Business P2

Question 1

What is market segmentation?

Answer 1

Dividing a market into groups based on shared characteristics like age, income, or interests.

Question 2

Why is market segmentation useful?

Answer 2

It allows businesses to target products and marketing more effectively.

Question 3

What is the difference between niche and mass marketing?

Answer 3

Niche targets a small, specific group; mass targets a large audience.

Question 4

What is primary market research?

Answer 4

First-hand research like surveys or interviews.

Question 5

What is secondary market research?

Answer 5

Using existing data from reports, internet, or publications.

Question 6

What is qualitative research?

Answer 6

Research that gathers opinions, thoughts, and feelings.

Question 7

What is quantitative research?

Answer 7

Research that gathers numerical data.

Question 8

What is the marketing mix?

Answer 8

The 4Ps: product, price, place, and promotion.

Question 9

How can businesses differentiate their products?

Answer 9

Through branding, unique features, design, or customer service.

Question 10

What is product life cycle?

Answer 10

The stages a product goes through: introduction, growth, maturity, and decline.

Question 11

What is extension strategy?

Answer 11

Methods to prolong the product life cycle, such as rebranding or adding features.

Question 12

What is price skimming?

Answer 12

Setting a high price initially to maximize profits from early adopters.

Question 13

What is penetration pricing?

Answer 13

Setting a low price to attract customers and gain market share.

Question 14

What is promotional pricing?

Answer 14

Temporarily reducing prices to boost sales.

Question 15

What is cost-plus pricing?

Answer 15

Adding a markup to the cost of production.

Question 16

What is competitive pricing?

Answer 16

Setting prices based on competitors’ prices.

Question 17

What is the purpose of advertising?

Answer 17

To raise awareness, inform, persuade, and remind customers.

Question 18

What is the difference between above-the-line and below-the-line promotion?

Answer 18

Above-the-line uses mass media; below-the-line is more direct and personal.

Question 19

What are methods of distribution?

Answer 19

Direct to consumer, retailer, wholesaler, e-commerce.

Question 20

What is e-commerce?

Answer 20

Buying and selling goods/services online.

Question 21

How does technology affect marketing?

Answer 21

Enables digital marketing, customer data collection, targeted ads.

Question 22

What are the three main methods of production?

Answer 22

Job, batch, and flow production.

Question 23

What are the benefits of job production?

Answer 23

High quality, customization, motivated workers.

Question 24

What are the disadvantages of job production?

Answer 24

Expensive, time-consuming.

Question 25

What are the benefits of batch production?

Answer 25

More efficient than job, still some customization.

Question 26

What are the disadvantages of batch production?

Answer 26

Downtime between batches.

Question 27

What are the benefits of flow production?

Answer 27

High output, lower unit costs.

Question 28

What are the disadvantages of flow production?

Answer 28

High setup costs, less flexible.

Question 29

What is productivity?

Answer 29

The output per worker per period of time.

Question 30

What are ways to improve productivity?

Answer 30

Training, better equipment, motivation.

Question 31

What is quality control?

Answer 31

Checking finished products for defects.

Question 32

What is quality assurance?

Answer 32

Ensuring quality throughout the production process.

Question 33

Why is quality important?

Answer 33

Improves reputation, customer satisfaction, reduces waste.

Question 34

What is customer service?

Answer 34

Meeting customer expectations before, during, and after a purchase.

Question 35

What is procurement?

Answer 35

Purchasing goods and services for business use.

Question 36

What is supply chain management?

Answer 36

Managing the flow of goods from suppliers to customers.

Question 37

What is JIT stock control?

Answer 37

Ordering stock only when needed.

Question 38

What is JIC stock control?

Answer 38

Holding buffer stock in case of delays.

Question 39

What are the pros and cons of JIT?

Answer 39

Lower storage costs, but risk of shortages.

Question 40

What are the pros and cons of JIC?

Answer 40

Less risk of stockouts, but higher storage costs.

Question 41

What is an organisational chart?

Answer 41

A diagram showing the structure of a business.

Question 42

What is span of control?

Answer 42

The number of people a manager is responsible for.

Question 43

What is delegation?

Answer 43

Passing authority down the hierarchy.

Question 44

What is centralisation?

Answer 44

Decision-making remains at the top.

Question 45

What is decentralisation?

Answer 45

Decision-making is distributed throughout the business.

Question 46

What is internal recruitment?

Answer 46

Filling a vacancy with someone already employed.

Question 47

What is external recruitment?

Answer 47

Filling a vacancy with someone from outside.

Question 48

What are advantages of internal recruitment?

Answer 48

Quicker, cheaper, known candidates.

Question 49

What are advantages of external recruitment?

Answer 49

New ideas, wider range of candidates.

Question 50

What are the stages of recruitment?

Answer 50

Identifying vacancy, job description, advertising, shortlisting, interviewing.

Question 51

What are types of training?

Answer 51

On-the-job and off-the-job.

Question 52

What are benefits of on-the-job training?

Answer 52

Cheaper, directly relevant.

Question 53

What are disadvantages of on-the-job training?

Answer 53

Can disrupt work, may be lower quality.

Question 54

What are benefits of off-the-job training?

Answer 54

Higher quality, focused learning.

Question 55

What are disadvantages of off-the-job training?

Answer 55

Expensive, may not be specific.

Question 56

What is financial motivation?

Answer 56

Bonuses, wages, commission.

Question 57

What is non-financial motivation?

Answer 57

Recognition, promotion, flexible working.

Question 58

Why is motivation important?

Answer 58

Improves productivity, reduces absenteeism and turnover.

Question 59

What is revenue?

Answer 59

Income from sales.

Question 60

How is revenue calculated?

Answer 60

Price × Quantity sold.

Question 61

What are fixed costs?

Answer 61

Costs that do not change with output.

Question 62

What are variable costs?

Answer 62

Costs that vary with output.

Question 63

How is total cost calculated?

Answer 63

Fixed costs + Variable costs.

Question 64

What is gross profit?

Answer 64

Revenue - Cost of sales.

Question 65

What is net profit?

Answer 65

Gross profit - Expenses

Question 66

What is break-even?

Answer 66

When total revenue equals total costs.

Question 67

How is break-even output calculated?

Answer 67

Fixed costs ÷ (Price - Variable cost per unit).

Question 68

What is margin of safety?

Answer 68

Actual sales - Break-even sales.

Question 69

What is a cash flow forecast?

Answer 69

Prediction of inflows and outflows over time.

Question 70

Why is cash flow important?

Answer 70

Ensures business can pay bills and survive.

Question 71

What are examples of short-term finance?

Answer 71

Overdraft, trade credit.

Question 72

What are examples of long-term finance?

Answer 72

Loan, share capital, retained profit.

Question 73

What is overdraft?

Answer 73

A facility to withdraw more money than in the account.

Question 74

What is trade credit?

Answer 74

Delaying payment to suppliers.

Question 75

What is retained profit?

Answer 75

Profit kept in the business.

Question 76

What is loan capital?

Answer 76

Borrowed money that must be repaid with interest.

Question 77

What is share capital?

Answer 77

Money raised by selling shares.

Question 78

What are ethics in business?

Answer 78

Moral principles guiding business behaviour.

Question 79

Why act ethically?

Answer 79

Builds trust, improves brand image, avoids legal issues.

Question 80

What are environmental considerations?

Answer 80

Reducing waste, pollution, carbon footprint.

Question 81

How does legislation affect business?

Answer 81

Sets rules on pay, safety, discrimination.

Question 82

What is consumer law?

Answer 82

Protects customers from unsafe or misleading products.

Question 83

What is employment law?

Answer 83

Protects workers’ rights, e.g., wages, equality.

Question 84

How do interest rates affect business?

Answer 84

Higher rates increase borrowing costs; lower rates encourage investment.

Question 85

What is inflation?

Answer 85

The rate at which prices rise.

Question 86

How does inflation affect business?

Answer 86

Raises costs, may reduce consumer spending.

Question 87

What is unemployment?

Answer 87

People able and willing to work but unable to find a job.

Question 88

How does unemployment affect business?

Answer 88

May reduce demand but lowers wage pressure.

Question 89

What is globalisation?

Answer 89

The growing interconnectedness of economies and businesses.

Question 90

How does globalisation affect business?

Answer 90

Access to new markets, cheaper production, more competition.

Question 91

What are exchange rates?

Answer 91

The value of one currency in terms of another.

Question 92

How do exchange rates affect business?

Answer 92

Stronger currency = cheaper imports, weaker currency = cheaper exports.

Question 93

What is competition?

Answer 93

Rivalry between businesses for customers.

Question 94

How does competition affect business?

Answer 94

Forces lower prices, better quality and service.

Question 95

How can a business respond to competition?

Answer 95

Differentiate, improve customer service, reduce prices.

Question 96

How does ICT impact business?

Answer 96

Improves communication, efficiency, marketing.

Question 97

What are the benefits of e-commerce?

Answer 97

Global reach, lower costs, convenience for customers.