Theme 1:Edexcel business A-Level Flashcards
market
market is any is any place where buyers and sellers can meet e.g. amazon.co.uk or a shopping mall
Market research
market research is the process of systematically gathering data from consumers which can be used to influence the business decisions
mass markets
products are aimed at broad market segments e.g Kellogg’s Corn Flakes is an example of a breakfast cereal aimed at the mass market
Market segments
Market segments are groups of consumers who share similar characteristics e.g. age, lifestyle, etc.
Mass marketing
occurs when businesses sell their products to most of the available market
niche markets
In niche markets, products are aimed at a subset of the larger market e.g. gluten free products
Niche marketing
occurs when businesses identify and satisfy the demands of a small group of consumers within the wider market
Sales volume
Sales volume is the number of products sold i.e the physical number of units sold
Sales revenue
Sales revenue = price x quantity sold i.e the financial value of the units sold
market share formula:
sales of a business/total sales in the market x100
brand
A brand is a name, image, or logo which helps one product/service stand out from its competitors
dynamic market
A dynamic market is a market that is subject to rapid or continuous changes
product differentiation
the process of distinguishing a product or service from competitors products in the market
monopoly power
a large business that dominates a market
Online retailing
Online retailing involves selling products via the internet
How markets change
Changing market conditions offer new opportunities for firms, but also pose threats
Product innovation
involves the adaptation or improvement of existing products e.g. improved video cameras on laptops
Process innovation
involves the adaptation or improvement of existing processes e.g. just in time stock control
Market growth
is the measurement of the change in the entire market, expressed as a percentage of the original size
Adapting to change
Recognizing and adapting to market changes allows businesses to thrive in dynamic markets
first mover advantage
a competitive advantage gained by being the fist business to introduce a new product/service to the market eg.Apple introducing touch screen phones
Competition
occurs when at least two businesses are providing goods/services to the same target market
Risk
is the potential threat to business success
Uncertainty
is when outcomes are difficult to predict
product orientation
is an approach to marketing that focuses on the characteristics of the product rather than the needs of the consumer
Market orientation
is an approach to marketing that focuses on the needs of consumers and uses this information to design products that meet customer needs
Primary research
Primary research is the process of gathering information directly from consumers in the target market using field research methods such as surveys, interviews, etc
Secondary research
involves the collection, compilation, and analysis of data that already exists
Market segmentation
is the process in which a single market is divided into sub markets or ‘segments’
Market positioning
refers to the process a business goes through when launching a new product or service
Market mapping
is a tool for identifying the position of a product within a market
Competitive advantage
refers to the features of a business and its products that are perceived as superior to its rivals by customers
Distinctive
means that it is different from the competitors
Defensible
means that the business can prevent competitors from copying it
Product differentiation
is an attempt by a business to distinguish its products from those of competitors
Adding value
s the difference between the price that is charged to the customer and the cost of inputs required to create the product or service
Demand
refers to the number of goods/services customers are willing to buy at a given price
Supply
is the number of goods/services businesses are willing to sell at a given price in a specific time period
market
is any place that brings buyers & sellers together to trade at an agreed price
Price elasticity of demand
a metric that calculates how responsive quantity demand is to change in price(elastic or inelastic.
PED formula
% change in quantity demanded / %change in price
change
new value-old value/old value x100
price skimming strategies
the selling prices is initially set as high as possible and then gradually lowed over a period of time.mostly used when companies have a strongly established brand identity
competitive advantage
when prices for products are set based on competitors prices
Income elasticity of demand (YED)
The Income elasticity of demand (YED) reveals how responsive the change in quantity demanded is to a change in income
Production planning
A business needs to plan how much it is going to produce which will help it determine the number of resources such as raw materials and labour it will need
The marketing mix
provides a framework for businesses to create and implement successful marketing strategies
4Ps of marketing
4Ps represent the key elements of a marketing strategy: product, price, place, and promotion
product design mix
refers to the combination of elements that make up a product’s design
function
product refers to its intended purpose and the specific tasks it is designed to perform
Aesthetics
refers to the product’s visual and sensory appeal, including its form, shape, colour, and texture
Cost
The cost of production must be considered when designing a product, as it directly affects the price point at which it can be sold
Social trends
refer to changes in attitudes, behaviours and lifestyles of people
Promotion
is an important element of the marketing mix as it plays a crucial role in generating customer awareness, interest and desire for a product/service
Branding
s the process of creating a unique and identifiable name, design, symbol, or other feature that differentiates a product/service or company from its competitors
Manufacturer/Corporate branding
This refers to the use of a company name or logo to promote all the products or services offered by the company.This type of branding is used by companies like Nestlé, Nike, and Apple
Product branding
This refers to the use of a unique name, design, or symbol to promote a specific product
E.g. KitKat, Coca-Cola, and McDonald’s Big Mac
Own brand or private label branding
refers to the use of a retailer’s name to promote a specific product or service and is often used by supermarkets
E.g. ASDA chocolate, Tesco’s Finest range, and Sainsbury’s Basics range
Distribution channels
refer to the various intermediaries through which goods/services move from the manufacturer to the end customer
The product life cycle
describes the different stages a product goes through from its conception to its eventual decline in sales
cash flow
the movement of money into and out of a business over time
Extension strategies
refer to the techniques used by businesses to extend the life of a product beyond its natural life cycle
Boston Matrix
is a tool used by businesses to analyse their product portfolio and make strategic decisions about each product
market share
the percentage of total market revenue that a single firm has e.g. costa had an 8%market share of ‘out-of-home’ coffee in the uk in 2020.
market growth rate
refers to how quickly the market a whole is growing.
Business to Business (B2B)
B2B marketing focuses on selling products to other businesses e.g. software companies selling to other businesses; manufacturers selling parts to other manufacturers
Business to Consumer (B2C)
B2C marketing focuses on selling products/services directly to consumers e.g clothing retailers
salary
is a fixed amount of money that an employee receives on a regular basis,typically monthly or annually.
wage
an hourly rate of pay that an employee receives for the hours they work.typically paid to staff who work as manual labour,customer service or retail assistants
redundancy payments
where a job role is no longer needed by a business and a worker is dismissed,usually with compensation.
minimum wage
the lowest wage that employers can legally pay their employees
zero hour contracts
a contract where employer does not guarantee the work many hours of work,but the employee has to be on call in case they are needed
Flexible working
is the development of a culture where workers are equipped to do different roles or where they work in a range of employment patterns
Multi-skilling
is the process of training workers to fulfil multiple job roles within a business
productivity
measure of labour efficiency and can be calculate by dividing total output by the number of workers employed
part-time
may only work two or three days a week
outsourcing
when a business process is contracted out to another companye.g.one company hires another company to manufacture products.
Dismissal
is the termination of employment by an employer against the will of the employee
Recruitment
is the process of attracting and identifying potential job candidates who are suitable for a particular role
A job specification
outlines the qualifications, skills, experience, and personal qualities required from a candidate for a specific job e.g. problem solver, good communicator, able to code in Java etc.
A job description
outlines the duties, responsibilities, and requirements of a particular job
Internal recruitment
is the process of hiring employees from within the organization
External recruitment
is the process of hiring employees from outside the organization
Induction training
is a type of training that new employees receive when they start working for a company
On the job training
A type of training that takes place while employees are working in their job roles
Off the job training
A type of training that takes place outside of the workplace
Hierarchy
A hierarchy refers to the levels of authority within an organization
Chain of command
The chain of command is the formal line of authority that flows down from the top management to lower-level employees
Span of control
Span of control refers to the number of employees that a manager or supervisor can effectively manage
Centralised
In a centralised structure, decision-making authority is concentrated at the top of the organization with senior management making most of the decisions
decentralised structure
decision-making authority is distributed throughout the organization, with lower-level employees having more decision-making power
Motivation
efers to the inner desire or willingness that propels a person to take action and achieve a specific goal or outcome
Leadership
is about having a vision, sharing that vision with others and providing direction
Management
Management is the day-to-day organisation of the business, its resources and its staffing
Autocratic leadership
leader has complete control over decision-making with little or no input from others
Paternalistic leadership
leaser takes on a parental role,making decisions in the best interest of their staff
Laissez-Faire
leader takes a hands-off approach and allows their team to manage their own work
entrepreneur
An entrepreneur is a person who is willing and able to create a new business idea or invention and takes risks in pursuing success
Intrapreneurship
Intrapreneurship refers to the practice of promoting entrepreneurial thinking and behaviour within an existing business
dividends:
a sum of money paid each year by a company to its shareholders from its profits.
profit maximisation
Profits benefit shareholders as they receive dividends & also increase the underlying share price
sole trader
a firm that has a single owner who makes all the decisions and gets to keep all the profits.the owner is legally responsible for all debts of the business
limited liability
a legal structure in which the assets of the owners are considered to be seperate to those of the business.if the business is sued the owners cannot lose their own possessions
venture capitalists
specialist investors in a small to medium sized business that have significantly potential for growth e.g.in the technology sector venture capitalists usually require a take in the business in return for finance and often expecc to exert some control over the business
Franchising
Franchising is a business model where an individual (franchisee) buys the rights to operate a business model, branding, and support from a larger company (franchisor) in exchange for an initial lump sum plus ongoing fees
social enterprise
A social enterprise is a business that has the primary purpose to create social or environmental impact (in addition to generating profits)
stock market floatation
occurs when a business become a public limiting company and seksto raise cpaital by selling shares to the public on a stock exchange such as london’s stock exchange.
TOpportunity cost
is the loss of the next best alternative when making a decision
