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Edexcel Business A-Level > Theme 1 > Flashcards

Theme 1 Flashcards

1
Q

Online retailing benefits

A
  • lower costs = no physical store
  • Orders come at any time
  • Prices can be easily compared
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2
Q

Online retailing drawbacks

A
  • More competition due to higher accessibility
  • Some people want physical interaction
  • Some feel uncomfortable giving their personal details
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3
Q

Direct competiton

A

Similar products to appeal to same group of customers

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4
Q

Indirect competition

A

Business sell different products but are competing for the same customers ie restaurants

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5
Q

Production Orientation

A

Focuses heavily design , quality or performance and ASSUME customers will like it

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6
Q

Market Orientation

A

Focuses on customer preferences and invests on market research and what customers are WILLING to buy

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7
Q

Quantitive research

A

Numerical statistics - facts and figure
ie multiple choice questionnaires

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8
Q

Qualitative research

A

Opinions - tends to be more informative

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9
Q

Primary Market research (new data)

A
  • Questioners or surveys
  • Test marketing
  • Sampling
  • Focus groups
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10
Q

Secondary Market research (using available data ) (3)

A

-Government publications
- Internet
- Market reports

+ Easy to gain access
- May be out of date

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11
Q

Demographic market segment

A
  • Age
  • Gender
  • Class
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12
Q

Geographic market segment

A
  • Dvided by region , country , world
    ie range of cultures
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13
Q

Income market segment

A

Aimed at either low income groups or high income groups

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14
Q

Behavioural market segment

A
  • Amount of use
  • Lifestyle
  • Interests and hobbies
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15
Q

Examples of competitive advantages (8)

A
  • Low costs
  • Innovative product
  • Successful advertising
  • Product differentiation
  • High quality
  • Good customer service
  • Convince
  • ADDED VALUE
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16
Q

Demand factors (8)

A
  • Substitutes
  • Complimenatry products
  • Consumer income
  • Seasoanl change
    -External shocks
    -Trends/ consumer preferences
    -Demogrpahics
  • Advertising and branding
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17
Q

Supply factors (6)

A
  • Production costs
  • Indirect taxes
  • Subsidies
  • New technology
  • Weather conditions
  • External shocks
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18
Q

PED dependent factors

A
  • Necessary products will be price INELASTIC
  • Brand loyal customers will cause elasticity to decrease
  • Internet and substitutes will increase elasticity
  • High priced products tend to have high elasticity
  • Regular bought product tends to have INELASTIC pricing
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19
Q

Marketing mix (4Ps)

A

Product
Price
Place
Promotion

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20
Q

Design Mix (3)

A

Aesthetics - look good and not too complicated
Function - fit for purpose and fulfil customer needs
Cost - cheap to produce but ensuring good quality

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21
Q

Social changes that influence the design mix

A
  • Ethically sourced
  • Sustainable materials
  • Recyclable and reusable products
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22
Q

Types of promotion (4)

A
  • Advertising = build brand image , target specific groups , social media is cheap version
  • Sale promotions = raises awareness of business
  • Personal selling through a salesperson
  • Sponsership / PR = may be expensive and taken the wrong way OR can raise brand awareness and create good public image
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23
Q

Type of branding (3)

A

Corporate branding = How business is presented

Product branding = How individual product is presented (clear logo , name , statement) , product tends to have a higher price as customers trust the brand

Own brand branding = Supermarket brand product , cheap to produce and typically sold at low price but are known for lower quality

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24
Q

Benefits of strong branding

A
  • Add value to product
  • Make product less price elastic
  • Seen as a higher quality product making it more desirable than the subsidies
  • Can prevent new entrants
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25
Q

How to build a brand

A
  • Give product a USP which helps differentiate the product
  • Advertising will build customer awareness
  • Sponsorship although costly it will be advertised to anyone attending or watching
  • Strong social media presence - low cost and can target several groups
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26
Q

Price skimming

A

New product sold at HIGH STARTING price , then fall after a year or if there are cheaper alternatives

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27
Q

Penetration pricing

A

Launching a new product and setting at the lowest
possible price

-Suitable for price elastic products to gain market share
-Customers may be expecting price to remain low

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28
Q

Predatory pricing

A

Business lowers prices to undercut other business out of the market
- Effective on new entrants trying to become established

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29
Q

Competitive pricing

A

Prices are lower or match their competition

30
Q

What social trends can affect Pricing strategies ? (2)

A
  • Online retail = easier for customers to compare prices
    Many subsidies available
  • Price comparison websites = save time and effort with comparison of products
31
Q

Product life cycle

A

Development
Introduction
Growth
Maturity
Decline

32
Q

Extension strategies to keep product growing (2)

A
  • Product development
  • Promotion change
33
Q

Importance of a mixed product portfolio

A
  • If one product is in the declining stage , then the business can still depend on other products to remain successful
34
Q

Boston Matrix

A

High market share , High market growth = Star
High market share , Small market growth = Cash Cow
Small market share , High market growth = Question mark
Small market share , Small market growth = Dog

35
Q

Limitation of Boston matrix

A
  • Can’t exactly predict product turnout
  • Profit of the product may be different to the suggested matrix
36
Q

B2B marketing

A

Sale of one business products to another business
ie surgery gloves to hospitals

  • More informative
  • Not likely to be heavily advertised
  • Customers are CAUTIOUS of cost over the quality
  • Important to have a long-term relationship
  • Must have effective customer service
  • More specialised products
  • High production volume
37
Q

B2C marketing

A

Selling a product directly to a consumer
ie food in supermarkets

  • Customer may feel an emotional component
  • Customer focuses on quality not price
  • Traditional advertising is used to target a mass audience
38
Q

Customer loyalty importance

A
  • Leads to repeated purchases
  • Salespeople and after sale is vital to ensure good customer relations
  • More expensive the brand the more the customer will bevalued
  • Loyalty cards can bring retailer and customer together
39
Q

Wage V Salary (defenition)

A

wage - paid based off the amount of work completed
salary - fixed amount paid monthly/weekly

40
Q

Types of flexible workforce (7)

A
  • Full time
  • Part time
  • Zero hour contract
  • Work from home
  • Shift work
  • Flexible hours
  • Outsourcing
41
Q

Pros and Cons of INTERNAL recruitment

A
  • Candidates are aware of the business
  • Short and cheap hiring process
    -Motivated workers to get a promotion
  • Leaves a empty job in another department
  • Other workers not chosen might feel resentment
42
Q

Pros and Cons of EXTERNAL recruitment

A
  • New and fresh ides
  • Brings experience from other organisations
  • Large applicant number

-Long and expensive process
- Longer introduction process
- May behave differently to the way they’re presented

43
Q

On-the-job training Pros and Cons

A
  • Easy to organise
    -Cheap
    -Specific to job title
  • Trainers wont be productive
    -Some bad habits may be passed on
  • Lack of new ideas
44
Q

Off-the-job training Pros and Cons

A

-Specialist trainers
- New and fresh ideas
- No distractions

  • Costly
  • May not be specific to specific job listing
45
Q

Hierarchical Structure

A
  • Each level has authority over the level below it
  • Clearly shows which employee is accountable to someone
  • Shows clear devotions of sections
46
Q

Tall structure

A
  • Long command chain
  • Bad communication and less efficient
  • Descions take ages to be approved
  • Lots of paperwork involved
  • High opportunity for a promotion = Source of motivation
47
Q

Flat Structure

A

-Less levels = more responsibility and freedom
- Message between one level make take time
- Managers have a wide span of control

48
Q

Advantages and Disadvantages of Centralisation (Managers)

A
  • Leaders have a lot of experience
  • Mangers get a overview of business as a whole
  • No bias toward workers
  • Quick descions
  • Demotivating to excluded employees
  • Likely to react slowly which allows competitors to take action first
49
Q

Advantages and Disadvantages of Decentralisation (Staff)

A
  • Involvement will motivate employees make them feel valued
  • Day to day decisions can be made quickly
  • Can have expert knowledge on specific sector
  • May not have enough experience
  • May not version the whole business when finalising the descion
50
Q

Matrix structure pros and cons

A
  • Tends to be project based
  • Clear reporting system
    -Clear objectives
  • Conflict may lead between different segment managers within a project
51
Q

Taylors Scinetific management

A
  • MONEY
  • more produced = more pay = motivation
  • may lead to a fall in quality
52
Q

Maslow hierarchy of needs

A
  • Needs from lower down the pyramid must be met
  • Needs are specific to each individual
53
Q

Herzbergs Two factor Theory

A

Hygiene factors don’t motivate but ensure satisfaction
ie pay , supervision , relations
Motivation factors will focus on motivation
ie recognition , achievements

54
Q

Mayo’s Human relations Theory

A
  • Manager communications with employees must be prioritised to ensure employee feel valued
  • Social needs must be met ie social clubs or free work gatherings
55
Q

Non financial motivation methods (8)

A
  • Job enlargement
  • Job enrichment
  • Job rotation
  • Empowerment
  • Consulations
  • Delegation
  • Team-working
  • Flexible working
56
Q

Financial motivation methods (4)

A
  • Piecework = paid per unit produced
  • Commission = Bonus on top of their salary
  • Performance-related pay
  • Bonus schemes
57
Q

Leader vs Manager

A

Leaders share a vision with others an push people to complete it , often think long term to improve and innovate business

Managers make decisions affecting day-to-day , by setting department objectives to meet targets

58
Q

Autocratic leadership

A
  • Independently form decisions
  • Requires heavy supervision
  • Used on unskilled workers or projects with quick deadlines
59
Q

Paternalistic leadership

A
  • Leader consults workers before making decisions
  • Leader gets involved and cares about employee well-being
  • Used on unskilled workers or with quick deadlines
60
Q

Democratic leadership

A
  • Discuss issues with employees and encourages participation
  • Leader delegates tasks and tries to keep motivation high
  • Hard to implement in big group
61
Q

Laissez-faire leadership

A
  • Rare interference with employees
  • Successful when implanted to a highly motivated workforce
62
Q

Qualities of a Entrepreneur (3)

A
  • Set and create a business = notice gaps in the market with market research and raise enough money for start up
  • Run and develop a business = up to date on laws and regulations , set new objectives and aims , hire employees
  • Innovate the business = New products , take risks , encourage innovation within employees
63
Q

Barriers to overcome Entrepreneurship (4)

A
  • Lack of money
  • Lack of confidence
  • Lack of training
  • Lack the ability to identify growth and development opportunities
64
Q

Entrepreneur characteristics (6)

A
  • Initiative
  • Hard-working’
  • Creative
  • Self confident
  • Risk taking
  • Resilient
65
Q

Financial motives of setting up a business (2)

A
  • Earn enough to support themselves
  • Earn more than through employment
66
Q

Non financial motives of setting up a business (6)

A
  • Indepndece
  • Flexibility
  • Work from home
  • Challenge might motivate them
  • Make a difference toward a social problem
  • Change in ethical issues
67
Q

Moving from entrepreneur to a leader (3)

A
  • Delegate responsibility to other members
  • Develop emotional intelligence (manage emotions)
  • Become less reactive (ask others for opinion before finalisation)
68
Q

Business objectives (9)

A
  • Aim and objectives
  • Survival
  • Maximising profits
  • Sale maximisation
  • Increased market share and revenue
  • Cost effiency
  • Improve employee welfare
  • Increase customer satisfaction
  • Social objectives
69
Q

Sole trader

A
  • Easy and quick
    -Profits return to owner
  • Personal customer attention
  • Risky = hard to establish in the market
  • No EOS
70
Q

Partnerships

A
  • Easy to raise capital
  • No information is released to the public
  • Shared skills , decisions and problems

-Unlimited liability
- Disagreements may occur

71
Q

Private Limited company (Ltd)

A
  • Limited liability
  • Can sell shares to raise capital
  • Has legal status
  • Can employ managers
  • Accounts are public
  • Expensive to set up
  • Can’t sell shares on the stock market

Edexcel Business A-Level (4 decks)

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