Theme 1 A level business Flashcards
What is Product Orientation?
When a business is more focused on the product rather than the market.
What is a dynamic market?
A market that is constantly changing in order to meet customer needs and wants
What is Market segmentation?
A whole market divided into smaller sections to meet customer needs more efficiently
What is a mass market?
A mass market is a saturated market that products and services are advertised in the same way
What is a niche market?
A niche market is a small subsection of a larger market that caters for specific customer needs and wants
What is a market
A market is a place where people meet to trade products
What is market share?
The percentage of a market that a business, product or service has
What is Market research?
Market Research is research that is done by a business to cater for new customer needs
What is Primary market research?
Primary market research is research that is done by the business and is relevant to the business.
What is secondary research?
Secondary research is research that has already been done and is not particularly relevant to the business
What is qualitative data?
Qualitative data is the public’s judgements and opinions
What is quantitative data?
Quantitative data is data that is number and statistics.
What is risk?
Risk is something that can be planned for the probability of outcomes that are known or at least understood
What is uncertainty?
Uncertainty is something that cannot be planned by a business such as a recession or a natural disaster
What is Demand?
Demand is the amount that customers are willing and able to purchase at a given price
What is the basic law of demand?
As price increases, Demand decreases
What is Supply?
Sup[ply is the amount that a producer is willing and able to supply at a given price
What is the basic law of supply?
When price increases supply increases
What are the 4 P’s
Product, place, price and promotion
What is the design mix?
Cost, Aesthetics, Function
What is a mark up?
A mark up is the % of added value to a product
What is a flat structure?
When leaders have a short chain of command but a wide span of control
What is a Tall structure?
When leaders have a long chain of command but a narrow span of control
What is a matrix structure?
A 2x2 matrix model that analyses a product portfolio according to the growth rate of the market and the relative market share of products within the market.
What is motivation?
An employees desire to achieve a goal
What was Taylor’s theory?
Taylor believed that workers were motivated by money and should be paid on the amount of items produced (Piece rate)
What was Maslows Theory
Maslow made the hierarchy of needs, a pyramid that describes levels of of human needs that motivate us
What was Herzbergs Theory?
Herzberg developed the two factor theory of motivation: The hygeine factor and the Motivators
What was Mayos Theory?
Mayo believed that workers wanted more than money and that staff would be more motivated to work harder if their social needs were met.
What is online retailing?
When products or services are sold online
How do customers incomes impact demand?
As income rises, demand should rise
However, if the product is inferior demand will fall and better alternatives will be chosen
How do seasonal factors affect demand?
Most products will have seasonal peaks
E.g ice cream in the summer
What is a normal good?
It is a good thats demand changes depending on price and consumer income
E.g cars
What is an inferior good?
It is a good that demand dosent change depending on price or income
E.g pasta
What is a demand curve?
The amounts of a product that is demanded in the market at different price points
What are the four main causes of changes in supply?
Cost of production, External shocks, New technology and Taxation & Subsidies
what is a supply curve?
A line that shows the different combinations of quantity supplied and market price.
What is a subsidy
A sum of money given to a business by the government that doesn’t have to be paid back.
What is market equilibrium?
When there is a balance between supply and demand.
What is disequilibrium?
When the balance is not correct between supply and demand.
What is PED
This measures how demand is affected by a change in prce
What is YED
This measures how demand of a product is affected by a change in consumer income
How is PED measured
% Change in quantity demanded/
% Change in price
How is YED measured?
% Change in quantity demanded/
% Change in income
How do you interpret whether a product is price elastic?
If the value is more than 1 it is classed as elastic as the change in demand is more than the change in price
How do you interpret whether a product is income elastic
If a product is Price elastic then it is likely to be income inelastic
What is a luxury item
An item that is not needed and likely to be elastic
What is a necessity
An item that is needed and is likely to be inelastic
How does availability of substitutes affect PED?
If the product has lots of alternatives it is more likely to be inelastic
How does Brand strength affect PED
Products with a high brand loyalty tend to be more inelastic.
