Milestone 2 key terms

Question 1

ways to add value?

Answer 1

celebrity endorsement
convenience
choice
quality
unique selling point
best technology(if suitable)
aesthetic/good design
restricted supply
brand name/branding

Question 2

calculated risk

Answer 2

a chance of exposure to loss or injury is undertaken having carefully assessed the advantages and disadvantages of taking that risk

Question 3

risks

Answer 3

financial loss
lack of security
business failure

Question 4

rewards

Answer 4

business growth/profit
independence
business success
fame

Question 5

asset and liability?

Answer 5

asset- money in pocket e.g. stock bond, things you own, royalties ,businesses that don’t require presence

liability- money out of pocket e.g. bills ,taxes ,credit card debt, loan

Question 6

liabilities

Answer 6

limited: owners of companies have limited liability meaning they are not personally responsible for business debts

unlimited: owners of small businesses such as sole traders and partnerships are personally responsible for all the debts of the business

Question 7

entrepreneur characteristics

Answer 7

good leader
decisive
creative
determined
resilient
persuasive
focussed
risk taker
able to use initiative
hard working
good communicator

Question 8

factors of production

Answer 8

land includes all natural resources e.g. raw materials

labour is the supply of workers and their productivity

capital is the machinery, factories, shops and the goods that are made

enterprise-the entrepreneurs who supply the products and services. They invest their own financial capital (cash) and take risks in return for profit

Question 9

customer needs

Answer 9

price
quality
choice- (power of 3, optimum number of options for sales is 3)
convenience

Question 10

convenience

Answer 10

location: businesses need to be located where customers find it easy to access services being provided
availability: it refers to products being in stock when customers wish to purchase them or that services are able to be provided
payment options: to provide convenience for customers by offering a variety of payment options
delivery :cost, speed and reliability of the methods of transport offered to customers

Question 11

primary or field research

Answer 11

new first hand information
for a specific purpose
not been collected before

Question 12

secondary or desk research

Answer 12

pre-existing information
information already collected before for a different purpose

Question 13

reasons for research

Answer 13

identify and understand customer needs and how they could be met
help businesses know if they’re doing the right thing
identify a gap in the market
reduces risk of failure
helps with decision making

Question 14

benefits of social media

Answer 14

access a wide range of people
changes in customer trends are spotted quickly
market researchers can segment the market and target research effectively
contain analytical tools that can be used to interrogate data

Question 15

big data

Answer 15

huge amounts of market research data
can be gathered through social data, cookies(online) ,loyalty cards

Question 16

gathering primary research?

Answer 16

surveys, questionnaires ,interviews, focus groups, observations ,experiments

Question 17

gathering secondary research?

Answer 17

Internal: previous sales records ,company accounts ,loyalty card information, customer data

external: competitors’ websites, newspapers, government statistics, reports, magazine surveys, social media, other firms research

Question 18

quantitative data

Answer 18

expressed in numbers, can be easily statistically analysed using graphs etc, comes from closed questions

Question 19

qualitative data

Answer 19

information about opinions, judgements and attitudes
more detail about why when and how
not easy to record or analyse statistically
comes from open questions

Question 20

primary research pros and cons?

Answer 20

PROS: can be highly focussed and relevant, up-to-date
CONS: can be expensive to collect analyse and evaluate ,care needs to be taken to ensure accuracy and avoid bias, takes time to do and analyse

Question 21

secondary research pros and cons?

Answer 21

PROS: wide range available, some of these are cheap/free
CONS: some are very expensive to buy, not always relevant or recent

Question 22

impact of unreliable data

Answer 22

can lead to bad decisions that may waste money and time
brand image can suffer
competitors gain an advantage
failure to meet the needs of customers with your product or service
missing gaps/opportunities in the market
poor decisions made with potentially disastrous consequences

Question 23

disadvantages of market research

Answer 23

information only as good as methodology used
can be inaccurate or unreliable or biased
results may not be what the business wants to hear
may stifle initiative or gut feeling
what customers want may be out of your businesses’ capacity

Question 24

mass market product

Answer 24

meets neds of a wide range of customers across various segments

Question 25

niche product or service

Answer 25

one that targets a specific of a large industry and market

Question 26

market segmentation

Answer 26

division of a market into smaller groups of consumers that share common needs and wants

Question 27

target market

Answer 27

a particular group of consumers that a product or service is aimed at

Question 28

segmentation by location

Answer 28

market is divided by features of geographical location
population density may be another feature ( number of people per square km)

Question 29

segmentation by region

Answer 29

identify and target consumers tastes and preferences that are unique ,or more prevalent in a particular area

Question 30

segmentation by demographics
by lifestyle?

Answer 30

market segmentation according to age, race, religion, gender, family size, ethnicity, income, and education
life style segmentation groups consumers by their activities, interests and opinions

Question 31

mission statement

Answer 31

what a business is trying to achieve
set values that enable employees to understand the basis for a business’ actions

Question 32

aim

Answer 32

a long term goal

Question 33

objectives
what do the need to be ?

Answer 33

something that states the plan of action needed to achieve the aims set by a business
S- Specific
M-Measurable
A-Attainable
R-Reliable
T-Time based

Question 34

Financial aims

Answer 34

survival, profit, sales, increased market share, financial security

Question 35

non-financial aims

Answer 35

social objectives(help others), personal satisfaction, challenge ,independence, control, power

Question 36

why aims and objectives differ

Answer 36

size of organisation, primary/secondary/tertiary sector, money available, reason for setting up, type of organisation, different sector

Question 37

revenue equation

Answer 37

number of sales X price per Unit

Question 38

total costs equation

Answer 38

fixed costs + variable costs

Question 39

variable costs?

Answer 39

Quantity x cost per unit

Question 40

equation for breakeven point

Answer 40

Fixed cost/ (selling price per unit)- (variable costs per unit)