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Business > Theme one > Flashcards

Theme one Flashcards

1
Q

What is a mass market?

A

A large sector of a market aimed at a wide range of customers.

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2
Q

What are the advantages of operating in a mass market?

A

Economies of scale.
Low prices for customers.
More potential customers.
High sales.

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3
Q

What are the disadvantages of being in a mass market?

A

More competition.
Low prices mean lower profit margins.

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4
Q

What is a niche market?

A

A very small sector of the market where products are aimed at specific consumers.

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5
Q

What is a generic brand?

A

Brands that are so well known that customers say the brand when they mean the product.

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6
Q

What is product differentiation?

A

The extent to which consumers perceive your brand as being different from others.

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7
Q

What is market orientation?

A

When the business focuses on the needs of customers before making any decisions. Puts the customer at the heart of the decision making process.

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8
Q

What are the disadvantages of market orientation?

A

Reduces the scope of innovation within the business.
Customer needs can change rapidly which may be hard for the business to adapt to.

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9
Q

What is product orientation?

A

When the business focuses on what the firm does best instead of its customers. Best way to increase sales is to improve the product.

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10
Q

What are the disadvantages of product orientation?

A

Ignores customer needs so customers may not be interested in what the business is selling.
Costs a lot to improve the product.
If the business does not have a good reputation, customers may not trust them.

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11
Q

What are the benefits of primary research?

A

Can aim questions directly at your objectives.
Latest information from the workplace.

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12
Q

What are the disadvantages of primary research?

A

Expensive
Risk of questionnaire and interviewer bias.
May only be usable if comparable back data exist.

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13
Q

What are the benefits of secondary research?

A

Cheap.
Good overview of a market.
Usually based on actual sales figures or research on large samples.

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14
Q

What are the disadvantages of secondary research?

A

Data may not be updated regularly.
Not tailored to your own needs.
Expensive to buy reports on many different marketplaces.

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15
Q

What is price elasticity?

A

A measurement of the extent to which a product’s demand changes when its price changed.

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16
Q

How do you calculate price elasticity?

A

%change in quantity demanded
over
%change in price

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17
Q

What is income elasticity of demand?

A

The extent to which demand changes when there is a change in incomes.

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18
Q

What is negative income elasticity?

A

A product for which sales fall when people are better off but rise when people are worse off.

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19
Q

What is positive elasticity?

A

A product for which sales rise when people are better off.

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20
Q

What is sustainability?

A

Making something using raw materials that will still be around for future generations.

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21
Q

What is branding?

A

The skill of giving a product or service distinctiveness, even personality.

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22
Q

What is emotional branding?

A

When the business focuses on the emotional state of the customer and tries to build a connection with them.

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23
Q

What is capacity utilisation?

A

This measures the actual usage of your facilities as a percentage of the maximum possible.

24
Q

What is a corporate brand?

A

A brand that represents the whole company as well as its products.

25
Q

What is price skimming?

A

This is used when the product is innovative. As the product is new, it can be set at a high price. Customers who are interested in this product will pay the high price which will help to cover development costs. The business can then lower prices if sales become stagnant.

26
Q

What is penetration pricing?

A

Used when launching a product into a large market. Price is set lower to gain market share and once it is established, it can raise prices. It is hoped that high levels of initial sales will cover development costs.

27
Q

What is competitive pricing?

A

When price is set at the market level or at a discount to the market.

28
Q

What is predatory pricing?

A

Pricing low enough to drive a rival or rivals out of business. Having eliminated competition, prices can be raised.

29
Q

What is psychological pricing?

A

Charging something for 99p instead of £1. Business believe that there are psychological price barriers. Price elasticity will be higher in changing from 49p to 50p than it is from 48p to 49p.

30
Q

What is impulse purchasing?

A

Buying in an unplanned way

31
Q

What is opportunity cost?

A

The cost of missing out on the next best alternative when making a decision.

32
Q

What is a wholesaler?

A

The middleman between the producer and retailer, who breaks bulk down from container lorry-loads into manageable parcels.

33
Q

What are the stages of the product life cycle?

A

Development
Introduction
Growth
Maturity
Decline

34
Q

How can a business achieve a more flexible workforce?

A

Multi skilling - when workers are given the scope and ability to carry out a variety of tasks.
Part-time and temporary
Flexible hours and home-working

35
Q

What is a flexible approach?

A

An approach to operations that ensures that the business can quickly adapt to a firm’s changing requirements.

36
Q

What are the advantages of internal recruitment?

A

It is likely to be quicker and cheaper.
Greater variety and promotion opportunities may motivate employees.
Avoids the need and cost of induction training.
The firm will already be aware of the employee’s skills and attitude to work.

37
Q

What are the disadvantages to internal recruitment?

A

May not have the skills required, especially if the business wants to develop new products or markets.
Relying on existing employees may lead to a stagnation of ideas and approaches within the business.
It may create a vacancy elsewhere, postponing external recruitment rather than avoiding it.

38
Q

What is on the job training?

A

Employees acquire or develop skills without leaving their usual workplace, perhaps being guided through an activity by a more experienced member of staff.

39
Q

What are the benefits of on the job training?

A

Faster training with real life experiences.
Faster adaptation to the workplace.
Maintains productivity for the business.
Saves the time and cost of sending people out.

40
Q

What are the drawbacks of on the job training?

A

Less knowledge acquired on methods used elsewhere.
May not carry out jobs correctly.
Dependent on the quality of the trainer.

41
Q

What is off the job training?

A

Where employees leave their normal place of work in order to receive instruction, either within the firm or by using an external organisation such as college or university.

42
Q

What is a centralised and decentralised structure?

A

Centralised - decision making made at the top.
Decentralised - delegated decision making to workers lower down the organisation.

43
Q

What are the advantages of a narrow span of control?

A

Allows close management supervision.
Communications may be excellent withing a small, immediate team.
Many layers of hierarchy may result in promotion chances occurring regularly motivating staff.

44
Q

What are the disadvantages of a narrow span of control?

A

Workers may feel over-supervised and therefore not trusted.
Communication may suffer if there are lots of layers for messages to get through.
Restricts scope for initiative and experiment, boss is always looking over your shoulder

45
Q

What is a matrix structure?

A

Where staff work in project teams in addition to their responsibilities within their own department. Therefore, staff can be answerable to more than one boss.

46
Q

What are the advantages of a matrix structure?

A

Working together should avoid each function trying to win by getting its own ideas at the forefront.
Working together should avoid hold ups leading to a competitive advantage.
Enriches the experience of every team member as they learn the views of those from other departments.

47
Q

What are the disadvantages of a matrix structure?

A

Decision making could take longer if they struggle to agree.
Each matrix member will now have two bosses causing confusion.

48
Q

What is Talyor’s scientific management theory?

A

Money is the main motivation for workers.

49
Q

What was Mayo’s human relation theory?

A

Views employees as social beings with unique needs and behaviors, rather than mere economic entities. Emphasises how job satisfaction leads to greater motivation and productivity.

50
Q

What is Maslow’s hierarchy of needs?

A

Self actualisation - scope to develop new skills
Esteem needs - recognition of achievement
Social needs - team working
Safety needs - job security
Physical needs - pay levels

51
Q

What are Herzberg’s motivators in his two factor theory?

A

Achievement
Recognition for achievement
Meaningful, interesting work
Responsibility
Advancement

52
Q

What are Herzberg’s hygiene factors?

A

Company policy and administration
Supervision
Pay
Interpersonal relations
Working conditions

53
Q

What is a paternalistic manager?

A

A manager that thinks and acts like a father. Tries to do what is best for their staff. Believes that employees need direction but thinks it is important to treat them well. Quite autocratic.

54
Q

What is a Laissez faire approach?

A

When managers are so busy or lazy that they do not take the time to ensure that junior staff know what to do or how to do it.

55
Q

What is staff retention?

A

Retaining staff, usually measured as staff still remaining at the end of the years as a percentage of the total workforce

56
Q

What is liquidation?

A

Closing the business down by selling off all the assets, paying debts and returning what is left to the shareholders.

57
Q

What is liquidity?

A

The ability of a business to pay its bills on time, which all depends upon having enough cash in the bank.

Business (5 decks)

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