Theme 1 (2) Flashcards
Fixed costs
Costs that do not change when output changes.
Focus group
A group discussion among people selected from the target market; it draws on psychology to provide qualitative insights into consumer attitudes.
Franchise
The right given by one business to another to sell goods or services using its name.
Franchising
Paying a franchise owner for the right to use an established business name, branding, and business methods.
Globalisation
The process of businesses increasingly operating on an international scale, buying, and selling in different countries to exploit lower costs and identify new markets.
Goods
Any physical product a consumer can buy (natural or manufactured).
Government Taxation
Charges placed by the government on goods, imported goods, and the incomes of individuals and companies.
Gross Profit
The amount of profit that a business makes before the cost of sales are deducted.
Independence
The need by many business owners to make their own decisions and be their own boss.
Inflation
An increase in the general level of prices in an economy over time.
Innovation
The act of creating new products or processes.
Insolvency
When a business lacks the cash to pay its debts when they fall due.
Interest
The charge made by banks for the cash they have lent to a business or individual, as a fixed cost.
Interest rate
The annual cost of borrowing money from a bank and the annual return of saving money with a bank.
Labour
Workers or the workforce.
Legislation
Laws passed by Acts of Parliament which must be adhered to by businesses and individuals.
Limited Liability
Where shareholders of the business can only lose the amount they originally invested in the company because the owners and the company are treated as legally separate.
Loans
A fixed sum of money lent by a bank to an individual or a business for a specific purpose, which must be repaid with interest in set payments over an agreed period of time.
Margin of safety
The difference between the planned level of output and the break-even level of output.
Market map
Measuring where existing brands sit on a two-factor grid, for example young/old compared with high price/low price.
Market research
The process of gathering information about the market and customers’ needs and wants in order to help inform business decisions, including product design and marketing.
Market segment
A part of a market where consumers share similar characteristics such as; age, gender, geographical location, occupation.
Market Segmentation
The dividing up of a market to meet the needs of consumers with similar preferences.
Market share
The percentage of a market held by one company or brand.
Net cash-flow
The difference between cash inflows and cash outflows, in a period of time.
Obsolete
A good or service which has become out of date.
Opening balance
The closing balance at the end of the previous time period.
Original ideas
Ideas that have not been done before.
Overdraft
The ability for a business to go into a negative balance on their current account.
Partnership
A business which is owned by more than one person which has unlimited liability.
Payment systems
Different ways of paying for goods and services digitally/electronically.
Place
The method by which the business distributes the good or service to the consumer, it includes selling products to retailers and getting the products displayed in prominent positions.
Pressure groups
An organisation that tries to influence the decision making of a business or government.
Price
The amount a business charges consumers for a good or service.
Primary research
Research conducted first hand, it is tailored to a company’s specific needs.
