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Business > Theme 1: Marketing and People > Flashcards

Theme 1: Marketing and People Flashcards

1
Q

Mass Market

A

the largest part of the market where products are produced in large quantities and customers have general wants and needs.

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2
Q

Niche market

A

A small and specialised segment of a larger market where customers have more specific wants and needs and products are produced in smaller quantities.

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3
Q

Mass marketing

A

To sell products to as many people as possible

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4
Q

Market Size formulae

A

Sales Volume: Units sold
OR
Sales revenue: Units sold x Price

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5
Q

Market share

A

Business sales/ Total market sales x 100

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6
Q

Dynamic market

A

A market subject to continual, rapid and fundamental change over a short time period.

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7
Q

Market growth formulae

A

Increase in sales/ original sales x 100

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8
Q

Innovation

A

Being crucial in a dynamic market, a new idea or invention launched onto the market, increasing competetiveness and marker share.

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9
Q

Brand

A

A unique design/sign/symbol/words/logo that distinguishes it from its competitors.

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10
Q

Brand Personality

A

A set of human characteristics associated with the brand name.

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11
Q

Difference between risk and uncertainty

A

Risk can be quantified but uncertainty cannot.

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12
Q

Market research

A

Gathering, presenting, and analysing information about products and customers.

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13
Q

Product Orientation

A

Develops products based on what it is good at doing, with a focus on quality and design performance.

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14
Q

Market Orientation

A

The business finds out the needs and wants of the customers and meets customer requirements.

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15
Q

Primary market research

A

Collection of first-hand data. Surveys, focus groups, interviews

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16
Q

Secondary market research

A

Collection of second-hand data. Published market research reports, Online (Statista), Government statistics (O.N.S), Trade publications.

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17
Q

Quantitative research

A

Numerical data. Easier and cheaper than qualitative research, through methods such as brief questionnaires or visits to potential competitors

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18
Q

Qualitative research

A

Non-numerical data. Collected to find out motivations behind consumer behaviour and their opinions.

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19
Q

Random sampling

A

An individual is completely chosen by chance from a population

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20
Q

Quota Sampling

A

Divide population into groups then select representative respondents

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21
Q

Stratified Sampling

A

Quota then random

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22
Q

Test marketing

A

Selling a new product to a small section of the market to assess customer reaction

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23
Q

STPM process

A

Segmentation,
Targetting,
Positioning
Marketing MIx

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24
Q

Market segmentation

A

Dividing a market into specific parts that reflect different customer wants and needs

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25
Q

5 ways of market segmentation

A

Demographics
Income
Behavioural
Geographical
Lifestyle

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26
Q

Define Market Positioning and 2 ways to achieve it.

A

An effort to influence consumer perception of a brand or product, relative to the perception of that of competitors. It is achieved through product differentiation and adding value.

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27
Q

Market mapping

A

Illustrates the range of positions a product can take in a market, based on 2 dimensions that are important to customers (like price v quality). Can identify gaps in the market or help market repositioning as part of marketing strategy, and therefore useful for both start-up and established businesses.

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28
Q

Competitive advantage/ edge and how to achieve it.

A

A feature of a business or its products that allows it to have an edge over the competition, using differentiation. According to Porter’s generic strategy, cost or differentiation are sources of competitive advantage.

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29
Q

Differentiation and 3 benefits

A

Making a product stand out from competitors.
Benefits:
Source of competitive advantage
Brand loyalty
Add value to charge premium prices.

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30
Q

Added value

A

Difference between the price customer pays and cost of inputs.

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31
Q

Demand

A

The amount that customers are willing and able to buy at a given price over a period of time.

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32
Q

7 factors affecting demand

A

Price of substitutes and complementary goods
Consumer incomes
Fashion, tastes and preferences
Seasonality
Advertising and branding
Demographics
External shocks

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33
Q

Supply

A

The amount that producers are willing and able to produce at a given price over a period of time

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34
Q

Factors affecting supply

A

New technology
Indirect taxes
Government subsidies
Cost of production
External shocks

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35
Q

Types of market disequilibrium

A

Excess demand (Price < market clearing price)
Excess Supply (Price > market clearing price)

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36
Q

The formula of P.E.D

A

The responsiveness of demand to a change in price.
% Change in Q.D./ % Change in price

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37
Q

Types of coefficient of PED and what they mean

A

PED >1= price elastic
PED=1= unitary elastic
PED<1= price inelastic

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38
Q

Factors affecting P.E.D

A

Availability of substitutes
Necessity
Habit
Brand Strength
Time
Cost of switching
Proportion of income spent on the product

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39
Q

Y.E.D (Income elasticity of demand)

A

Measures the responsiveness of demand to changes in consumer income. % change in quantity demanded/%change in income

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40
Q

factors affecting Y.E.D

A

Luxury or necessity (Luxury=income inelastic)
Inferior or normal good (Inferior=negative YED= rise in income means fall in demand)
Changes in income

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41
Q

What decides if the sign of YED is negative or positive

A

Normal good= Positive YED
(Rise in income=rise in demand)
Inferior good= Negative YED
(Rise in income=fall in demand)

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42
Q

Why the sign in PED doesn’t matter but sign in YED matters

A

PED: IGNORE THE NEGATIVE SIGNS because the relationship is largely negative between price and demand
SIGN in YED indicates whether the type of good is normal or inferior.

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43
Q

What decides the VALUE of YED

A

Luxury or Necessity.
Necessity= income inelastic (YED<1)
Luxury=income elastic (YED>1)

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44
Q

Sign and Numerical value of PED and YED means?

A

Sign= positive or negative correlation
Numerical value= extent of change/ elasticity

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45
Q

Marketing

A

The process of identifying, predicting and satisfying customer needs

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46
Q

Design Mix

A

Aesthetics, Function, Costs

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47
Q

Extended Marketing Mix (7Ps)

A

Price
Product
Place
Promotion
People
Process
Physical environment

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48
Q

4 ways to adapt to social trends

A

Sustainable product design (concerns over resource depletion)
Waste minimisation
Re-use and recycling
Ethical sourcing

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49
Q

Define Promotional methods.

A

The way a business creates awareness for its product. To inform (awareness) and persuade (demand).

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50
Q

Above-the-line promotion (mass audience)

A

Advertising
Direct marketing (no middleman)

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51
Q

Below-the-line promotion

A

PR
Merchandising
sales promotions

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52
Q

Advertising

A

Paid-for communication aimed at spreading marketing message.

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53
Q

Sales promotion

A

A tactical strategy used at POINT OF SALE that uses material incentives to persuade customers to purchase.

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54
Q

Personal Selling

A

Personal selling is where businesses use people to sell the product after meeting face-to-face with the customer. The sellers promote the product through their attitude, appearance and specialist knowledge.

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55
Q

Brand

A

A unique design/sign/symbol/words/logo that differentiates it from its competitors.

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56
Q

Branding

A

Creating an image or name that gives a product a positive and recognisable identity, helping with promotion and increasing sales.

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57
Q

Advantage of Strong Branding

A

Higher brand loyalty= Less price elastic- higher prices can be charged= higher revenue

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58
Q

Brand extension

A

Adding new product category under the brand name.

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59
Q

4 Ways to build a brand

A

Exploit USP/ Differentiation
Advertising (inform and persuade)
Sponsorship (awareness)
Social media

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60
Q

3 Ways that branding and promotion reflect social trends

A

Viral marketing (word-of-mouth on internet)
Social media
Emotional branding

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61
Q

6 pricing strategies

A

Cost-plus pricing
Price skimming
Price penetration
predatory pricing
Competetive pricing
Psychological pricing

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62
Q

Price skimming

A

Setting an initial high price, to take advantage of those wanting to be the first ones to purchase.

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63
Q

Price penetration

A

Low initial price and accept short-term loss to build market share and loyalty before switching to a more profitable price.

64
Q

Predatory pricing

A

Setting low prices for a short period of time to force new and weak competitors out of the market

65
Q

Competitive pricing

A

Setting prices like competitors and what the market will bear, following the price leader

66
Q

5 Factors affecting pricing strategy

A

Amount of USPs/ Degree of differentiation
PED
Brand strength
Stage in Product life cycle
Costs and need to make a profit

67
Q

2 Social trends that affect pricing

A

E-commerce (pressure to keep low prices)
Price comparison sites (easier to find cheapest)

68
Q

Distribution

A

the way the product reaches the end consumer in the right place at the right time in the right quantities.

69
Q

Direct distribution

A

Producers and consumers deal directly with each other without the involvement of an intermediary (like a wholesaler, retailer, or distributor)

70
Q

Indirect distribution

A

Involves intermediaries between the producer and consumer.

71
Q

Term for using more than 1 channel of distribution

A

Multi-channel distribution

72
Q

How businesses adapt distribution to social trends

A

E-commerce= multi-channel distribution (brick-and-mortar and online)
Online banking services
Subscription plans for traditionally physical products like films

73
Q

Product life cycle

A

development, introduction, growth, maturity and decline

74
Q

Marketing Strategy

A

Methods used to achieve marketing objectives

75
Q

Extension Strategy

A

Aimed at delaying the decline stage of a product’s sales in the medium-to-long term.
Lowering price
Redeveloping product
New promotional method
New distribution channels
Market repositioning

76
Q

Product portfolio

A

The list of products sold by a business.

77
Q

Boston Matrix

A

A method used to analyse the product portfolio of a business
by placing products according to market growth and market share

78
Q

Marketing strategy in niche markets?

A

FOCUS on differentiation by quality or customer service

79
Q

Marketing strategy in mass markets

A

Ensure the price is as competitive as possible and reaches all potential customers.

80
Q

3 ways to develop customer loyalty

A

Quality
Physical environment
Customer service
Loyalty schemes
Branding

81
Q

Staff as an asset

A

Treating employees as an important resource and source of competitive advantage

82
Q

Staff as a cost

A

Treat employees as resources to be exploited.

83
Q

Flexible workforce

A

Employees have choices over how and when they work

84
Q

Multi-skilling

A

Staff are trained to have more than one skill set and carry out a variety of tasks, enabling job rotation

85
Q

Part-time staff

A

work fewer hours than a full-time emoloyee

86
Q

Temporary staff

A

Work for a specific period of time like peak periods

87
Q

Flexible hours and flexible working

A

e.g., work from home

88
Q

Outsourcing

A

Delegating business processes to an external provider, who then owns, manages and administers the selected process to an agreed standard.

89
Q

Difference between dismissal and redunduncy

A

Dismissal: because of breach contract or other unacceptable behaviour or performance
Redundancy: An employee loses a job because the job is no longer required by the business. Requires redundancy payments.

90
Q

2 types of consultations in an employer-employee relationship

A

Individual approach
Collective bargaining (trade unions etc.)

91
Q

Internal recruitment

A

FIll a vacancy from within the existing workforce

92
Q

External recruitment

A

Filling a vacancy from outside the business. Job centres, job advertisements, headhunting, recruitment agencies

93
Q

On-the-job training vs Off-the-job training.

A

On-the-job: Where employees learn skills whilst remaining in the workplace doing their job.
Off-the-job: where employees learn skills away from the workplace.

94
Q

Specific training that new employees receive when joining a business?

A

Induction training.

95
Q

Job rotation

A

the trainee is given several jobs to gain a wide range of experiences.

96
Q

Coaching

A

A more intensive method of training that involves a close working relationship between an experienced employee and the trainee

97
Q

Organisation sturcture

A

Shows who is answerable to whom in an organisation. It can also show vertical and horizontal communication links.

98
Q

Hierarchy

A

Structure and number of layers of management within an organisation

99
Q

Chain of command

A

Describes the line of authority within a business. Long vs Short.

100
Q

Span of control

A

Number of subordinates a manager is directly responsible for. Wide vs Narrow.

101
Q

Centralised vs decentralised organisational structure

A

Centralised: decision-making is kept at the top of the hierarchy
Decentralised: decision-making spread out to more junior managers in the hierarchy, and branches like retail outlets can make their own decisions.

102
Q

Term for where responsibility for carrying out a task or role is passed onto someone else in the business.

A

Delegation

103
Q

Tall organisational structure

A

One with many layers and a narrow span of control for each manager

104
Q

Flat organisational structure

A

One with few layers and a wider span of control for each manager

105
Q

3 Benefits of tall organisational structure

A

Closer supervision
More promotional opportunities
Improved Direct communication between managers and subordinates due to narrow span of control

106
Q

3 drawbacks of tall structure

A

Less delegation=less empowerment
More layers of staff=more costs
Slower vertical communication

107
Q

3 Benefits of flat structure

A

Greater delegation
Fewer layers of staff=saved costs
Faster vertical communication

108
Q

3 drawbacks of flat structure

A

Fewer promotional opportunities
Less supervision=mistakes

109
Q

Matrix structure

A

Employees work across teams and projects as well as within their own department

110
Q

Benefits of Matrix structure

A

Improve communication between departments
Sharing of good practices between departments
Employees can use their skills in a range of context
Greater motivation in teams

111
Q

Drawbacks of Matrix Structure

A

Divided loyalties as employees have two line managers (department and also team leader)
Team members neglecting functional responsibilities
Difficulty to co-ordinate

112
Q

6 benefits of motivation to business

A

Increased productivity
Lower turnover
Lower absenteeism
Better customer service
Better quality
Greater employee loyalty

113
Q

4 motivation theories

A

Taylor (scientific management)
Mayo (Human relations theory)
Maslow (hierarchy of needs)
Herzberg (2-factor theory)

114
Q

3 key points of Taylor’s theory

A

Motivated by pay
Piece rate increases productivity
work should be broken down into smaller tasks that can be specialised

115
Q

4 key points from Mayo’s theory

A

Workers are motivated by having their social needs met at work
More freedom and two-way communication
Greater attention from managers
Working in teams

116
Q

Maslow’s hierarchy of needs

A

Physiological
Safety
Social
Esteem
Self-actualisation (TOP)

117
Q

What are the factors from Herzberg’s theory

A

Hygiene factors (prevent unhappiness but does not motivate)
such as pay, working conditions

Motivators
such as increased responsibility, recognition, achievement

118
Q

5 financial incentives to improve employee performance

A

Piecework
Commission
Bonus
Profit sharing
Performance-related pay

119
Q

8 non-financial incentives to improve employee performance

A

Delegation
Consultation
Empowerment
Team working
Flexible working (multi-skilling, part-time, temporary working, and flexible hours)
Job enrichment (more challenging and interesting tasks)
Job enlargement (more tasks of a similar level)
Job rotation (between roles)

120
Q

Managers vs Leaders

A

Managers: Allocate resources and make decisions to meet business objectives.
Leaders: Inspiring followers, building relationships, creating a vision and setting goals.

121
Q

Autocratic leadership

A

Autocratic leadership assumes that decision-making is best kept with managers, with one-way communication and little consultation with subordinates.
Suits businesses with high staff turnover and fast-paced businesses.

122
Q

Democratic leadership

A

Employees are more involved in de-centralised decision-making. It involves consultation and delegation between managers and subordinates.

123
Q

Paternalistic leadership

A

Softer version of autocratic leadership.
Parent/child relationship, but the leader decides what is best for employees with little delegation.
Linking to Mayo’s human relations theory.

124
Q

Laissez-faire leadership

A

The leader has next to zero input into day-to-day decision-making. Great delegation and freedom.

125
Q

Entrepreneur and 3 roles.

A

A person who takes risks and combines factors of production (land, labour and capital) to set up a business.
3 Roles:
* Setting up, running and developing a business,
* innovation within a business (intrapreneurship),
* anticipating risk and uncertainty

126
Q

Intrapreneurship and why is it easier than entrepreneurship?

A

Entrepreneurial activity (innovation) within a business that takes risks and leads to the creation of new parts or products of the business or even a whole new business. (support makes intrapreneurship easier than entrepreneurship outside of business)

127
Q

2 key financial motives for an entrepreneur

A

Profit maximisation
Profit satisficing (only enough to have a fairly good standard of living)

128
Q

Business objectives

A

A short-term goal/target (1) set by the business to help achieve its long-term aim/mission (1)

129
Q

Social enterprise

A

A business that has objectives which benefit society (1) and its profits are reinvested into the community (1).

130
Q

Corporate strategy vs marketing strategy

A

overall policies used by a business to achieve the desired long-term aim
whilst the Marketing strategy aims to increase sales

131
Q

2 most common business objectives

A

Survival and profit maximisation

132
Q

6 other possible business objectives

A

Sales maximisation
Market Share maximisation
Cost efficiency/cost minimisation
Employee welfare
customer satisfaction
social objectives

133
Q

Unincorporated

A

The owner is the business, unlimited liability for business actions, and most act as sole traders.

134
Q

Incorporated

A

the company has a separate legal identity, owners have limited liability, and most operate as private limited companies.

135
Q

Limited liabilities

A

Liability in a company is confined to the amount invested in the company

136
Q

Unlimited liabilities

A

The owner’s liability for the debts of the business is not confined to the amount invested.

137
Q

3 Pros for a sole trader

A

Quick and easy to set up with minimal paperwork– can always be transferred to a limited company once launched
Control over decision-making
Owner can keep profits or reinvest without consultation

138
Q

3 cons for sole trader

A

Unlimited liability
Limited source of finance
More stress and responsibility– long-term illness=death of company

139
Q

Define sole trader

A

An individual who fully owns the business with unlimited liability
Can employ people however their employees cannot own any part of the business.

140
Q

Define partnership

A

A business which is started and owned by more than one person, and owners have unlimited liability. There will be an agreement on decision-making, how profits are shared; what the partners have to invest etc.

141
Q

Pros of partnership

A

Minimal paperwork
partners can provide specialist skills
a wider source of finance than a sole trader

142
Q

Private Limited Company

A

an incorporated business, which is a separate legal entity, run by the family that owns it. shareholders are known to the company and shares are not sold on the stock exchange. Owned by shareholders, and run by a board of directors.

143
Q

3 Pros of Private Limited Company

A

Limited liability
Wider source of finance than a partnership (shares)
Stability: exist even when shareholders change

144
Q

3 Cons of Private Limited company

A

Limited source of finance compared to Public limited company (Shares cannot be traded publicly)
Greater administration costs compared to partnership
Public disclosure of company information

145
Q

Public Limited company

A

Shares can be traded on the stock exchange and normally have a substantial number of shareholders. Subject to a lot more scrutiny compared to most other businesses.

146
Q

Pros and cons of Public limited company

A

Pro: substantial share capital, limited liability, raises its profile

Cons: high takeover risk, loss of control to shareholders, increased scrutiny of financial performance (public disclosure of info)

147
Q

Franchises

A

Where a franchisor grants a licence (franchise) to another business (franchisee) to allow it to trade using the business format.

148
Q

Benefits to franchisor

A

Rapid geographical growth for minimal investment
Can cream-off the “above normal” profits

149
Q

2 Pros for franchisee

A

Tested and developed business format and brand= easy success
Support and training provided

150
Q

2 cons for franchisee

A

Costly initial fees like royalties
Restrictions on decision-making due to the business model

151
Q

Lifestyle Business

A

Profit satisficing (make a living only)
while still allowing owner flexibility to do their own hobbies like travelling

152
Q

Process for conversion of private to public limited company

A

Stock market flotation

153
Q

Opportunity cost

A

The cost of making one choice in terms of the next best alternative forgone.

154
Q

Trade-off

A

Having more of one thing(benefit) means less of another due to scarcity of resources.

155
Q

Trade-off

A

Having more of one thing(benefit) means less of another due to scarcity of resources.

Business (3 decks)

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