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Business > Unit 5: Business in Action > Flashcards

Unit 5: Business in Action Flashcards

1
Q

Idea Generation

A

an efficient method of gaining ideas for new products and services from sources internal or external to the business

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2
Q

Brainstorming

A

a creative technique used to generate new ideas; it can be done individually or as part of a group

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3
Q

Networking

A

people who share a profession orother intersts meetand echange information or ideas

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4
Q

Import subsitiution

A

a product that is currently being imported is substituted bt a home-produced product of a similar quality or price

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5
Q

Market Research

A

the systematic gathering, recording and ANALYSING OF IMPORTANT INformation about a specific market, including market trends. It gathers both quantitative data and qualitative data and is usded to identify and satisfy consumer needs in an informed and effective way

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6
Q

Primary (field) research

A

research based on primary sources of information i.e. information gathered directly from the marketplace (consumers or potential consumers). Field research involves going into the marketplace to gather new and detailed information first-hand from the target market

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7
Q

Questionnaires/surveys

A

individual consumers are approached and asked a series of specific questions about their opinions, tastes and behaviours. This can occur online, face toface, by post or by telephone. The questions are generally designed to have simple qualifiable answers

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8
Q

Focus groups/ customer panels

A

selected individuals are involved in discussions about the product or service and are asked a series of questions. There is face-to-face communication which allowes feedback and clarification of questions

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9
Q

Observation

A

trained staff observe the purchasing behaviour and patters of consumers in action

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10
Q

Mystery Shoppers

A

anonymous shoppersobserve from a customer’s point of view what kind of service they receive and how the business is run

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11
Q

Secondary (desk) research

A

research based on decondary sources of information i.e. assembling and examining information tha thas already been collected by others. INternal and external sources of information may be used in desk research

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12
Q

Product Screening

A

all ideas are vetted and the impractical or unworkable ideas are dropped, leaving the most viable ones for further examination and development

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13
Q

Concept development

A

the idea is turned into an actual product or service to meet the needs of consumers

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14
Q

Unique Selling Point (USP)

A

is a feature or features that differentiate the product from others on the market

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15
Q

Feasibility study

A

is carried out to assess whewhtther a product or service has real potential i.e. whether the product can be produced technically, will it be profitable, will meet government regulation and safety standards, will it be marketable

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16
Q

Prototpe development

A

a pre-production sample or mock-up of the product

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17
Q

Test marketing

A

a small-scale trial to identify possible faults and to assess consumer reaction. The product or service is tested on a sample of potential consumers before going into full production

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18
Q

Break-even analysis

A

a financial tool that helps a business to determine what stage the business will be profitable. It shows how many products the company should sell to cover its costs or ‘break even’

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19
Q

Fixed costs

A

costs that do not change with the level of production e.g. rent, loan repayments, insurance

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20
Q

Variable costs

A

costs that fluctuate/change diretly with the level of production e.g wages for labour, raw materials, energy costs

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21
Q

total costs

A

vc+fc

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22
Q

Selling price per unit (SP)

A

the price the consumer pays for a single product

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23
Q

Contribution per unit

A

SP- VC

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24
Q

Forecast Output

A

the number of units a business expects to sell

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25
Q

Breakeven Point (BEP)

A

the point at which total revenue matches the cost of making the product or providing the service

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26
Q

Margin of safety at forecat output

A

how far the sales can fall before the breakeven point is reached i.e. forecast output-bep

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27
Q

Break even point formula

A

FC / (SP-VC)

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28
Q

Margin of safety formula

A

Total Revenue - BEP

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29
Q

Marketing

A

the process by which a business identifies and anticipates consumer needs and produces goods and services to satisfy those needs profitably

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30
Q

Marketing concept

A

understanding the needs of wants of consumers in the market and adapting the business to deliver the right goods and services more effectively and efficiently than its competitors. Every effort is aimed at satisfying consumers wants profitably

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31
Q

Marketing strategy

A

aims to design and promote a product or service based on consumer needs as identified during the market research process

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32
Q

Marketing plan

A

a written plan that implments a business’ marketing strategy using the elements of the marketing mix in order to best achieve a business’ overall objectives

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33
Q

Market Segmentation

A

dividing up a broad target market into clearly identifian=ble groups of consumers, businesses, or countries that have common characteristics. Varying strategies cnathen be designed and implemented to target the different segments

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34
Q

Demographic segmentation

A

divides the market by one or many broad characteristics suhc as age, income, gender etc.

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35
Q

Geographic segmentation

A

uses basic geographic measures such as countries, states, cities. climate, population density to segment the market

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36
Q

Psychological segmentation

A

analyses consumer lifestyle, spending power and opinions or attitudes

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37
Q

Behavioural segmentation

A

analyses consumers according to their buying patterns or how they interact with the product

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38
Q

Target market

A

the specific group of people at whom a business aims a particular product or service. The target market may be characterised by age, income level, gender, loaction on lifestyle.

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39
Q

Niche Market

A

a group of consumers who have a more specialised nedd or want thatn the larger market

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40
Q

Product positioning

A

creating a lasting positive image of a product or service in the mind of the consumers in the target market

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41
Q

Marketing Mix

A

consists of the four elements a business can use to ersuade consumers to purchase its products (Product, price, place, promotion)

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42
Q

Product

A

a good or service produced by a business to satisfy a consumer’s needs or wants

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43
Q

Product portfolio

A

the range of products produced by a business

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44
Q

Product branding

A

creating an identity for a product or business that clearly distinguishes it from competitors, usually involving a brand name or logo

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45
Q

Brand name

A

a unique name that idenifies a product and the business that produces it e.g. Coca-Cola

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46
Q

Patent

A

a legal certification granted to the inventor that allows them to exclude all others from making, using, or selling that invention

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47
Q

Brand logo

A

a unique visual representation of the brand’s image. It should be easily recognisable and often includes the business name, symbol, specified colours or trademark

48
Q

Trademark

A

a legally registered symbol or word/s that cannot be used by others

49
Q

Brand slogan

A

a short, memorable phrase used to make a business stick in a consumer’s mind

50
Q

Own-brand products

A

products sold by retailers under the retailers own name and logo

51
Q

Product packaging

A

how the product is presented to the consumer. Functions are- attract customer, protect, inform, promote

52
Q

Product life cycle

A

describes the stages a product goes through from when it is first lauched to when it is finally withdrawn

53
Q

Product harvesting

A

selling a product tht is in decline for short-term gain without any expenditure on promotion

54
Q

Line-extension

A

the expansion of an existing product line

55
Q

price

A

the amount consumers pay for a prduct or service offered by the business

56
Q

High Price Strategy

A

business sets the price higher than competitors offering similar producrs on the market

57
Q

Premium Pricing

A

the price is set high to reflect a customers perception of a surperior product

58
Q

Price Skimming

A

a high price is set during the introductory phase to maximise profits and help cover RandD costs; the price is lowered when competitors products appear on the market

59
Q

Low price strategy

A

the business sets a relatively low price to stimulate demand and gain market share

60
Q

Penetration pricing/market share pricing

A

the price initially set lower than competitors prices to get a foothold in the market and capturemarket share from competitors e.g. ‘special introductory offers’

61
Q

Price discrimination

A

different market segments are charged different prices for the same product or service

62
Q

Predatory pricing

A

setting the price of a product or service at such a low level that other businesses cannot compete and are forced to leave the market

63
Q

Loss leader

A

the price of a product or service is deliberately set at a lower price thatn the business paid to buy or manufacture the product or than it cost to provide the service

64
Q

Psychological pricing

A

a pricing strategy based on the theory that certain prices have a greater psychological impact on consumers so that emotion may override common sense

65
Q

Cost-plus pricing (mark-up)

A

the price is calculated to cover costs (production, marketing, distribution) and include a fixed percentage profit margin

66
Q

Tiered pricing

A

consumers can choose the price that best fits their budget e.g. plane classes

67
Q

Bundle pricing

A

the business sells multiple items together for a lower price tha n it would cost separately

68
Q

Place

A

where consumers can find products or services sold by the business

69
Q

Channel of Distribution

A

the way that the product gets from the manufacturer to the consumer. (Direct selling, wholesaler, agent, retailers)

70
Q

Wholesaler

A

a business that buys products in large quantities from providers, stores them in warehouses and then sells the goods on to retailers e.g. Musgraves

71
Q

Retailer

A

a business that sells goods to consumers in small quantities

72
Q

Agent

A

a business that acts as an extension of the producer and sells the products to the consumer

73
Q

Promotion

A

used to increase awareness among existing and potential customers about the brand and the products and services on offer

74
Q

Promotional mix

A

range of techniques used by the business to persuade consumers to buy their products. Elements are advertising, sales promotion, public relations and personal selling

75
Q

Advertising

A

Informs, persuades and reminds consumers about a product and its features

76
Q

Sales promotion

A

a short-term marketing incentive designed to attract consumers to buy a product or service. It can add to a products attractiveness and stimulate sales without direct advertising

77
Q

Public relations

A

all activities related to creating a good public image for the product or service amongst its stakeholders. This can take the form of press releases, press conferences or other activities where the media is given information about the business activities

78
Q

Personal selling

A

the process of person to person contact to persuade customers to purchase

79
Q

Ethics

A

moral principles that govern decent conduct, In business, behaving ethically is considered good business practice. Businesses should ensure their promotional mix is honest, fair and legal

80
Q

Advertising Standards Authority for Ireland (ASAI)

A

an independent self-regulatory body set up and financed by the advertising industry. Its objective is to ensure that all business marketing in Ireland is ‘legal, decent, honest and truthful’

81
Q

Methods of PR

A

publicity, sponsorship, celebrity endorsements

82
Q

Advantages of branding

A

recognition, consumer loyalty, premium price, easier to expand product line

83
Q

Sole trader

A

a business started, owned and controlled by one person. This person is entirely responsible for the business and runs the business under their own name or under a business name

84
Q

Partnership

A

a business structure with two to twenty owners who are in business together to make a proft. A partnership is similar to the sole trader ownership structure, but with more peopleinvolved

85
Q

Private limited company

A

a business owned by investors called shareholders who contribute funds or finance to the business. There can be between 1 and 149 shareholders

86
Q

Co-operative

A

a business enterprise that is democratically controlled and jointly owned by its members. Members have an equal say in how the co-op is run (one vote per member) and operate the business for their mutual benefit

87
Q

Job production

A

producing custom work , made to order to the cusomer’s specifications. Unique, bespoke items are produced by skilled employees

88
Q

Batch production

A

alimited number of identical good are manufactured at the same time. After one batch or group of products is produced, production switches to a different batch

89
Q

Mass (flow)production

A

continuous production of large amounts of standardised products, normally on assembly lineseg Kerry Foods Ireland

90
Q

Subcontracting/outsourcing

A

a business pays another business to produce a part or all of their product

91
Q

Business plan

A

a detailed written document setting out the aims and objectives of a business and how those will be achieved. It details who is setting up the business, what the product or service is, where it will be sold and how it is to be produced, marketed and financed

92
Q

Exuctive summary

A

the main elemnts of the plan in short form. It ‘sells’ the business and must keep the reader’s iterst in the plan. Man points such as the ability of the team orthe profitibility of the idea should be emphasised

93
Q

Key personnel section

A

covers details of the managemnet team e.g. experience and qualifications and the managment structure in place

94
Q

Financial analysis

A

shows projections for the future, including a realistic projected profit and lossaccount and balance sheet for three to five years ahead and cash flow forecasts showing inflows an outflows, including details of finance sourcesand finincial control

95
Q

Investment proposal

A

sets out the amount o capital sought after and the reasons why it is required, the type of funds sought (loan or equity) and details of any collateral on offer

96
Q

Conclusion

A

a summary of the main features of the enterprise with a AWOT anaysis and a proposed timeframe for implementation and decision making

97
Q

Appendices

A

contain more detailed information to support the main tex tof the business plan e.g. results of research, customer endorsements, company brochure

98
Q

Main body of a business plan

A

Description of the enterprise
Key Personnel
Market analysis
Marketing Strategies
Products or services
Manufacturing, operations and premises
Financial Analysis
Investment Proposal
Conclusion

99
Q

EXP Defensive reasons

A

a business may be forced to expand to ensure its future existence and success

100
Q

Diversification

A

a business enters into new product areas or a new market. This broadens its offerings and reduces or ‘spreads’ the risk of failure

101
Q

EXP Agressive reasons

A

a business may expand in order to maximise its growth or profits e.g. by eliminating competition

102
Q

Asset stripping

A

a business buys another with the aim of either gaining that businesse’s assets for its own use or making a profit by selling the assets off at a profit

103
Q

EXP Psychological reasons

A

a business expands to satisfy the personal motivations of its leaders eg ambition

104
Q

Empire building

A

the attempt to dominate the sector locally, nationally or globally

105
Q

Organic growth

A

the internal growth rate a business can achieve by increasing productivity and enhancing sales. It is the natural expansion of a business as it makes and retains profits

106
Q

Exporting

A

sellling products in a foreign

107
Q

Licensing

A

one business permits another to use its designs or products in a specified market area in returen for royalty payment

108
Q

Franchising

A

an existing business with a proven business model grants permission to a person setting up the business to use its name, logo and business idea in return for a fee or a percentage of profits or sales

109
Q

Inorganic growth

A

the external growth of a business eg a stratiegic alliance, mergerm acquisition

110
Q

Strategic business alliance/joint venture

A

two or more independent businesses agree to co-operate and share business resources and expertise for the mutual beneft of all parties involved. The businesses remain legally independent and each business maintains its own separate identity

111
Q

Takeover/aquisition

A

one business purchases 51% or more of the shares in another business in either a hostile or friendly man. The acquiring business, known as the holding company, obtains control of the other business which is known as the subsidiary

112
Q

Merger

A

a voluntary amalgamation of two or more businesses for their mutual benefit, trading under a common name. A singlenew legal entity is formed once itis approved by shareholders

113
Q

Grant

A

a sum of money given to a business by a government agency for a particular purpose

114
Q

Venture capital

A

an investor invests in a business with high growth potential, receiving shares in the business and providing finance and expertise. Usually the venture capitalist sells their shares at a profit once the business has become successful

115
Q

Balance of payments

A

total exports - total imports

116
Q

Results of business expansion in the domestic market

A

increased employment
incresed tax revenue
spin-off effect
lower cost of production (economies of scale)

117
Q

Results of business expansion in foreign markets

A

increased employment
higher profits
balance of trade/payments improved
diversification - spreading the risk
survival
improved international relations

Business (5 decks)

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