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Higher Business > Test 2 > Flashcards

Test 2 Flashcards

1
Q

What are the 6 stages of the product life cycle?

A
  1. Research and development stage
  2. Launch/introduction stage
  3. Growth stage
  4. Maturity stage
  5. Saturation stage
  6. Decline stage
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2
Q

What is market skimming?

A

Market skimming is a pricing strategy and it means the business charges a high price for the product for a limited period with the aim of making as much profit as possible while the product remains unique to the market.​

As competition in the market increases, the price will fall to be in line with competitors.

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3
Q

What is field research?

A

This involves the gathering of PRIMARY DATA which is information collected first hand for a specific purpose by the business

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4
Q

Methods of field research

A
  1. Questionnaires/surveys
  2. Hall test
  3. Focus groups
  4. Observation
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5
Q

What is desk research?

A

This involves the use of SECONDARY DATA which is information that already exists, having been researched by someone else and then used by the business for its own purpose.

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6
Q

Methods of desk research

A

External data:​
Internet websites eg of competitors​
Newspaper and magazine articles​
Government reports and statistics eg Census​
Information gathered by Market Research businesses​

Internal data:​
Sales figures ​
Customer databases​
Previous market research already done

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7
Q

Problems with desk research?

A

Although desk research is quicker to collect and therefore less expensive, it has to be remembered that it was collected for another purpose and so may contain bias or may be out-of-date.

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8
Q

Advantages and disadvantages of field research surveys.

A

Advantages:
Can choose people based on their characteristics.
Can access people spread across a wide geographical area.

Disadvantages:
Time consuming and expensive to carry out
People may not be interested in being interviewed and might see it as an annoyance.

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9
Q

Name the three employment legislations

A
  1. Discrimination legislation - Equality act 2010
  2. Employment protection legislation - national minimum wage act 1998
  3. Health and safety legislation - Health and safety at work act 1974
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10
Q

What are the 9 protected characteristics under the Equality act 2010

A

Age, Disability, Gender, Gender Reassignment, Pregnancy or Maternity, Race, Religion or Belief and Sexual Orientation, Marriage or Civil Partnership.

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11
Q

Impacts of the equality act

A

No discriminating vocabulary on documents for job vacancies.
Have procedures in place for for investigating if an employee or a customer feels they have been discriminated against under one of the protected characteristics or staff who feel they have been harassed or bullied in the workplace

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12
Q

What are the main acts under the employment protection legislation

A

Employment Rights Act 1996​
National Minimum Wage Act 1998 (up to age 25)​
National Living Wage Regulations (over age 25)​
Working Time Regulations 1998​
Part-time Workers Regs 2000

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13
Q

Impacts of the Employment protection legislation

A

Issue every member of staff with a Contract of Employment detailing their rights in the workplace.​

Give each member of staff an itemised payslip showing how their pay has been calculated.​

Have a Grievance Procedure which must be followed if a member of staff complains about mistreatment in the workplace.​

Have a Disciplinary Procedure which must be followed when a member of staff is accused of misconduct in the workplace.​

Have a procedure for dismissing staff and for making staff redundant that complies with the provisions of the Acts

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14
Q

How have employees benefited from the employment protection legislation

A

receive a Contract of Employment​

receive a minimum period of notice of redundancy and to receive redundancy pay​

not be unfairly dismissed and to challenge unfair dismissal in an Employment Tribunal​

paid maternity leave and re-instatement afterwards​

paternity leave for fathers or for those adopting children​

a minimum hourly wage (depending on age)​

an average working week of 48 hours ​

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15
Q

Health and safety at work act - employers duties?

A

Machinery should be regularly maintained​

Protective clothing should be provided​

Jobs should be risk assessed​

Employees should be properly trained in safe working practices​

A Safety Representative should be appointed​

Accidents and incidents should be reported to HSE (Health and Safety Executive)

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16
Q

Health and safety at work act - employees duties?

A

To conduct themselves in an appropriate manner whilst doing their jobs​

To co-operate with their employer by using the safety and protective equipment provided​

To attend safety training when it is provided​

To report any potential dangers they may see in the workplace

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17
Q

List of cash flow problems

A

Stock is not being sold quick enough
Too much has been spent on non-current assets
Customers (debtors) are taking too long to pay
Some customers don’t pay at all
High interest payments which increase expenses

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18
Q

List of solutions to the cash flow problems

A

Offer discounts and promotions to encourage customers to buy more and pay more promptly.
Arrange better credit terms with suppliers.
Find cheaper suppliers for purchases of supplies and overheads.
Sell unnecessary non-current assets.
Arrange a bank loan or bank overdraft.
Hire purchase or leasing of assets.

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19
Q

What is a statement of financial position?

A

The statement of financial position shows the value of a business at a particular date.

It is a record of assets (what the business owns) and liabilities (what the business owes)

20
Q

What are the features of a statement of financial position?

A

Non-current assets - Items that a business owns and will keep for longer than 1 year. (e.g machinery)

Current assets - Items that a business owns that they will keep for less than 1 year. (e.g stock)

Current liabilities - Items that a business owes and will pay back in the short term. (e.g trade payables)

Long term liabilities - Items that a business owes and will pay back in the long term. (e.g mortgage)

21
Q

Calculations involved with the statement of financial position

A

To find the total capital that is available to the business, you deduct the total liabilities from the total assets of the business.

This should equal the total capital from the Financed By section which shows how the business is financed.

22
Q

What is gross profit?

A

Gross profit is the difference between Selling price and Cost price

23
Q

What are the two types of gross profits

A

For a manufacturing business - The gross profit = selling price - cost of production

For a retail business - The gross profit = selling price - cost of buying and storing the finished goods.

24
Q

What are three features of the research and development stage?

A

High R&D costs

No income from product

Finance comes from “cash cows”

25
Q

What are two features of the launch/introduction stage

A

Sales begin to slowly rise as consumer awareness increases

Heavily supported by advertising (informative and persuasive) and promotions

26
Q

What are two features of the growths stage

A

Sales and profits rising quickly

Supported by promotions

27
Q

What are three features of the maturity stage

A

Sales is reaching its peak

R&D costs paid off

Profits help support development of new production

28
Q

What are two features of the saturation stage

A

Heavy competition

Peak is reached and sales start to fall

29
Q

What are three features of the decline stage

A

Sales fall rapidly

Prices at lowest

Some competitors drop out of market

30
Q

What are four extension strategies

A

Improving the product - new improved versions

Find new uses for the product - for example firelighters now used for barbecues rather than lighting gas heating

Altering the packaging - to appeal to new consumers, developing styling changes - slightly different produce eg colour size

Changing the channel of distribution - for example introducing selling on the internet.

31
Q

List of methods to ensure quality

A

Using high quality resources​

Quality Control ​

Quality Assurance​

Quality Standards and Symbols ​

Total Quality Management (TQM)​

Benchmarking​

Quality Circles​

Mystery Shoppers

32
Q

Using high quality resources to ensure good quality means?

A

Using good quality raw materials that match the quality of the end product being produced.​

Recruiting highly skilled staff and providing good quality training for all staff​

Purchasing the best quality productive equipment and technology that the business can afford to buy.

33
Q

Advantages and disadvantages of using high quality resources?

A

The business has a highly skilled workforce so products can be produced efficiently and of good quality meaning the customers will be satisfied as their quality demands have been met and sales will increase.

Using high quality raw materials can be expensive meaning for the business to make a profit then need to increase the price of the product which could result in less sales.

34
Q

Using quality control to ensure good quality means?

A

This is where finished products are checked by inspectors to see if they meet the set standard. Products are inspected at the start and the end of the production process. Any product not meeting the standards of quality set by the business will be sent for rework or discarded completely

35
Q

Advantages and disadvantages of quality control

A

Reduces chance of poor quality products reaching end users
Only some employees need to be trained as inspectors to look for faults

Faults only found at the end of production
High wastage costs
Reworking faulty products costs time and money

36
Q

Using quality assurance to ensure good quality means?

A

This is where quality is built into the production process.
All staff check all items at all stages of the production process for faults. In this way everyone takes responsibility for delivering quality.
The product is checked throughout production. This means that mistakes can be identified quickly.

37
Q

Advantages and disadvantages of quality assurance

A

Results in zero defect production as wastage is at very low percentage.
Because mistakes are spotted quickly, this will reduce waste. This in turn will save the company money.

This method of quality control can be costly due to the regular checks being made throughout the production process.
Regular checks can also slow down production. This means lower productivity.
Every employee needs to be trained in inspection of the product.

38
Q

Using quality standards to ensure good quality means?

A

A standard is a published document that contains a technical specification or other precise criteria designed to be used consistently as a rule, guideline, or definition. All standards take the form of either specifications, methods, vocabularies, codes of practice or guides

39
Q

Benefits of using Quality Symbols to convey to customers that the product is good quality

A

increased sales as customers know that goods are of a certain quality​

staff will strive for quality in all aspects of their work knowing that failure may mean loss of the award and thus decreased sales and this should also give them more job satisfaction/motivation to produce good quality.​

the quality symbol acts as a marketing tool​

the Government may award contracts only to an organisation holding approved quality standards eg BS EN ISO 9001​

fewer returns/customer complaints​

brand loyalty can be created​

higher price may be charged for higher quality products

40
Q

Using total quality management to ensure good quality means?

A

Right first time (zero defects)​

Consistent, clear message on quality across the whole organisation​

Staff commitment to ongoing improvement​

Close links with suppliers​

Well trained staff​

Staff to work together in teams across the organisation​

Customer-centred focus

41
Q

Advantages and disadvantages of TQM

A

Eliminates the fear of failure​
Departments integrate and share problems​
Clear, achievable goals are set​
Helps employees to take pride in their work​
Trains and educates staff​
Establishes a structure and culture to support these aims​
Reduced waste (3%)

Time-consuming to administer​
Costly due to the time and paperwork involved.

42
Q

Using bench-marking to ensure good quality means?

A

Bench-marking is the process of setting competitive standards, based on the achievements of other firms, against which an organisation will monitor its progress.

43
Q

Advantages and disadvantages of bench-marking

A

Identifies best practice in the market which will improve performance if these methods are adopted by the organisation.
Can provide a goal for employees which will increase motivation.
Can make the organisation more competitive in the market.

May be difficult to gather required information from competitors.
It can be time consuming to study techniques used by other companies.
Internal factors such as lack of finance may prevent the adoption of competitors practices.
The company/product will only be as good as the benchmark set.

44
Q

Quality circles are?

A

Quality circles are small groups of workers of different levels in the firm who come together to discuss and solve problems in production.

Managers, assembly line workers and engineers mix together and everyone’s opinion is valued and respected. Membership of quality circles is voluntary

45
Q

Advantages and disadvantages of quality circles

A

Increased productivity​.
Improved quality​.
Better employee morale.

takes time to set up and perform.
arguments may arise causing conflict between employees.

46
Q

What are mystery shoppers?

A

Mystery shopping is used in retail businesses where trained shoppers try out the purchasing experience anonymously in order to evaluate:

the customer experience​
operational efficiency​
employee integrity​
use of merchandising​
service/product quality​

and then provide feedback to management on their findings.

47
Q

Advantages and disadvantages of mystery shoppers

A

Feedback is received that can be used to improve processes​
Training needs can be identified​
Improves customer retention​
Monitors quality of products and service​
Improves employee awareness of the importance of customer service

Costly to hire these trained shoppers

Higher Business (3 decks)

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