of the government , manages national debt
commercial bank
accepts deposits , provides services such as safety , spending control , loans and overdrafts
types of bank acc
savings - money is paid into the bank and withdrawn in cash ‘
chequing - paying in book of credit slips to pay money into the acc and a cheque book to enable holder to make payments
non bank financial institutions
credit unions , insurance companies , building societies , micro lending organisations , gov agencies
functions and services of financial institutions
loans and credit facilities - loans is a type of credit created by the advance of a specified sum of money by the bank to be repaid with added interest
overdrafts - ability for someone to spend more than is in their bank acc
saving and deposits- savings is the amount of dispensable income not spent on consumer goods and have been accumulated and placed to earn interest .
night safe facilities , online banking , trustee work , remittance services , settlement services , deposits boxes
investments
putting money into some form of asset to make a gain
types of investments
stock , investment trust , bonds
regulatory bodies
these monitor the activities of financial institutions to ensure they operate fairly to the public eg. central bank regulates all banking in the country , by changing minimum requirements and regulating credit unions and insurance companies
budget
outlines on how much of an individuals income is to be spent on his various expenses
financial advising
provides financial advice or guidance to customers for compensation such as investments , management , income tax prep
short term financing
accessed through the money market eg. commercial banks , merchant banks and credit unions
sources include - secured loans , loans from family , personal sources such as savings
long term financing
accessed through building societies , stock exchange and development banks
sources- shares , debentures , secured loans , mortgage
Responsibilities of the government in an economy
Security of the state - The country must be protected from outside countries by the army and the coastguard etc.
Protection of general welfare of citizens - This is the duty of any government to create and enforce laws which will be beneficial to society. Welfare of citizens include education, health services, proper road networks etc.
Job security and severance benefits to workers - Government can help to make sure that the jobs of citizens are protected by having legalization to which government workers can be appointed to the civil service. Throughout the Caribbean workers and employers are required to pay national insurance which is to ensure that in the event of sickness or injury a worker would still receive some payment.
Protection of the environment - Acts of parliament which would make certain acts such as dumping and other offensive practices illegal and fines and other sanctions attached to it to prevent pollution, zoning of certain areas such as national parks and reserves to protect plants and animals that are considered endangered and keep track of the conditions of the environment in the land air and sea.
Management of the economy - The governments duty to ensure growth and development in the country so that persons lives would be improved for eg. better health care and education.
Maintenance of a safe environment for investors - Organisations wishing to invest in to a country must feel that their capital will be safe.
How can businesses protect the environment
Adhere to business laws eg. tax, proper disposal of waste and complying with labour laws.
Importance of environmental protection
the reduction in greenhouse gases and flora and fauna and increased investments could occur.
How the government protects consumers
Price controls, consumer protection, legalisation which are laws regarding health and safety standards, food and drug standards.
Governments regulatory control on business
Legalisation, regulations, taxation, price controls, provision for training workers and low cost of rent.
Social services provided by governments
educational facilities, health facilities, infrastructure and national insurance.
Taxation definition
The compulsory payment made by citizens and corporations to the government for which no direct benefit is given in return.
types of taxes
Direct taxes - Taxes that are incurred directly by a person or organisation eg. income tax, corporate tax, capital gain tax
Indirect taxes - These taxes are placed on goods and services. Eg. Vat, consumption tax, purchase tax and custom duties
Role of taxation
Raising revenue
Income redistribution
Control of spending
To protect local industries
Negative effects of taxation
Taxes such as vat can raise prices creating inflation and it can be characterised as a poverty trap, as some persons pay increases they may have to pay higher taxes leaving them worst than before.
Progressive taxation
The higher the taxpayers income, the higher the amount of tax to be paid.
Regressive taxation
As a person income increases the percentage of tax paid decreases.
Proportional taxation
All tax payers pay the same proportion of his or her income in tax.
Business technology
refers to applications of science ,data , engineering and information for business purposes
role of technology in business
ICT is considered to be all uses of digital tech that exist to help individuals and businesses use info
ways technology has influenced banking and commerce
- ATMS and ABMS located in hotels , petrol stations , malls and supermarkets to add convenience to customers
- Online banking
- e-commerce , using the internet individuals and businesses are able to make business transactions via the world wide web
type of tech
traditional - word , powerpoint, excel
specialised apps- CAD , Quickbooks
digital communications- internet/ mobile
type of tech
traditional - word , powerpoint, excel
specialised apps- CAD , Quickbooks
digital communications- internet/ mobile
E-commerce
this covers outward facing processes that touch customers suppliers and external partners including sales , marketing , order taking, delivery for production of indirect operating expenses such as office supplies
e- business
covers e-commerce but also internal processes such as productions , product development and human resources
ways tech can improve a business
speed and time ,easier storage , automation
benefits of tech to a business
reach more potential customers , streamline operations , reduce cost, maximise profits , provide better services to customers
consequences of unethical use of ICT
intellectual property infringement
