theme 1

Question 1

what are customer needs?

Answer 1

price
quality
choice
convenience

Question 2

what is the difference between primary market research and secondary market research and give examples and advantages and disadvantages?

Answer 2

primary research- data collected first hand for specific research purposes.
advantages: tailored to product, unique research.
disadvantages: could be badly designed, expensive, time taking
examples: survey questionnaires, observations, focus groups, test marketing

secondary research - information from an already existing business.
advantages: quicker to obtain, less expensive.
disadvantages: collected from another source therefore unreliable
examples: websites, reviews, books, sale figures, government stats

Question 3

Difference between qualitative and quantitative

Answer 3

quantitative research is numeric and objective, seeking to answer questions like when or where. On the other hand, qualitative research is concerned with subjective phenomena that can’t be numerically measured

Question 4

What is the purpose of market research?

Answer 4

• identify and understand customer needs
• identify gaps in the market
• reduce risk
• inform business decisions

Question 5

what is market segmentation? give examples

Answer 5

process of dividing entire market up into different customer segments
location, demographic, lifestyles, income, age

Question 6

Aims vs objective ?

Answer 6

aims- having a long term goal a business wants to achieve
objective- smaller (short-term) goals to help reach and achieve long term goals

Question 7

variable vs fixed costs

Answer 7

variable costs- a change directly with the quantity produced and sold by a firm
fixed costs- costs which do not vary with the amount the business produces

Question 8

revenue formula

Answer 8

revenue= quantity x price

Question 9

breakeven meaning and formula

Answer 9

point at which revenue = total costs
breakeven= total fixed costs / (price- variable costs)

Question 10

margin of safety

Answer 10

the amount by which sales fall before break even point is reached and business makes no profit
MOS= Actual sales - breakeven sales

Question 11

What is trade credit?
advantages and disadvantages

Answer 11

items bought from suppliers on a buy now pay later basis
A= gives business more cash to use in the immediate future, does not incur interest charges
D= can only be used to by certain goods

Question 12

insolvency vs liquidation vs bankruptcy

Answer 12

in= ability of a person or corporation to pay their bills, as and when they become due and payable
B= when a person is declared incapable of paying the dues and payable bills 
L= the process of winding up a corporation or incorporated entity

Question 13

overdraft advantages and disadvantages

Answer 13

Overdrive allows a business to draw more money from the bank account then they have.
advantages are they are quick to arrange and only pay interest on amount
disadvantages are suitable for small amounts

Question 14

Formulas:
Net Cash Flow
Closing Balance
Opening Balance

Answer 14

Net cash flow= inflows - outflows

Closing balance= opening balance + net cash flow

Opening balance= closing balance of the previous period

Question 15

What is a cash flow statement?

Answer 15

Record of the cash inflows and outflows with a business

Question 16

Private limited companies
vs
public limited companies

Answer 16

private shareholders have restricted ownership, only if agree and can share privately
public limited companies, anyone can share hold from about £50,000

Question 17

Advantages and Disadvantages to Sole Traders

Answer 17

sole trader set up a business on his own
ADVANTAGES are that they are responsible for themselves, can become really rich, quick and easy to set up and financial information is kept private
DISADVANTAGES can be made bankrupt and I have to sell personal belongings.(Unlimited liability) They are not registered as a company and have their own on one person. It may be difficult to raise enough money to establish or grow the business and it’s difficult to run without an owner.
pressure
harder to retain employees

Question 18

Partnership

Answer 18

Business earned by people who share the financial risk, two or more individuals

Question 19

what are the advantages and disadvantages to partnerships?

Answer 19

ADVANTAGES: sleeping partners, sharing financial risks, easier to finance and financial info kept private, experience, good employees, bank trusts more to invest

DISADVANTAGES: if a partner leaves, others have to pay debt, no deed of partnership, decisions made by one can affect all, profits shared, disagreements, if partner leaves then business doesn’t exist
unlimited liability

Question 20

limited liability

Answer 20

Limited liability is a form of legal protection for shareholders and owners that prevents individuals from being held personally responsible for their company’s debts or financial losses.

Question 21

Unlimited Liability

Answer 21

each business owner is equally responsible for whatever debt accrued within a business if the company is unable to repay or defaults on its debt. An owner’s personal wealth can be seized to cover the balance owed.

Question 22

What is a Franchise?

Answer 22

when one business gives another business permission to trade, using its name and product in return for a fee and share of it

Question 23

Meaning + Advantages and disadvantages to a Franchisee

Answer 23

A franchisee is an entrepreneur who pays a fee to trade, using the name of products of an established business
Advantages: less risky, as a franchise is already labour and successful
support provided by the franchise training to the entrepreneur, and the employees
brand recognition
benefit from national advertising campaign
Disadvantages: need to pay a large initial fee, and an ongoing share of the profits.
Key decisions made by the franchisor which suppliers to use, setting prices, uniforms
Brand reputation may be damaged by other franchises.

Question 24

Franchisor Advantages and disadvantages

Answer 24

A franchiser is an established business that gives permission to an entrepreneur to trade using its name products
Advantages: expansion can be faster because franchisees provide the labour and sales expansion is cheaper, because funding comes from franchisees
franchisees are responsible for their own success increasing motivation
Disadvantages: difficult to manage franchises, selecting one wrong, franchisee can damage the reputation of the whole business

Question 25

four ps in marketing mix

Answer 25

price
promotion
place
product

Question 26

private limited companies

Answer 26

ownership of shares restricted
limited liability
all shareholders must agree to sell shares
obliged to publish accounts each year

Question 27

public limited companies

Answer 27

sell shares on stock exchange
limited liability
owner had little control over decisions
enough shares bought- can take over
accounts must be published

Question 28

short term examples

Answer 28

trade credit
overdrafts

Question 29

long term examples

Answer 29

personal savings
crowdfunding
share capital
venture capital
bank loan
retained profit

Question 30

Financial aims for a start up

Answer 30

survival, profit, sales, market share, financial security

Question 31

Non-financial aims

Answer 31

social objectives
personal satisfaction
challenge
independence
control

Question 32

Types of e commerce

Answer 32

• buying and selling B2B
• reaching customers in all parts of the world (B2C)
• consumer to consumer (reuse items)

Question 33

Different promotional methods

Answer 33

Tv Infulencers
Flyers
Discounts
Poster
Newspapers
Bill Boards
website ads
Ads on social media

Question 34

Factors effecting promotional Methods

Answer 34

cost of advertising
nature of product or service
business size
budget
target audience

Question 35

penetration pricing

Answer 35

starting low and slowly increasing the price once the business is established

Question 36

skimming pricing

Answer 36

products sold at a high price before dropping down