Making the start-up effective

Question 1

Marketing mix

Answer 1

The combination of factors which help the business to take into account customer needs when selling a product – usually summarised as the 4 Ps, which are price, product, promotion and place

Question 2

Price

Answer 2

The amount of money customers have to give up to acquire a product

Question 3

Product

Answer 3

A good or service produced by a business or organisation and made available to customers for consumption

Question 4

Promotion

Answer 4

Communication between the business and customer, making the customer aware that the product is for sale, telling or explaining to them what is the product, making the customers aware of how the product will meet the customers’ needs and persuading them to buy it for the first time or again.

Question 5

Place

Answer 5

The way in which a product is distributed – how it gets from the producer to the consumer

Question 6

Sole trader or (sole proprietor)

Answer 6

The only owner of a business which has unlimited liability.

Question 7

Unlimited liabiillity

Answer 7

A legal obligation on the owner of a business to settle (pay off) all debts of the business. In law there is no distinction between what the business owes and owns and what the business owns and owes.

Question 8

Limited liabillity

Answer 8

When shareholders of a company are not personally liable for the debts of the company; the most they can lose is the value of their investment in the shares of the company.

Question 9

HM Revenues and Customs (HMRC)

Answer 9

The government authorities in the UK responsible for collecting tax.

Question 10

VAT (Value Added Tax)

Answer 10

A tax on the value of sales: it is paid by businesses to government.

Question 11

Income tax

Answer 11

A tax on the value of income earned by workers; this includes sole traders who have to pay income tax on their net earnings.

Question 12

National Insurance Contributions (NICs)

Answer 12

A tax on the earning of workers; Employers’ National Insurance contributions are paid by employers on the wages of their workers; employees and sole traders have to pay National Insurance contributions on their earnings.

Question 13

Corporation Tax

Answer 13

A tax on the profits of limited companies.

Question 14

Customer Service

Answer 14

The experience that a customer gets when dealing with a business and the extent to which that experience meets and exceeds customer needs and expectations.

Question 15

Customer Satisfaction

Answer 15

A measure of how much products meet customers’ expectations.

Question 16

Repeat purchases (or repeat business)

Answer 16

Orders or sales that occur from customers who have bought the product or service in the past.

Question 17

Stakeholder

Answer 17

An individual or a group which has an interest in and is affected by the activities of a business; stakeholders have an interest in how the business operates and whether or not it is successful.