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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
Breakeven Point (BEP)
the point at which total revenue matches the cost of making the product or providing the service
26
Margin of safety at forecat output
how far the sales can fall before the breakeven point is reached i.e. forecast output-bep
27
Break even point formula
FC / (SP-VC)
28
Margin of safety formula
Total Revenue - BEP
29
Marketing
the process by which a business identifies and anticipates consumer needs and produces goods and services to satisfy those needs profitably
30
Marketing concept
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
31
Marketing strategy
aims to design and promote a product or service based on consumer needs as identified during the market research process
32
Marketing plan
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
33
Market Segmentation
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
34
Demographic segmentation
divides the market by one or many broad characteristics suhc as age, income, gender etc.
35
Geographic segmentation
uses basic geographic measures such as countries, states, cities. climate, population density to segment the market
36
Psychological segmentation
analyses consumer lifestyle, spending power and opinions or attitudes
37
Behavioural segmentation
analyses consumers according to their buying patterns or how they interact with the product
38
Target market
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.
39
Niche Market
a group of consumers who have a more specialised nedd or want thatn the larger market
40
Product positioning
creating a lasting positive image of a product or service in the mind of the consumers in the target market
41
Marketing Mix
consists of the four elements a business can use to ersuade consumers to purchase its products (Product, price, place, promotion)
42
Product
a good or service produced by a business to satisfy a consumer's needs or wants
43
Product portfolio
the range of products produced by a business
44
Product branding
creating an identity for a product or business that clearly distinguishes it from competitors, usually involving a brand name or logo
45
Brand name
a unique name that idenifies a product and the business that produces it e.g. Coca-Cola
46
Patent
a legal certification granted to the inventor that allows them to exclude all others from making, using, or selling that invention
47
Brand logo
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
Trademark
a legally registered symbol or word/s that cannot be used by others
49
Brand slogan
a short, memorable phrase used to make a business stick in a consumer's mind
50
Own-brand products
products sold by retailers under the retailers own name and logo
51
Product packaging
how the product is presented to the consumer. Functions are- attract customer, protect, inform, promote
52
Product life cycle
describes the stages a product goes through from when it is first lauched to when it is finally withdrawn
53
Product harvesting
selling a product tht is in decline for short-term gain without any expenditure on promotion
54
Line-extension
the expansion of an existing product line
55
price
the amount consumers pay for a prduct or service offered by the business
56
High Price Strategy
business sets the price higher than competitors offering similar producrs on the market
57
Premium Pricing
the price is set high to reflect a customers perception of a surperior product
58
Price Skimming
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
Low price strategy
the business sets a relatively low price to stimulate demand and gain market share
60
Penetration pricing/market share pricing
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
Price discrimination
different market segments are charged different prices for the same product or service
62
Predatory pricing
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
Loss leader
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
Psychological pricing
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
Cost-plus pricing (mark-up)
the price is calculated to cover costs (production, marketing, distribution) and include a fixed percentage profit margin
66
Tiered pricing
consumers can choose the price that best fits their budget e.g. plane classes
67
Bundle pricing
the business sells multiple items together for a lower price tha n it would cost separately
68
Place
where consumers can find products or services sold by the business
69
Channel of Distribution
the way that the product gets from the manufacturer to the consumer. (Direct selling, wholesaler, agent, retailers)
70
Wholesaler
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
Retailer
a business that sells goods to consumers in small quantities
72
Agent
a business that acts as an extension of the producer and sells the products to the consumer
73
Promotion
used to increase awareness among existing and potential customers about the brand and the products and services on offer
74
Promotional mix
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
Advertising
Informs, persuades and reminds consumers about a product and its features
76
Sales promotion
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
Public relations
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
Personal selling
the process of person to person contact to persuade customers to purchase
79
Ethics
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
Advertising Standards Authority for Ireland (ASAI)
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
Methods of PR
publicity, sponsorship, celebrity endorsements
82
Advantages of branding
recognition, consumer loyalty, premium price, easier to expand product line
83
Sole trader
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
Partnership
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
Private limited company
a business owned by investors called shareholders who contribute funds or finance to the business. There can be between 1 and 149 shareholders
86
Co-operative
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
Job production
producing custom work , made to order to the cusomer's specifications. Unique, bespoke items are produced by skilled employees
88
Batch production
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
Mass (flow)production
continuous production of large amounts of standardised products, normally on assembly lineseg Kerry Foods Ireland
90
Subcontracting/outsourcing
a business pays another business to produce a part or all of their product
91
Business plan
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
Exuctive summary
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
Key personnel section
covers details of the managemnet team e.g. experience and qualifications and the managment structure in place
94
Financial analysis
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
Investment proposal
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
Conclusion
a summary of the main features of the enterprise with a AWOT anaysis and a proposed timeframe for implementation and decision making
97
Appendices
contain more detailed information to support the main tex tof the business plan e.g. results of research, customer endorsements, company brochure
98
Main body of a business plan
Description of the enterprise Key Personnel Market analysis Marketing Strategies Products or services Manufacturing, operations and premises Financial Analysis Investment Proposal Conclusion
99
EXP Defensive reasons
a business may be forced to expand to ensure its future existence and success
100
Diversification
a business enters into new product areas or a new market. This broadens its offerings and reduces or 'spreads' the risk of failure
101
EXP Agressive reasons
a business may expand in order to maximise its growth or profits e.g. by eliminating competition
102
Asset stripping
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
EXP Psychological reasons
a business expands to satisfy the personal motivations of its leaders eg ambition
104
Empire building
the attempt to dominate the sector locally, nationally or globally
105
Organic growth
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
Exporting
sellling products in a foreign
107
Licensing
one business permits another to use its designs or products in a specified market area in returen for royalty payment
108
Franchising
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
Inorganic growth
the external growth of a business eg a stratiegic alliance, mergerm acquisition
110
Strategic business alliance/joint venture
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
Takeover/aquisition
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
Merger
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
Grant
a sum of money given to a business by a government agency for a particular purpose
114
Venture capital
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
Balance of payments
total exports - total imports
116
Results of business expansion in the domestic market
increased employment incresed tax revenue spin-off effect lower cost of production (economies of scale)
117
Results of business expansion in foreign markets
increased employment higher profits balance of trade/payments improved diversification - spreading the risk survival improved international relations

Business (5 decks)

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