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Flashcards in Unit 1 Revision Deck (100):
1

What does market research tell a business?

How much they are willing to pay
What features customers want
Who their competitors are

2

What are examples of primary research?

Focus groups
Surveys
Questionnaires

3

What are examples of secondary research?

Internet
Newspapers
Government statistics

4

What are the advantages of primary research?

More accurate
Up to date
Specific to needs

5

What are the advantages/ disadvantages of secondary research?

More general
Less time consuming
Data may be out of date

6

What is qualitative data?

Information about opinions, judgements and attitudes

7

What is quantitative data?

Data that can be expressed as number and statistically analysed

8

What is market mapping?

It helps businesses to identify market segments and position their products through identifying gaps in the market

9

How can businesses analyse potential customers buying preferences?

Finding information about customers
Observations and surveys

10

What is a market segment?

It’s a group of buyers with similar characteristics and buying habits

11

How can markets be segmented?

Through:

Gender
Age
Income
Lifestyle
Lifestage

12

What does market segmentation allow a business to?

Meet specific customer needs
Differentiate their products
Develop a unique brand image

13

What is market mapping?

A market map is a diagram that can be used to position and compare products in a market and identify opportunities where customer needs aren’t being met

14

What are the ways a business can compete?

Wider product range
Better design
Higher quality
Stronger brand image

15

Define branding

A brand is a named product that customers see as being different from other profits and that they can associate or identify with

16

What is added value?

The increased worth that a business creates for a product. It’s the difference between what a business pays its suppliers and how much the product is charged

17

How can a business add value to its products

Lowering costs
USP
Better designs

18

What is the importance of added value?

The more value a business can add to its products, the more chance the business has of success, survival and long term growth

19

What is a USP?

It’s another way to add value to a product. Also helps a business to compete

20

What is a franchise?

It’s the right given by one business to other businesses to sell goods or services using its name

21

What is a franchisor?

The business that gives franchisees the right to sell its product or service

22

What is a franchisee?

A business that agrees to manufacture, distribute or provide a branded product, under licence by a franchisor

23

What is the principle of franchising?

The expansion of an established business through licensing the right for entrepreneurs to set up their own business using their name

24

What does the franchisee get when they buy a franchise?

An established brand name
Training
Equipment
Ongoing support

25

What are the benefits of a franchise ?

Brand image and an established reputation
Expensive marketing costs are covered
Higher chance of survival
Training provided

26

What are the drawbacks of a franchise?

Start up costs can be expensive
Royalty payments
Lack of control

27

What is an enterprise?

The initial spark and idea for a business and the willingness by an individual to show initiative, take a risk and undertake a new venture

28

What is an entrepreneur?

A person who owns and runs their own business and takes risks

29

What are enterprises?

Another word used for businesses

30

What are the skills an entrepreneur must have?

To take risks
To show initiative
Willingness to understate new ventures

31

What are the aspects of thinking creatively?

Considering ‘what if’ questions
Unique ideas and products
Improved customer service

32

What is deliberate creativity?

The intentional creation of new ideas through recognised and accepted techniques

33

What are examples of deliberate creativity?

Creating lists
Mind mapping

34

What is blue skies thinking?

Coming up with as many ideas as possible to solve a problem

35

What is lateral thinking?

Involves thinking differently to try to find new and unexpected ideas. De Bono’s six thinking hats is an example of lateral thinking

36

What does the white hat represent?

Facts about an idea

37

What does the green hat represent?

How to get around a problem creatively

38

What does the blue hat represent?

Thinking about what they are thinking

39

What does the red hat represent?

Emotions are gut feelings about an idea

40

What does the black hat represent?

Difficulties of the idea

41

What does the yellow hat represent?

Positive aspects of the idea

42

What is invention?

The thought process using research and development

43

What is innovation?

Bringing a product into the market

44

What are the drawbacks of innovation and invention?

Risky
Time consuming
Many products fail before they reach the market

45

What is a patent?

Right of ownership of an invention, design or process when it’s registered with the government

46

What is copyright?

Legal ownership of material such as books, music and films which prevent these being copied by others

47

What are trademarks?

The logo, symbol, sign or other features of a product or business that cannot be copied by others

48

What is a calculated risk?

Putting a numerical value or probability on a risk and the likelihood of it coming true

49

What are examples of a calculated risk?

50:50 chance of an adverts success
1 in 3 chance of a business failing
10% of customers will return products

50

What are important enterprise skills?

Planning
Drive
Thinking ahead
Determination
Seeing opportunities

51

What are fixed costs?

They don’t vary e.g. salaries and rent

52

What are variable costs?

They change due to how many products are sold. E.g if there is an increase in demand in a product, the amount of packaging needed will increase

53

What does profit do for a business?

Allows them to:

Survive
Expand
Reward employees

54

What are ways that businesses can increase their profits?

Lower variable costs
Lower fixed costs
Increase sale price

55

Why does making a loss impact a business?

Unable to repay loans
Unable to pay bills e.g wages
Leading to the business needing to close

56

What impacts on cash flow?

Change in costs
Business expanding or closing stores
Change in stock levels

57

What does insolvency mean?

When the business doesn’t have sufficient cash within the business.

58

What does insolvency lead to?

Won’t be able to pay debts
Repay loans
Pay wages

59

What is cash flow?

The amount of money flowing into and out of a business on a daily business

60

What is a business plan?

A plan for the development of a business

61

What does a business plan allow businesses to do?

Get a bank loan
Identify the needs of customers
Provide the owner with a plan of action that will minimise risk

62

What goes into a business plan?

Overview, objectives, market research, personnel, finances and production

63

What are long term sources of finance?

Personal savings
Grants
Loans
Mortgage

64

What is a venture capitalist?

An external investor looking for fast growth and return on their investment

65

What is a share?

A share is part ownership in a business

66

What is a start up?

A limited compared can sell shares to potential investors to raise capital

67

What are shareholders?

Investors that own a part of the business

68

What are short term sources of finance?

Bank overdraft
Trade credit
Credit cards
Delayed payment

69

What are the three stages of being customer focused?

Identifying needs
Anticipating needs
Meeting customer needs

70

What are the aspects of the marketing mix?

Product
Place
Price
Promotion

71

What is unlimited liability?

Sole traders are businesses owned by one person

72

What are the disadvantages of being a sole trader?

The owner is legally responsible for any debts of the business. There is a risk of losing personal belongings

73

What is limited liability?

Private limited companies. Those that invest only lose what they’ve invested. Their personal belongings are not liable

74

Why is important to have legislation?

Government keep track of business activity
Taxes can be collected
Protect businesses from illegal activity

75

What are the taxes on a small business?

Value added tax
Income tax
National insurance
Corporation tax

76

What is VAT?

A tax on the value of sales of a business

77

What is income tax?

A tax on the income earned by workers and sole traders

78

What is national insurance?

A tax on earnings of workers and sole traders to state benefits

79

What is corporation tax?

A tax paid by limited companies on the profits of the company

80

What is customer satisfaction?

A measure of how much a business or its products meet customer expectations

81

What factors contribute to god customer service?

Being polite and friendly
Being convenient
Dispatching orders quickly

82

Benefits of good customer satisfaction?

Repeat purchase
Loyalty
Can differentiate a business and become their USP

83

How can repeat purchases be stimulated?

Cheaper prices than competitors
Easy and convenient service
Effective customer service

84

Why is a motivated work force a good thing?

Paying fair wages
Providing good working conditions
Training
Encouraging and rewarding staff

85

What does supply mean?

Supply for a product is the amount that sellers are willing and able to sell at any given price

86

What is the definition for demand?

Demand for a product is the amount that buyers are willing and able to purchase at any given price

87

What is the definition of a market?

A market is where buyers and sellers meet to exchange products and services

88

What is a stakeholder?

An individual or a group that has an interest in and is affected by the activities of a business

89

What are examples of stakeholders?

Government
Suppliers
Owners
Customers
Competitors

90

What is the formula for total revenue?

Price x quantity

91

What is the formula for total costs?

Fixed costs+variable costs

92

What is the formula for breakeven?

Fixed costs divided by (price - variable costs per unit)

93

What is the formula for margin of safety?

Actual output- variable costs per unit

94

What is the formula for net cash flow?

Total inflow-total outflow

95

What is the formula for closing balance?

Opening balance- or + net cash flow

96

What is the recruitment process?

Drawing up recruitment documents
Receive applications
Shortlisting
Selection
Training

97

What happens if Interest rates increase?

People will be reluctant to spend as the longer they keep their money in the bank, the more interest they will receive

98

What happens if there is a fall in interest rates?

Customers are more willing to spend their money as the longer they keep the money in the bank ,they won’t get as much interest on their money

99

What is a benefit of a fall in the value of the pound?

The prices of exports falls. Sales increase

100

What happens if there is a rise in the value of the pound?

Bad for U.K. exporters of goods. Sales will fall