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Business > Theme 1 Key Words > Flashcards

Theme 1 Key Words Flashcards

1
Q

Niche Market

A

Small area of the market with specific needs for specialised products or services. Addresses needs not being addressed by others. E.g. high quality chocolate

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2
Q

Mass Market

A

Large market where most people tend to buy same or similar products. E.g. laundry detergents

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3
Q

Market Size

A

Measured by either value or volume. Total sales of all producers

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4
Q

Market Share

A

Amount sold by a single business as a percentage of total market

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5
Q

Dynamic Market

A

Constantly changing market. Can be due to rising incomes, fashions or arrival of a superior competing product

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6
Q

Innovation

A

Bringing a new idea into existence and using it

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7
Q

Product Innovation

A

New technologies make it possible to create new products or to improve quality of existing ones

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8
Q

Process Innovation

A

Using new technology to improve production methods, so that costs are reduced. Change is often invisible to consumers, but it may result in price cuts

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9
Q

Competition

A

Lower prices, better quality, more choice, innovation, greater efficiency

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10
Q

Risk

A

Situations where the outcomes are known and can be quantified

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11
Q

Uncertainty

A

Where events are unpredictable. Caused by factors outside the control of the business

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12
Q

Product Orientation

A

Business will focus its efforts upon creating the product rather than responding to market needs. Make the product first then sell it. E.g. iPhone

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13
Q

Market Orientation

A

Business will focus on customer preferences and needs and responds to their needs. Involves expensive market research

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14
Q

Primary Research

A

Collecting new data first hand from original sources. E.g. questionnaires and in-depth interviews

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15
Q

Secondary Research

A

Gathering data from existing online and paper-based sources. E.g. government statistics

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16
Q

Quantitative Research

A

Analysis of numerical data

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17
Q

Qualitative Research

A

Customers’ genuine opinions. Aims to understand customer behaviour

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18
Q

Bias

A

If the sample includes disproportionate number of people from a particular market segment

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19
Q

Market Segmentation

A

An identifiable group of individuals where consumers share one or more characteristics/needs E.g. income level or gender

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20
Q

Product Differentiation

A

Distinguishing a product from competitors to make it more attractive to particular markets. Reduces PED

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21
Q

Market Map

A

Plots brands in the market according to how they meet customers’ needs. It uses two sets of criteria such as quality and prices

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22
Q

Competitive Advantage

A

Having an edge over rival products. May be based on low costs and keen prices or an innovative design feature

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23
Q

Adding Value

A

Difference between selling price and costs of its material inputs

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24
Q

Unique Selling Point

A

Distinctive feature that no competing product can match precisely

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25
Q

Supply

A

Amount of a good or service that producers are willing to provide at a given cost

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26
Q

Equilibrium Point

A

The quantity demanded is the same as the quantity supplied. There will be no unsold products

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27
Q

Elasticity

A

Responsiveness to change

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28
Q

Price Elasticity of Demand

A

Responsiveness of (quantity) demanded to a change in price

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29
Q

Price Elastic

A

Price Change causes proportionately bigger change in quantity demanded. Beyond -1

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30
Q

Unit Price Elasticity

A

Price change causes same change in quantity demanded. -1

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31
Q

Price Inelastic

A

Price change causes proportionately smaller change in quantity demanded. -1<x<0

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32
Q

Income Elasticity of Demand

A

Responsiveness of (quantity) demanded to a change in income

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33
Q

Income Elastic

A

Income change causes proportionately bigger change in quantity demanded. x>1

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34
Q

Unit Income Elasticity

A

Same proportional change in quantity demanded and income. x = 1

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35
Q

Income Inelastic

A

Income change causes proportionately smaller change in quantity demanded. 0 < x < 1

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36
Q

Luxury Good

A

Demand increases as income increases. E.g. Jaguar

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37
Q

Inferior Good

A

Demand decreases as income increases. E.g. Aldi Baked Beans

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38
Q

Design Mix

A

Function, Aesthetics, Cost

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39
Q

Social Trends

A

Way society as a whole behaves

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40
Q

Brand

A

A characteristic/name/symbol that differentiates/distinguishes a product from other suppliers

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41
Q

Promotion

A

Inform customers and potential customers about the product or service. Creates demand and awareness for their products

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42
Q

Product Branding

A

Single product is recognised by that name

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43
Q

Personal Branding

A

Individuals who have become their own brand

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44
Q

Viral Marketing

A

Strategy that encourages individuals to pass on a marketing message to someone else. Youtube has been very useful for this

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45
Q

Emotional Branding

A

Creation of brands that appeal to a customer’s emotional nature rather than their logical side

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46
Q

Pricing Strategies

A

range of ways in which a business might decide on the price of its product/service

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47
Q

Cost Plus Pricing

A

Adding certain percentage to the average total cost of the product

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48
Q

Premium Pricing

A

Ability to charge higher price than competition without losing sales

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49
Q

Price Skimming

A

Charging a very high initial price for the product

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50
Q

Competitive Pricing

A

Charging about the same as, or a little less than, the prices of competing products

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51
Q

Penetration Pricing

A

Used to enter a new market. Lower price is used to gain customers and penetrate the market

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52
Q

Psychological Pricing

A

Used to make the price seem more attractive than it really is

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53
Q

Predatory Pricing

A

Prices set at a very low level, possibly even below costs of production, in order to destroy competition. Effective but illegal

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54
Q

Distribution Channel

A

Route taken by the product as it moves from the producer to the customer

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55
Q

Product Life Cycle

A

Shows different stages that a product passes through. Development, Introduction, Growth, Maturity, Decline

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56
Q

Extension Strategies

A

Used when sales are slowing. This could be re-launching the product or re-branding

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57
Q

Product Portfolio

A

Range of products that a business produces

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58
Q

Boston Matrix

A

Analyses company’s products in terms of market share and growth potential

59
Q

Star

A

Product with significant market share in a fast growing market

60
Q

Problem Child

A

Small share of fast growing market. Need to be promoted or adapted to fit customer requirements more closely

61
Q

Cash Cow

A

Large share of a slow growing or static market. Sells very well and doesn’t require much promotion

62
Q

Dog

A

Low share of low growth market. Best strategy is usually to discontinue production

63
Q

Business To Business

A

Process of selling products or services to other businesses

64
Q

Business To Consumer

A

Involves selling directly to customers who are buying products or services for personal use

65
Q

Marketing Objectives

A

Longer term marketing goals and targets

66
Q

Flexible Workforce

A

Workforce that can adapt quickly, e.g. to a sudden change in customer demand

67
Q

Multi-skilling

A

Practice of training employees so that they can do a range of tasks

68
Q

Flexible Hours

A

Requires the employee to work a certain number of hours in a given time period but the employees can choose their own hours

69
Q

Outsourcing

A

Where business tasks or processes are undertaken by an external provider

70
Q

Dismissal

A

The worker is sacked

71
Q

Redundancy

A

When the worker’s skills are no longer of use to the business

72
Q

Individual Approach

A

Direct discussions between an employer and an individual

73
Q

Collective Bargaining

A

Discussions between employers and representatives of employees, often a trade union

74
Q

Internal Recruitment

A

Potential applicants are found within the organisation

75
Q

External Recruitment

A

Potential candidates are found from outside the organisation, either by advertising or using recruitment agencies

76
Q

Labour Turnover

A

Rate at which staff leave the business

77
Q

Induction

A

Training given to new employees to familiarise them with the work environment and the requirements of the job

78
Q

Organisational Structure

A

Framework which shows how a business arranges its lines of authority and communications

79
Q

Hierarchy

A

Employees are ranked in layers, one above the other, in a typical pyramid shape

80
Q

Delayering

A

Reducing the amount of middle managers

81
Q

Span of Control

A

Number of employees a manager is responsible for

82
Q

Centralised Structure

A

All decision-making is at the top of the hierarchy

83
Q

Decentralised Structure

A

Businesses have moved the decision making process away from a central head office and spread it throughout the organisation

84
Q

Matrix Structure

A

Individuals are assigned to teams according to their specialism

85
Q

Taylor Scientific Management

A

Close supervision and bonuses rewarded to more productive employees

86
Q

Mayo Human Relations

A

Focuses on addressing human needs, social and psychological factors

87
Q

Maslow Hierarchy of Needs

A

Self-Actualisation
Self-Esteem
Social Needs
Safety Needs
Basic Physical Needs for Survival

88
Q

Herzberg’s Two Factor Theory

A

Motivating factors and hygiene factors.
Hygiene factors can only dissatisfy employees if they are not met

89
Q

Delegation

A

Allowing decisions to be taken at a lower level

90
Q

Empowerment

A

Giving employees some discretion as to how they carry out their tasks

91
Q

Leadership

A

Art of motivating and organising a group of people to achieve a common goal

92
Q

Autocratic

A

Decision making is kept with managers who will direct subordinates with little consultation

93
Q

Democratic

A

Leading a business based on decisions agreed by a majority. Consults with subordinates

94
Q

Paternalistic

A

Behave like a parent might in making decisions by taking employee welfare into account. Consult early on and at every level and explain their reasons

95
Q

Laissez Faire

A

Set the initial agenda and then give staff complete freedom to complete the task

96
Q

Profit Maximisation

A

Achieved with biggest difference between sales revenue and cost

97
Q

Profit Satisficing

A

Making enough profit to continue in business. They may not be interested in taking on the additional risk and effort involved in maximising profits

98
Q

Business Objectives

A

Goals and Targets set by the business to achieve its aim/mission in the short/medium term

99
Q

Entrepreneur Characteristics

A

Hard work, motivation, risk-taking, initiative, creativity, resilience, perseverance, market understanding

100
Q

Sole Trader

A

Self-employed and runs his/her own business. Unlimited Liability

101
Q

Partnership

A

Two or more people working together. Unlimited liability

102
Q

Limited Company

A

Owned by its shareholders

103
Q

Opportunity Cost

A

Cost of giving up something in order to do or buy something else. The next best alternative forgone

104
Q

Trade-Off

A

A situation in which the benefits of one option are reduced in return for increased benefit of another option

105
Q

Factors of Demand

A

Population, Income, Tastes and Preferences, Complementary Goods, Substitutes

106
Q

online retailing/e-commerce

A

selling of goods or services over the Internet

107
Q

marketing strategy

A

Methods used to achieve marketing objectives

108
Q

Entrepreneur

A

A person who starts up and takes on the risk of a business for reward/profit

109
Q

Franchise

A

A business established or operated under an authorization to sell or distribute a company’s goods or services in a particular area in return for royalties

110
Q

Franchisee

A

an individual or business that is granted the right to sell another party’s product

111
Q

Franchisor

A

the originator of a trade name, product, methods of operation, and the like that grants operating rights to another party to sell its product

112
Q

Non-financial motivators

A

Promotion
Praise
Teamwork
Fringe Benefits
Job enlargement/ job rotation
Job enrichment

113
Q

Non-financial motivation

A

These methods refer to all those motivation methods that do not involve a financial reward or remuneration of any kind; e.g. empowerment, recognition, teamwork, etc.

114
Q

Financial Motivators

A

Commission
Piece Rate
Wages + Salaries
Performance Related Pay
Profit Share
Share Ownership

115
Q

Financial motivation

A

A form of motivation that is based upon the want to gain financial rewards for good performance.

116
Q

Ethical Sourcing

A

Using materials, components and services from suppliers that respect the environment, treat their workforce well and generally trade with integrity

117
Q

Cost minimisation

A

A strategy of achieving the most cost-effective way of delivering goods and services to the required level of quality

118
Q

market positioning

A

Influencing consumer perception of a brand or product, relative to competitors. Achieved through product differentiation and adding value

119
Q

Tall organisational structure

A

An organisational structure with a narrow span of control and many levels of hierarchy (a long chain of command)

120
Q

Flat organisational structure

A

An organisational structure that has a wide span of control, few management levels and a short chain of command

121
Q

Specialisation

A

In business, the production of a limited range of goods

122
Q

roles of an entrepreneur

A

Creating/setting up a business, running a business, expanding/developing a business, innovation, anticipating risk

123
Q

Offshoring

A

Moving operations from the country where a company is headquartered to a country where pay rates are lower but the necessary skills are available

124
Q

Market growth

A

An increase in the demand for a particular product or service over time

125
Q

On-the-job training

A

Learning skills whilst at work doing the job

126
Q

Off-the-job training

A

Internal or external training programs away from the workplace that develop any of a variety of skills or foster personal development

127
Q

Demand

A

the quantity of a good or service that consumers are willing and able to buy at a given price in a given period of time

128
Q

normal good

A

a good that consumers demand more of when their incomes increase

129
Q

inferior good

A

a good that consumers demand less of when their incomes increase

130
Q

corporate branding

A

Strategy that encourages a new product to be associated with a well-established company name. Can be used with any product that a business sells or a brand that represents the entire business

131
Q

own-brand products

A

products sold by retailers under their own name and logo

132
Q

job description

A

a written description of the basic tasks, duties, and responsibilities required of an employee holding a particular job

133
Q

Person specification

A

A detailed list of the qualities, skills and qualifications that a successful applicant will need to have

134
Q

Sales Maximisation

A

To achieve the highest achievable amount of sales either by volume or value

135
Q

Market Share

A

The goal of controlling a specified minimum share of the market for a firm’s good or service

136
Q

Cost efficiency

A

To control costs so that the maximum value of outputs is achievable with the lowest value of inputs. This is necessary to support an objective of profit maximisation

137
Q

Employee welfare

A

To look after the economic and physical well being of the workforce, a motivated workforce will increase productivity. Helps maintain positive employer/employee relations

138
Q

Customer satisfaction

A

To ensure that goods and services meets the needs and expectations of the customer. Helps to build a customer loyalty and repeat business maximizing sales in the long run

139
Q

Social Objectives

A

A goal to benefit the community. Likely to be non-financial, such as to reduce the carbon emissions of a business or improve the quality of life for a local community

140
Q

Survival

A

In some instances, profits, sales, and market share are less important objectives of the firm

141
Q

Social Enterprise

A

A business that has aim/objectives which benefit society and its profits are reinvested into the community

142
Q

Added value

A

the difference between the cost of purchasing raw materials and the price the finished goods are sold for

143
Q

customer loyalty

A

when customers buy a product from the same supplier again and again - sometimes paying even more for it than they would for a competitive product

144
Q

consultation

A

Employee feedback is sought when making decisions

Business (3 decks)

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