Theme 1: Investigating a small business

Question 1

define enterprise

Answer 1

business

Question 2

define entrepreneur

Answer 2

the person who starts a business taking a calculated risk

Question 3

define goods

Answer 3

a physical product that can be held (tangible), used and stored

Question 4

define services

Answer 4

intangible actions

Question 5

define dynamic

Answer 5

always fluctuating

Question 6

define obsolete

Answer 6

no longer wanted/in use

Question 7

define innovation

Answer 7

new ideas, creations and methods

Question 8

why is the market dynamic?

Answer 8

• customer needs/demands change
• new features, tech
• things become obsolete

Question 9

define added value

Answer 9

the difference between the cost of making (input) and the price you are selling it at (output)

Question 10

define USP

Answer 10

Unique Spelling Point - a feature a business that has to stand out from the competition

Question 11

how can a business add value? (3)

Answer 11

• focus on target audience
• design
• have USP
• branding
• convenience
• quality

Question 12

how can a business benefit from adding value? (3)

Answer 12

• charging a higher price
• attracting more customers
• competing with competitors

Question 13

what are some rewards for enterprise? (3)

Answer 13

• profits
• capital gains (made by selling part/full of the business)
• self-esteem
• independence
• satisfaction

Question 14

what are some risks for starting a business? (3)

Answer 14

• no investment
• loose time
• loose passion
• financial instability
• debt
• business failure

Question 15

define aim

Answer 15

states the overall purpose for the business (long terms goal)

Question 16

define objectives

Answer 16

specific measurable targets to help meet the aims

Question 17

what does SMART stand for?

Answer 17

Specific
Measurable
Attainable
Relevant
Time-based

Question 18

what categories are there in customer needs?

Answer 18

• price
• quality
• choice
• convenience

Question 19

how can a business meet customer needs?

Answer 19

• mass market
• personal relationships with customers
• niche market

Question 20

define market research

Answer 20

gathering info about the market and customer needs in order to inform business decisions

Question 21

why research the market?

Answer 21

• reduce the risk of failure
• find out customer needs
• predict and be prepared for market changes

Question 22

what are types of market research?

Answer 22

• primary research
• secondary research

Question 23

what are examples of primary research methods?

Answer 23

• Interviews
• Observation
• Questionnaire

Question 24

what are examples of secondary research methods?

Answer 24

• internet
• businesses’ own sales records
• government stats

Question 25

what is the research process?

Answer 25

- identify what needs to be found out - choose research method - data gathered and analysed

Question 26

define sample

Answer 26

a small group of people within the population which is chosen to be surveyed

Question 27

what are the 2 types of data?

Answer 27

qualitative and quantitative data

Question 28

define qualitative data?

Answer 28

the opinions and attitudes of target audience

Question 29

define qualitative data

Answer 29

data that can be expressed as stats and numbers

Question 30

define market segmentation

Answer 30

dividing up the market or potentials customers into groups

Question 31

what are some types of market segmentation?

Answer 31

- location - demographics - behaviour - lifestyle - income

Question 32

name a benefit from market segmentation

Answer 32

increases brand loyalty and repeat custom

Question 33

name a drawback from market segmentation

Answer 33

increased costs linked to research

Question 34

what does market mapping show?

Answer 34

shows the position of products in terms of 2 qualities which are important to customers

Question 35

what is the marketing mix?

Answer 35

factors that help businesses take into account customer needs when selling products

Question 36

what are the 4Ps

Answer 36

Price Product Place Promotion

Question 37

when should a business charge a high price? (3)

Answer 37

- good brand loyalty - lack of supply/high demand - competition charges high prices

Question 38

when should a business charge a low price? (3)

Answer 38

- lots of supply/low demand - poor quality - sell stock quickly

Question 39

what are the 4 catgories a business can sell its product/services as in terms of price and quality?

Answer 39

Economy (L&L) Skimming (Lq&Hp) Market penetration (Lp&Hq) Premium (H&H)

Question 40

what is direct competition?

Answer 40

businesses that produce the same good/services as you

Question 41

what is indirect competition?

Answer 41

businesses that produce alternatives to what you do

Question 42

impacts of competition on the marketing mix?

Answer 42

- product will constantly develop - price might be lowered - promotion might increase - place focused on customers as opposed to the business

Question 43

impacts of NO competition on the marketing mix?

Answer 43

- product may be lower quality - price high - promotion no need - place focused on business convenience as opposed to customers

Question 44

what are advantages of e-commerce? (3)

Answer 44

- can sell 24/7 - expand to (inter)national - easy data recording and analysis

Question 45

what is a disadvantage of e-commerce?

Answer 45

can't have personal contact with customer

Question 46

what are some types of promotion? (3)

Answer 46

- tv adverts - word of mouth - product placement - billboards - personal selling - direct mail

Question 47

how is Place different to loction?

Answer 47

place is based on how the products get from producer to consumer and where they can access them (location is where the business is setup)

Question 48

what are the main factors influencing a business's location? (3)

Answer 48

proximity to: - raw materials - the market - labour - competition costs to run nature of business

Question 49

define fixed costs

Answer 49

costs that do not vary directly with output

Question 50

define variable costs

Answer 50

costs that vary directly with output

Question 51

how to calculate the contribution per unit?

Answer 51

the price - VC per unit

Question 52

what is the break even point?

Answer 52

the number of units its needed to sell to pay of all costs (no profit or loss)

Question 53

how to calculate BE?

Answer 53

FC/contribution per unit

Question 54

define revenue

Answer 54

the money made from sales of goods and services

Question 55

how to calculate revenue?

Answer 55

FC/contribution per unit

Question 56

what is the BE on a graph?

Answer 56

when the total revenue = total costs

Question 57

define profit

Answer 57

the money you take after paying the costs

Question 58

how to calculate profit?

Answer 58

unit contribution x N.O of sales over breakeven OR total revenue - total costs OR margin of safety x unit contribution

Question 59

how to calculate total costs

Answer 59

(VC x N.O of sales) + FC

Question 60

how to calculate BE

Answer 60

FC/contribution costs

Question 61

what is the margin of safety?

Answer 61

the difference between the actual output and the BE output

Question 62

what is cash inflow?

Answer 62

the money that moves into the business

Question 63

what is cash outflow?

Answer 63

the money that moves out of the business

Question 64

what is net cash flow

Answer 64

inflow - outflow

Question 65

define USP

Answer 65

unique selling point - something that makes product stand out from its competitors