Business Theme 1 Flashcards
(134 cards)
1
Q
Product orientation
A
To sell products and services that the business wants to produce
2
Q
Dynamic market
A
A market that is subject to rapid or continuous change
3
Q
What is a niche market?
A
A subset of a normal market that caters for specific consumer needs and wants.
4
Q
What is a dynamic market?
A
A market that is subject to rapid or continuous change.
5
Q
How is market size measured?
A
Measured by volume of sales or value.
6
Q
What is market share?
A
The % of a market that a business, product or service has.
7
Q
What is innovation?
A
When an invention is brought to market.
8
Q
What is risk in a business context?
A
The possibility that the business will have a lower than expected profit or a loss.
9
Q
What is uncertainty in business?
A
When businesses are unable to predict external shocks or future events.
10
Q
What is qualitative data?
A
Data gathered that is numerical such as % of customers who buy more than once a week.
11
Q
What is quantitative data?
A
Non-numerical data such as how customers use the product.
12
Q
What is product orientation?
A
To sell products and services that the business wants to produce.
13
Q
What is market orientation?
A
To sell products or services based on customer needs and wants.
14
Q
What is primary market research?
A
Data which is collected first hand.
15
Q
What is secondary market research?
A
Data which already exists.
16
Q
What is market segmentation?
A
A whole market can be divided into sections called segments.
17
Q
What is market mapping?
A
The process of finding the variables which differentiate brands in a market and then plotting them on a map to identify a gap in the market.
18
Q
What is competitive advantage?
A
An advantage a business has over its competitors, allowing it to generate larger than average turnover for the industry.
19
Q
What is differentiation?
A
The extent to which consumers perceive one product as being different from the others in the market; highly differentiated products have no substitutes.
20
Q
What is adding value?
A
The process by which a business adds to the price that a consumer is willing to pay for a product, e.g., frying potatoes to make chips.
21
Q
What are substitute goods?
A
Substitute goods are products that can be replaced with another, such as a bus for a taxi or margarine for butter.
22
Q
What are complementary goods?
A
Complementary goods are products used at the same time with another product, such as coffee pods in a coffee machine or ink in a printer.
23
Q
What does demographics refer to?
A
Demographics refers to the structure of the population.
24
Q
What are external shocks?
A
External shocks are events that cause significant change, such as war, terrorism, or a disease outbreak like Ebola in Liberia.
25
What is seasonality?
Seasonality refers to any predictable change or pattern in a time series that recurs or repeats over a one-year period.
26
What is productivity?
Productivity is the rate at which goods or services are produced.
27
What is a shock in economic terms?
A shock is an unpredictable event that causes a change within an economy.
28
What is automation?
Automation is the method of operating or controlling processes by automatic means using devices, reducing the need for human interaction.
29
What is mechanisation?
Mechanisation is the method of operating or controlling processes using machinery.
30
What is an indirect tax?
Indirect taxes are taxes put on products or services before they reach the consumer, such as VAT and excise.
31
What is a government subsidy?
A government subsidy is a grant or gift of money from the government to encourage the supply of certain goods, such as milk subsidies.
32
What is supply in market terms?
Supply is the amount of product or service that a business is willing and able to provide at a given price.
33
What is demand in market terms?
Demand is the amount of product or service that customers are willing and able to buy at a given price.
34
What is a supply curve?
A supply curve is a line that plots the relationship between price and quantity supplied.
35
What is a demand curve?
A demand curve is a line that plots the relationship between price and quantity demanded.
36
What is a normal good?
A normal good is a product where an increase in consumers' income leads to an increase in demand.
37
What is an inferior good?
An inferior good is a product where an increase in consumers' income leads to a decrease in demand.
38
What is a substitute good?
A substitute good is an alternative product used to satisfy a want.
39
What is a complementary good?
A complementary good is a product that may be used together with another product, such as a coffee machine and coffee pods or a smartphone and paid apps.
40
What is price elasticity of demand (PED)?
The responsiveness of demand to a price change.
41
What does it mean if demand is elastic?
The change in price results in a greater change in demand.
42
What does it mean if demand is inelastic?
The change in price results in a smaller change in demand.
43
What is income elasticity of demand (YED)?
The responsiveness of demand to a change in income.
44
What is a normal necessity?
Demand for the good increases as income increases.
45
What is a normal luxury?
Demand for the good increases by at least 1.5 times the percentage increase in income and vice versa.
46
What is the function of a product/service?
What the item is used for.
47
What are aesthetics in product/service design?
What the item looks like.
48
What is resource depletion?
Reduction in the earth's natural resources such as precious metals.
49
What is waste minimisation?
A business way of making sure that there is no waste in the production process, for example making other goods from offcuts.
50
What does reuse mean?
When a product is reused, for example, a bag for life.
51
What does recycled mean?
When a product is turned into something else, a tin can becomes an airplane part.
52
What is ethical sourcing?
Buying from sustainable sources, for example, trees from forest suppliers who replant.
53
What is differentiation in branding?
How well a business can change the product so that a consumer recognises it as superior, e.g., Audi / BMW German technology engines.
54
What is consumer recognition?
How well a business knows their customers, age, gender, lifestyle, etc.
55
What are barriers to entry?
How difficult it is to get into the market, e.g., Mobile phone market has high technology so high barriers to entry, market stalls are easy to start so low barriers.
56
What is price elasticity of demand?
How much demand for a good or service is likely to fluctuate with a change in price, e.g., petrol will still be demanded no matter what the price is, therefore it is inelastic.
57
What is a strong brand?
A brand that is recognised by everyone, e.g., Rolls Royce, Rolex, Ford, Chanel.
58
What is the marketing mix?
Price, place, promotion, and product; how a business uses these 4 elements strategically.
59
What is a distribution channel?
A distribution channel is where a product is sold and how many stages it takes to get to a customer.
## Footnote
Example: factory outlet = 2 stages: manufacturer > customer
60
What is a brand?
A brand is a name or symbol which represents the company in the eyes of the consumer.
61
What is promotion?
Promotion is the publicising of a product, company or service to increase sales or public awareness.
62
What is cost-plus pricing?
Cost-plus pricing is to set the price of a product or service by calculating the cost then adding a set amount or percentage to it.
63
What is competitive pricing?
Competitive pricing is to charge a similar amount for goods as are charged by competitors.
64
What is price skimming?
Price skimming is setting a high price initially then lowering it later as the market becomes more saturated.
65
What is price penetration?
Price penetration is setting a low price when launching a product then increasing it as it is established in the market.
66
What is psychological pricing?
Psychological pricing is setting a price slightly lower than a rounded figure to give the appearance of it being cheaper.
## Footnote
Example: 99p instead of £1
67
What is predatory pricing?
Predatory pricing is setting a low price to force rivals out of business.
68
What is premium pricing?
Premium pricing is setting a high price to make the product appear more of a luxury product.
69
What is a wholesaler?
A wholesaler is a business that sells goods to retailers.
70
What is a retailer?
A retailer is a business that sells goods to consumers.
71
What is the product life cycle?
The product life cycle refers to the stages that a product moves through over time.
72
What is the BCG matrix?
The BCG matrix, or Boston Matrix, is a marketing portfolio analysis tool.
73
What is B2B marketing?
B2B marketing refers to business to business marketing.
74
What is B2C marketing?
B2C marketing refers to business to consumer marketing.
75
What is collective bargaining?
Collective bargaining is when a union representative speaks to management on behalf of all workers in a business, usually about working conditions or pay.
76
What is multi-skilling?
An employee is trained to do more than one job, for example an electrician is trained to plaster walls.
77
What is homeworking?
Employees work from home to save commuting time and give them work-life balance.
78
What is part-time work?
Employees work less than 35 hours a week but still get sick pay and work benefits.
79
What is temporary employment?
Employees are hired on a fixed term contract, to finish building a housing estate.
80
What is a flexible workforce?
A workforce that can respond to changes within the workplace or market.
81
What is recruitment?
Process by which a job vacancy is identified & potential employees are notified.
82
What is selection?
Process of assessing candidates and appointing a post holder.
83
What is job analysis?
Investigating the requirements of a job to identify the tasks and skills required.
84
What is a job description?
Identifies tasks and responsibilities involved in the job.
85
What is a person specification?
The characteristics which the candidate both needs to have and those which are desired, for example skills and qualifications.
86
What is hierarchy in an organization?
A system in an organisation where people are ranked according to the authority that they have.
87
What is span of control?
The number of subordinates that a supervisor or manager is in charge of.
88
What is chain of command?
The route that orders travel down in an organisation and complaints travel up.
89
What is a flat structure?
A hierarchy design which has few layers and short chain of command but a wide span of control.
90
What is a tall structure?
A hierarchy design which is the opposite to a flat structure, it has a long chain of command but a short span of control.
91
What is a matrix structure?
A hierarchy design which groups by project and function.
92
What is authority in an organization?
The power or right to give orders in an organisation.
93
What is delegation?
The act of passing a job or order down to a subordinate.
94
What is job enrichment?
Giving an employee more responsible tasks (vertical).
95
What is job enlargement?
Giving an employee work of a similar responsibility to do (horizontal).
96
What is job rotation?
Moving an employee round similar tasks.
97
What is delegation?
The act of asking a worker to perform a task.
98
What is team working?
Employees in small groups with a similar aim.
99
What is piecework?
Employees are paid per output, e.g., items produced.
100
What is commission?
Employees are paid a percentage of all sales they make.
101
What is a bonus?
A one-off payment for meeting a target.
102
What is profit share?
Employees receive a percentage of the profit every year.
103
What is performance-related pay?
Payment is agreed based on performance rather than a rigid pay scale.
104
What is consultation?
Consulting employees on business decisions.
105
What is empowerment?
Giving employees more autonomy and decision-making power.
106
What is flexitime?
Employees can start and finish when they need to as long as they work their 35 hours and the job gets done.
107
What is management?
Authority to make decisions in the best interest of the business.
108
What is an autocratic leader?
A leader who makes all the decisions.
109
What is a paternalistic leader?
A leader who makes decisions but takes employees' points of view into consideration.
110
What is a democratic leader?
A leader who encourages participation in decision making.
111
What is a laissez-faire leader?
A leader who allows employees to make their own decisions.
112
What is an entrepreneur?
A person who sets up a business, taking financial risks in the hope of profit.
113
What is an intrapreneur?
An employee who works for a large business but thinks like an entrepreneur.
114
What is innovation?
An invention taken to market and sold.
115
What is risk?
The possibility of financial loss.
116
What is uncertainty?
Something in the future which is not known, for example, a world recession.
117
What are business objectives?
Sales are a primary objective of a business, which means selling a specific amount.
118
What is market share?
The portion of a total market which is controlled by a particular business.
119
What does cost efficiency mean?
Spending as little money as possible to achieve the same objective.
120
What is employee welfare?
The efforts made by a business to take care of employees whilst at the workplace. Employers are required by law to provide essential amenities such as toilets, sinks, and clean drinking water.
121
What is customer satisfaction?
A measure of how well the product or service meets and exceeds the needs of customer expectations.
122
What are social objectives in business?
A business that has at its core the objective of helping society or the planet in some way.
123
What is profit maximisation?
The aim of the business is to make as high profits as possible in the time frame.
124
What is profit satisficing?
The aim of the business is to make just enough profit to satisfy the owners while considering other managers' objectives.
125
What does survival mean in a business context?
Making enough profit to break-even for the first few years until established in the market.
126
What is a sole trader?
A person who sets up a business on their own; they can have employees but there is only one owner.
127
What is a partnership?
Two to 20 people who set up a business together as joint owners, e.g., vets, solicitors, dentists.
128
What is a public limited company?
A company whose shares are traded on the stock market.
129
What is a private limited company?
A company whose shares can only be sold to friends and family.
130
What is a franchisor?
The person who sells the franchise.
131
What is a franchisee?
The person who buys the franchise.
132
What is opportunity cost?
The cost of the loss of the next best alternative not chosen.
133
What defines a leader?
A person who has vision and followers.
134
What is emotional intelligence?
The ability to recognize, use, understand, and manage emotions in a positive way to reduce stress.
