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Business > L C1 > Flashcards

L C1 Flashcards

1
Q

BUSINESS PLANS

What is a business plan

A

A report often used to attract investors into a business.

Contains information on what the business aims to do and how it is financed.

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2
Q

BUSINESS PLANS

Business advisors

A

Especially invaluable to a youth person starting up in business

Someone to turn to when things go wrong

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3
Q

BUSINESS PLANS

Bank managers

A

Provide great help for a small business, but rarely do

Provide a business with a business plan tool kit

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4
Q

BUSINESS PLAN

Government agencies

A

The department for business innovation and skills

Local enterprise partnership

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5
Q

BUSINESS PLANS

Accountants

A

Useful to have a cash flow forecast and useful to have a profit and loss forecast to be checked by an accountant

Invaluable for advice on tax issues

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6
Q

MARKET RESEARCH

Primary research

A

Involves collection of first hand data that did not exist before and therefore it is original data

Includes: surveys, interview, observations, trials

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7
Q

MARKET RESEARCH

Secondary data

A

Research that has already been undertaken by another organisation and therefore already exists

Includes: 
Data on customers/customer profiles/feedback 
Finance records 
Loyalty cards 
Sales records
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8
Q

MARKET RESEARCH

The purpose of market research

A
  • Target markets
  • Identify their characteristics eg: gender age and incomes
  • This will inform the marketing activities eg: where to advertise
  • Understanding the target market
  • to identify size structure and trend in the market
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9
Q

MARKET RESEARCH

Market size

A

Total value or volume of sales in the market

Market size will influence the methods of marketing

Trends will identify changes in size and structure over time as well as trends in consumer behaviour

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10
Q

MARKET RESEARCH

Market research

A

Collection and analysis of data to inform a business about their market

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11
Q

MARKET RESEARCH

Examples of external secondary market research

A 
National and local government 
Market research organisations 
Professional bodies 
Professional magazines 
Trade unions 
International bodies 
Academic organisations 
Newspapers and magazines and internet
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12
Q

MARKET RESEARCH

validity

A

To check the source of the data to ensure it is valid

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13
Q

MARKET RESEARCH

Reliability

A

Looks at how the research was collected and the consistency of the methods

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14
Q

MARKET RESEARCH

Appropriateness

A

Question whether the research is fit for purpose and whether I’d was collected appropriately

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15
Q

MARKET RESEARCH

Currency

A

Whether the data is up to date

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16
Q

MARKET RESEARCH

Cost market

A

Research must be carried out within the agreed budget and incur excessive costs in relation to the value of the results to the business

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17
Q

MARKET RESEARCH

Qualitative

A

Non-statistical information

In depth

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18
Q

MARKET RESEARCH

Quantitative

A

Statistical data

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19
Q

PRODUCT LIFE CYCLE

Development stage and the affect on cash flow

A

The difference between money coming in and going out is negative (net cash flow will be negative)

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20
Q

PRODUCT LIFE CYCLE

Launch phase and the affect on the cash flow

A

The net cash flow is also likely to be negative at this stage

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21
Q

PRODUCT LIFE CYCLE

Growth phase and the affect on the cash flow

A

Net cash flow is likely to be positive in this stage but is likely to be a small amount

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22
Q

PRODUCT LIFE CYCLE

Maturity and the affect on the cash flow

A

With all the costs paid off the net cash flow is likely to be positive at the stage

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23
Q

PRODUCT LIFE CYCLE

Saturation and decline

A

If an extension strategy is used then it is likely that net cash flow will dip in these stages as the strategy has to be paid for

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24
Q

MARKETING

What is marketing?

A

The identification satisfying and revisiting of customer needs

Covers a number of activities including:

  • Researching the market to indenting customer needs
  • making decisions about the 4 Ps in order to satisfy customer needs
  • to keep up to date with changes in the market and attract new customers
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25
Q

MARKETING

Why is marketing important?

A
  • To identify their customer base
  • to keep ahead of competitors
  • To encourage customers to buy from you
  • Communicate effectively with the market
  • increase sales and profitability
  • Entering markets
  • Gaining customers loyalty
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26
Q

MARKETING

Importance of marketing
New businesses

A

-new businesses with limited budgets, let the market knows it exists through social media

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27
Q

MARKETING

Importance of marketing
Increased competition

A

Use marketing in order to maintain market share

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28
Q

MARKETING

Importance of marketing
Seasonal

A

May try to expand during their seasonal months

Special offers/deals during these seasons

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29
Q

MARKETING

Importance of marketing
During economic downturn

A

Business may use marketing to promote value for money or affordable treats

30
Q

MARKETING

Importance of marketing
Survival

A

Business will use marketing to ensure a sufficient profit to pay dividends to shareholders

31
Q

MARKETING

What is product orientation

A

It is an inward looking approach to new product development where the key focus is on what products can be made

Informed by scientific research and technical development (R&D)

32
Q

MARKETING

Product orientation

A

Concentrate on producing high quality products and later looking at new markets for them

Most common with technologically advanced products

33
Q

MARKETING

What is Market orientation?

A

It is an outward looking approach to new product development where the key focus is on what products the consumer wants

34
Q

MARKETING

Market orientation

A

Informed by market research
Businesses will concentrate on understanding the needs of the consumer and then adapting or producing products to meet the needs

35
Q

MARKETING

Asset led marketing

A

This is an inward marketing is an inward looking approach that bases a firm’s activities around its existing competence and assets

Focusing on brand awareness
Identifying new products

36
Q

MARKETING

Asset led marketing advantages and disadvantages

A

It’s cost effective and can strengthen the asset further to build customer loyalty

However if exploited too much or used ineffectively it may dilute the brand value

GOT TO HAVE BALANCE

37
Q

MARKETING-PLACE

What is the place?

A

The place defines both the physical location where the product is available and the distribution channel

Can be the physical place were the buyers meet the sellers face to face or virtually

38
Q

MARKETING PLACE

Distribution

A

Distribution is the process of getting the firms product to the market

Distribution channels are the routes to the market

39
Q

MARKETING PLACE

Short distribution channels

A

This are where the producer sells either directly to the customer or through a retailer

40
Q

MARKETING PLACE

Long distribution channels

A

These are where there are more than one intermediary (middle person) between the producer and the customer

41
Q

MARKETING PLACE

Types of distribution channels
Direct selling

A

Selling directly to the customer

42
Q

MARKETING PLACE

Distribution channels
Retailers

A

Sell products on to the general public

43
Q

MARKETING PLACE

Distribution channels
Wholesalers

A

But large quantities of supplies from producer and sell them on in smaller quantities

Corner shop might go to a wholesaler

44
Q

MARKETING PLACE

Distribution channels
E-commerce

A

Increasing amount of firms using e-commerce benefitting from from the power of the internet to sell on their products

45
Q

MARKETING PLACE

Distribution channels
Traditional

A

Manufacturer
Wholesaler
Retailer
Consumer

46
Q

MARKETING PLACE

Distribution channels
Medium

A

Manufacturer

Retailer
Consumer

47
Q

MARKETING PLACE

Distribution channels
Short

A

Manufacturer

Consumer

48
Q

MARKETING PLACE

Distribution decisions

Type of product

A

The characteristics of the product need to be taken into account

49
Q

MARKETING PLACE

Distribution decisions

Market

A

It’s important that the customers being targeted can access the product

50
Q

MARKETING PLACE

Distribution decisions

Quantity and frequency

A

If only a few low cost items are being delivered it would not be cost effective to send them hundreds of miles

51
Q

MARKETING PLACE

Distribution decisions

Geographical location

A

How far it the target market from the firm

Will have to take into account the nearness of the firm

52
Q

MARKETING PLACE

Distribution decisions

Cost

A

An expensive distribution method will reduce the contribution being made to a firms profit
Therefore the firm must ensure that the method is cost effective

53
Q

MARKETING

Distribution decisions

Degree of control

A

Businesses may want to protect their brand by limiting the spread of the product and keeping tight control or where it is available and at what price

54
Q

MARKETING PROMOTION

What is promotion?

A

Promotion is the activities designed to communicate with the market thereby increasing visibility and sales of a product

All firms use different promotional methods to make their products more widely known

55
Q

MARKETING PROMOTION

what is above the line promotions

A

Uses the paid service of a third party to communicate with customers

Advertising

56
Q

MARKETING PROMOTION

What is below the line promotions

A

In house promotion designed to create a short term incentive to buy

Sales promotion
Merchandising
Public relations
Relationship marketing

57
Q

MARKETING PROMOTION

Advertising and 2 main purposes

A

Occurs when firms pay for the promotion of their product through the main media (Above the line)

Informative advertising-explains to the customer details of the product

Persuasive advertising-tries to influence the customer to buy the product based on factors other than what the product does
Emotions and sensitivities of customers

58
Q

MARKETING PROMOTION

Promotional methods
Public relations

A

Involves communicating with he media (newspapers) in order to get favourable publicity for the organisation

59
Q

MARKETING PROMOTION

Promotional methods
Point of sale(POS)

A

Plenty of thought I’d put into the visual display of a product and the way that the product is presented within the selling location

60
Q

MARKETING PROMOTION

Promotional methods
Sales promotions

A

Short term offers used by firms in order to increase sales for their products

61
Q

MARKETING PROMOTION

Promotional methods
Advertising

A

Occurs when firms pay for the promotion of their product through the media
‘Above the line promotion’

62
Q

MARKETING PROMOTION

What is branding?

A

A promotional method that involves the creation of an identity for the business that distinguishes that firm and its products from other firms

63
Q

MARKETING PROMOTION

Benefits of branding

A

Can add value to a product allowing firms to charge higher prices

Leads to brand loyalty

64
Q

MARKETING PROMOTION

Drawbacks of branding

A

Firms spend huge amounts of time and and money on branding every year

65
Q

MARKETING PROMOTION

What is relationship marketing?

A

Focuses on building a longer term relationship with valued customers Esther than focusing on short term sales

66
Q

MARKETING PROMOTION

Benefits of marketing

A
  • Builds brand loyalty
  • Encourages an emotional attachment to the brand
  • Benefit in the long run by word of mouth promotion
67
Q

MARKETING PROMOTION

Influences of promotional decisions

A

The segmentation, targeting, positioning process

Internal constraints eg size of promotional budget or firms ethical objectives

External influences

  • technology
  • competitors’ actions
  • environmental issues
68
Q

MARKETING PROMOTION

promotional strategies

A

It’s important to chose an appropriate promotional strategy

  • complement other elements of marketing mix
  • within budget and effective use of
  • appeal to target market
  • support brand image
  • achieve marketing objectives
69
Q

MARKETING PRICE

PED Formula

A

Price elasticity=

% change in quantity demand
———————————————
% change in price

70
Q

MARKETING PRICE

Pricing strategies

A
  • penetration
  • price skimming
  • cost plus
  • competitive
  • psychological
  • contribution
71
Q

MARKETING PRICE

Penetration pricing

A

Involves setting a low initial price for a new market for a new product in order to get a foothold in the market and gain market share

Business (6 decks)

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