Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

IB business management HL > unit 3 > Flashcards

unit 3 Flashcards

1
Q

How to calculate profit

A

Revenue - Costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Definition of revenue and how to calculate it

A
  • the total income received from the sale of a good or service
  • total revenue - price x quantity sold
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Pros/cons of many revenue streams

A

PRO
- Allow the business to generate extra revenue and profit
- Don’t have to rely on one source of revenue as much

CON
- May distract the business from its core focus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Definition and examples of revenue streams

A

The income that a business gets from different business activities

  • selling goods and services
  • advertisements on website
  • merchandise (merch)
  • sponsorships (eg. football teams)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Fixed cost definition and example

A
  • doesn’t matter how much is produced - the costs stays the same no matter the level of production/sales
  • eg. rent, property tax, interest on a bank loan
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Variable costs definition and examples

A
  • costs that increase as the output increases (as more goods are produced)
  • eg. raw materials, packaging
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How to calculate total variable cost

A

Total variable cost = Quantity x variable cost per item

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Formula for profit

A

Profit = Revenue - Fixed Costs - Total Variable Costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Definition of Cashflow Forecast

A

A statement that shows the expected cash a business expects to receive and pay out over a period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Cashflow Forecast Structure

A

A. Opening balance
B. Cash inflows
C. Cash outflows
D. Net cash flow (B-C)
E. Closing balance (A+D)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Examples of cash inflows/outflows

A

inflows
- sales revenue
- owners capital
- sale of fixed assets
outflows
- rent
- wages
- purchase of inputs and materials

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the difference between profit and cashflow?

A

In situations where trade credit is given (for example 30 days)
Revenue - added to chart immediately
Cashflow - added to chart after 30 days (when the money actually flows through)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Causes of Cash Flow problems (5)

A
  • Unprofitable business (business making a loss)
  • Giving too much trade credit to consumers
  • Expanding too quickly (have to pay to expand - profits come slower)
  • Having too much stock (pay suppliers - wait for cash to come in from sales)
  • Seasonal demand problems (eg. ski - higher sales during winter)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Strategies for dealing with cash flow problems

A

Improving cash inflows
- Improve credit terms (eg. trade credit from 60-30 days)
- Any sources of finance (bank loan, share capital etc.)
- Sell assets
- Short term promotion (eg. discounts)

Reducing cash outflows
- Find cheaper suppliers
- Delay payment to creditors (eg. longer trade credit)
- Reduce stock
- Cut unnecessary overheads

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is working capital?

A

Funds available for the day-to-day running of the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Definition of Liquidity

A

How quickly an asset can be turned into cash

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Working Capital Cycle components

A

A. Cash in
B. Payment to suppliers/employees/cash (cash out)
C. Goods produced
D. Goods sold

rate of B-D = shows successfulness

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is the relationship between investment, profit and cashflow

A

investment - large sum of money needed
profit - investment should lead to higher future profit
cash - large outflow to start with, followed by small cash inflows

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Definition of business investment

A

committing money or resources to a idea with the expectation of generating profits or returns in the future.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

How can business investments lead to cash flow problems in the short run

A

large outflow at first - large sum of money payed for investment

21
Q

What is market planning?

A
  • identifying the marketing goals of a business and what strategies they will use to achieve those goals
  • how are we going to get consumers to buy our product?
22
Q

What is in a marketing plan?

A

might include
- marketing objectives (eg. increase market share)
- marketing strategies (target new customer)
- target market
- market research competitors
- marketing budget

23
Q

3 roles of marketing planning

A
  1. set objectives
    - target market
    -increase market share
  2. marketing strategies
    - market research
    - implement strategies
  3. reflection and evaluation
    - did the strategies meet the objectives?
24
Q

definition of mass marketing

A

when’s business aims to sell a product to all consumers in the market
- an undifferentiated strategy (does not target anyone in particular)

25
definition on niche marketing
when a business focuses on a specific and well-defined segment or part of the market - a differentiated strategy (aimed at certain consumers)
26
PROS of mass marketing
- more potential customers - higher sales - higher brand recognition - lower costs as higher production leads to economies of scale
27
PROS niche marketing
- product is designed for its consumers so brand loyalty - less competition so can charge higher prices for specialised products - can specialise and focus on target customers
28
generally - would a new company work in the mass market or niche market - why?
niche - less competition
29
what is product differentiation?
- ways in which a business’ products are different to the competition
30
what is a USP, examples?
UNIQUE SELLING POINT/PROPOSITION - any aspect of a business that makes it appear different to the competition in the mind of the consumers eg. - best/cheapest - well known slogans/adverte - first/original - shopping experience - home delivery
31
pros / cons of product differentiation (having a usp)
PROS - brand image - increased brand loyalty - can charge higher prices - more resistant to changes in the market CONS - marketing costs - can be copied by competitors - might limit the potential audiemce
32
What is a market segment
- a part of a market where consumers share characteristics which are the same eg. clothing market - male youth - sportswear
33
what is market segmentation?
- breaking a market into different parts, where consumers in each segment have similar characteristics
34
3 different types of market segmentation
1. demographic segmentation 2 geographic segmentation 3. psychographic segmentation
35
What is target marketing?
targeting your product towards a certain market segment
36
examples of demographic segmentation
- age - gender - race - religion - marital status - education - income - language
37
examples of geographic segmentation
- local tastes - local culture - climate - urban/rural - population density
38
examples of psychographic segmentation
- lifestyle - hobbies and interests - values - motivation
39
what is a customer profile?
a system that identifies customers in each segments - able to tailor their marketing toward them through profiles and information on each persin
40
What is a PPM?
Product positioning matrix - product perception map - 2 x 2 visual tool that shows customer perceptions of a product or brand compared to competitors x and y axis - two key characteristics important to customers
41
Why do businesses create PPMs?
- gain information on the market - find gaps in the market (less competition - more successful) - repositioning - create a product portfolio - range of product that target different segments
42
what is revenue expenditure
The cost of the day-to-day running of a business
43
what is phsycographic segmentation?
a market research method used to divide a market or customer group based on their beliefs, values, lifestyle, social status etc.
44
definition of direct costs
- costs that can be clearly identified with production of each unit of production or a project - eg. cost of meat in hamburgers, cost of business teachers in business education
45
what are indirect costs/overheads
- costs that cannot be clearly identified with each unit of production - costs that don’t contribute to production but keep the company going - eg. costs of cleaning a school or business (but cannot be attributed to a single class) ceo salary
46
CONS of mass marketing
- limited personalisation - competition due to the many competitors - it could lead to a great competition at some points - waste of resources: Resources may be wasted on reaching individuals outside the target market.
47
CONS mass marketing
- Limited Personalization: Mass marketing may lack personalization, leading to a less targeted message. - Competition: Intense competition can arise in saturated markets. - Waste of Resources: Resources may be wasted on reaching individuals outside the target market. —————————- Since mass marketing aims to reach a broad audience, there is a risk of investing resources in advertising or promotional activities that do not effectively resonate with or attract the intended consumers
48
CONS niche marketing
- Limited Market Size: The size of the niche market may be smaller, limiting potential revenue. - Risk of Dependence: Dependence on a narrow market can pose risks if it becomes less profitable or experiences changes. - Higher Costs: Operating in a niche may involve higher production costs per unit due to lower economies of scale.

IB business management HL (15 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions