Theme 1 Flashcards
What is a market?
A place buyers and sellers come together to exchange goods, normally an exchange of money at a set price.
What is market size?
Total number of sales in the market, measured in terms of money or amount sold.
What is market share?
The proportion of total market sales one firm has. Firms want to increase this by making it a marketing objective.
What is a brand?
A unique feature of a business such as a name, shape, or logo that distinguishes the business from its competition.
What are dynamic markets?
An environment that is constantly changing, influenced by social trends, tech trends, and consumer tastes.
What is online retailing?
The process of buying and selling goods over the internet, providing a low-cost, quick option for new businesses and global reach.
What is innovation?
A new idea or invention launched onto the market that affects the market by bringing a new one into existence.
What is market growth?
Percentage change in the size of the market, where a growing market creates opportunities and a declining market is a threat.
What is competition?
The number of firms in the market, where larger firms have more finance and therefore more power over competitors.
What is degree of competition?
The number of firms that exist within the market.
What is a monopoly?
A market structure where one firm dominates the market.
What is an oligopoly?
A market structure where a few large firms dominate the market.
What is monopolistic competition?
A market structure where many firms compete to sell differentiated products.
What are Porter’s Five Forces?
Competitive rivalry, buying power, selling power, threat of substitutes, threat of new entry.
risks
measurable unknowns in decision making. possible to quantify and work out how likely it is to happen
uncertainties
non-measurable unknowns of decision making. not possible to quantify as the probability of the outcome is too unpredictable.
What is product orientation?
An inward looking approach to product development, focusing on whether the product can be made and the process to make it.
What is market orientation?
An outward looking approach to product development, focusing on consumer wants and needs.
What is market research?
Collection of analysis and data to inform a business about its market.
What is primary data?
Collection of first-hand data.
What is secondary data?
Research that has already been done.
What is qualitative data?
Gathering of non-numerical information.
What is quantitative data?
Gathering of numerical data.
What is sampling?
Investigating subjects chosen from a larger group to gain insight into consumer wants and needs.
What is market segmentation?
The process of splitting the market into subgroups to help identify different types of consumer wants and needs.
What is market positioning?
Where a product is placed in the market relative to its competition.
What is market mapping?
A diagram that shows perceptions of customers against competitors, plotted by key variables.
What is competitive advantage?
A feature of a business that allows it to perform more successfully, such as an item perceived to be better at the same price or lower.
What is product differentiation?
An identifiable feature of a business that allows it to perform more successfully, such as a product’s USP.
What is demand?
The amount of a good that consumers are willing to buy at a set price or a set time.
What is a substitute good?
Alternative goods for consumers; if the price of good ‘A’ increases, demand for this good increases.
What is a complementary good?
Goods often bought together; if the price of good ‘A’ increases, demand for this good decreases.
What are necessities?
Goods for which demand is less likely to change when incomes change, as they are needed for daily life.
What are luxuries?
Goods for which demand increases with income, as people can afford them; demand decreases if incomes fall.
What are inferior goods?
Goods for which demand decreases if incomes increase, as consumers switch to better quality.
What is supply?
The amount of a good that suppliers are willing to sell at a set price or a set time.
What is market equilibrium?
Where demand and supply are equal, with market forces pushing towards this state.
What are market forces?
Factors that always push towards market equilibrium, where there are no products left in the market.
What is PED?
A measure of how responsive demand is in relation to price, determining if a price change leads to a change in revenue.
What is YED?
A measure of how responsive demand is in relation to income, determining if an income change leads to a change in revenue.
What is a product?
The goods or services a firm provides.
What is the design mix?
The three elements of product design: function, aesthetics, cost.
What is promotion?
The component that informs and persuades customers to buy a product.
What is a promotional mix?
Combination of promotional activities that a firm uses to create consumer awareness of the firm and product, boosting sales.
What is public relations?
Communicating with the media to get favorable publicity.
What is merchandising?
Influencing customers to get them to the buying point.
What is sales promotion?
Using short-term offers to increase sales.
What is direct selling?
When a supplier cuts out the firm and sells directly to the customer.
What is advertising?
Using media to communicate with consumers.
What is pricing strategy?
Methods that an organization uses to price a product, often to meet marketing objectives and cover the break-even point.
What is cost plus pricing?
A pricing strategy where a percentage mark-up is added to calculate a price at which it is sold.
What is price skimming?
A pricing strategy that sets a high initial price to gain profits, then lowers this price once established.
What is price penetration?
A pricing strategy that sets a low initial price to gain a foothold in the market, to raise later.
What is predatory pricing?
A pricing strategy where a price is set low for a short period to force competitors out.
What is leader competitive pricing?
A pricing strategy where firms that dominate the market set the price for others to follow.
What is taker competitive pricing?
A pricing strategy where small firms set prices based on the market price.
What is psychological pricing?
A pricing strategy where firms set a price designed to seem cheaper (e.g., 99p).
What is a distributor?
The person who sells an organization’s product to the retailer.
What is a distribution channel?
The route to the market a product takes from production to the consumer.
What is a manufacturer?
Organizations that take raw materials and process them into finished goods.
What are wholesalers?
They buy large quantities of supply and sell them in smaller quantities.
What is a retailer?
An organization that sells goods to the general public.
What is a marketing strategy?
Marketing plans used to achieve marketing objectives, including decisions related to product and market development.
What is a product portfolio?
Looks at a range of products the business has under its control, helping to identify where the business products are positioned in the market.
What is the product life cycle?
Stages a product goes through that influence the inflow and outflow of cash.
What is research and development?
The initial stage of the product life cycle where a business invests in new ideas prior to launch.
What is a launch?
The time the product is introduced onto the market.
What is growth in the product life cycle?
A stage where sales volume and revenue increase over time.
What is maturity in the product life cycle?
A stage where sales of the product are fully established and sales remain about the same.
What is decline in the product life cycle?
A stage when sales begin to fall.
What is an extension strategy?
A strategy used to extend the lifetime of a product.
What is the Boston Matrix?
The Boston Matrix is a model which helps businesses analyse their portfolio of businesses and brands.
What is niche marketing?
When firms target a small subsection (unexplored) area of the market, allowing businesses to charge premium prices for their goods.
What is mass marketing?
When firms target the whole market to maximize sales, often adopting a market penetration strategy.
What is soft HRM?
A strategy where the workforce is treated as an asset that can contribute to achieving business objectives and opportunities for training.
What is hard HRM?
A strategy where the workforce is treated as a resource that needs to be managed to control costs and output.
What is a flexible workforce?
A strategy that uses part-time employees to minimize HR costs and respond to fluctuations in demand.
What is multi-skilling?
The ability of the workforce, where employers should match working hours to ability for the best results.
What is outsourcing?
Using services of another organization to complete manufacturing, providing flexibility in supply and increasing capacity.
What is dismissal?
Termination of an employee’s contract due to a breach, such as incompetence or a disciplinary issue.
What is redundancy?
A form of dismissal when a contract is terminated because a job no longer exists, entitling the employee to financial compensation.
What are trade unions?
National organizations that protect their members and improve economic and working conditions.
What is industrial action?
When employees take sanctions to impose pressure on an employer (e.g., strike).
What is the recruitment process?
The steps undertaken by a business from identifying the need for a new employee to attracting suitable candidates.
What is internal recruitment?
A form of recruitment where candidates for the position are chosen from within the business.
What is external recruitment?
A form of recruitment where candidates for the position are chosen from outside the business.
What is selection?
Actions taken by a business to help identify the best candidate for a vacancy.
What are interviews?
A question and answer session with a candidate, a potential employee.
What is organizational structure?
The way the workforce is organized, including job roles and communication flows.
What are levels of hierarchy?
The number of layers within an organization’s structure.
What is the chain of command?
The way authority and power are passed down the levels of hierarchy.
What is span of control?
The number of subordinates that a manager is in control of.
What is a centralized HR strategy?
A strategy where responsibility is maintained by a small number of managers at the top of the hierarchy, allowing for fast decision making.
What is a decentralized HR strategy?
A strategy where responsibility is delegated to middle managers, allowing for direct involvement with projects.
What is a tall structure?
A business that has many levels in its hierarchy, resulting in a narrow span of control.
What is a flat structure?
A business that has few levels in its hierarchy, resulting in a wide span of control.
What is a matrix structure?
A business structure where teams are formed from different functional areas to work on specific projects, ensuring communication across areas.
What is motivation?
The reasons why people behave in a certain manner, which can be financial (e.g., bonuses) or non-financial (e.g., increased responsibility).
What are financial incentives?
Methods used to reward the workforce with money, including piece rate, commission, bonus, and profit share.
What are non-financial incentives?
Methods used to reward the workforce without money, including delegation, consultation, empowerment, and team working.
delegation
passing authority down the hierarchy
flexible working
gives employees greater control over their own work routines
job rotation
varying tasks that an employee does to reduce boredom
job enlargement
increasing the number of responsibilities an employee has
job enrichment
increase in the level of responsibility an employee has
leadership
the ability to influence and direct people to meet goals of a group
management
these people set objectives and decide how to go about achieving them in a business
autocratic leadership
a leadership style where all decisions are made by the top without consultation
paternalistic leadership
a leadership style where the leader acts in a fatherly way towards the workforce
democratic leadership
a leadership style where the leader consults the team but makes the final decision themselves
laissez-faire
a leadership style where the leader allows the team to make decisions without supervision. the term means ‘to leave alone’
entrepreneur
a person who spots an opportunity and takes risks to start a new business. characteristics include being risk takers or opportunity spotters
intrapreneur
when employees within an organisation act in the same way as entrepreneurs. an employee as resources at their disposal and is encouraged to take risks
business objectives
the targets to be achieved by a business in a given time frame. should be SMART; specific, measurable, achievable, realistic, timed.
survival
an example of a business objective. to continue to exist as a business.
profit maximisation
an example of a business objective. to produce enough where the surplus of revenue over total costs is at its highest.
sales maximisation
an example of a business objective. to achieve the highest achievable amount of sales.
sole trader
a form of business. an individual who runs their own business. is unincorporated and therefore has unlimited liability.
partnership
a form of business. when two or more people join together to set up a business. they share costs, risks and responsibilities.
private limited company
a business owned by shareholders who are family and friends of the entrepreneur. this business must have ltd. after its name.
franchise
the process where a franchisor gives a franchisee permission to trade using the franchisors name and selling its goods and services.
franchisor
a business that sells a license to allow another person to trade using its name and goods.
franchisee
a business that is given permission from another business to use their name and goods to trade.
public limited company
a business that sells shares on a stock exchange. it must have a minimum of £50,000 in share capital and have plc. after it’s name.
opportunity cost
the cost of one action in terms of the next best alternative forgone.
government subsidies
finance provided by the government to encourage suppliers to produce certain goods and service.
indirect taxes
charges that are placed on goods and services produces by individuals and firms (e.g. VAT)
social trends
changes to the characteristics of society over time
ethical sourcing
morality in decision making, doing what is ‘right’ when choosing suppliers
market penetration
a part of ansoff’s matrix. when a business focuses on selling existing products in existing markets.
market development
a part of ansoff’s matrix. when a business focuses on selling existing products in new markets.
product development
a part of ansoff’s matrix. when a business focuses on selling new products in existing markets.
diversification
a part of ansoff’s matrix. when a business focuses on selling new products in new markets.
