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Flashcards in Unit Definitions Deck (235):
1

Consumer goods:

the physical and tangible goods sold to the public

2

Consumer services

the non-tangible products sold to the general public

3

Capital goods

the physical goods used by industry to aid in the production of other goods and services

4

Added value

the difference between the cost of purchasing the raw materials and the price the finished products are sold for

5

Entrepreneur

someone who takes the financial risk of starting and managing a new venture

6

Social enterprise:

a business that reinvests most of its profits into benefiting society rather than maximizing the returns to owners

7

Triple bottom line

the three objectives of social enterprises – economic, social and environmental

8

Private sectors

businesses owned and controlled by individuals or groups of individuals

9

Public sector

organisations accountable to and controlled by central or local government

10

Mixed economy

economic resources are owned and controlled by both private and public sector

11

Free-market economy

economic resources owned largely by the private sector with little or no government intervention

12

Command economy

economic resources owned, planned and controlled by the state

13

Sole trader

a business where one person provides the permanent finances and in return gets full control of the business

14

Partnership

a business formed by two or more people that share the capital and responsibility

15

Private limited company

a small to medium sized business that is owned by shareholders who are often friends or members of the sae family. They cannot sell shares to the general public

16

Shareholder

a person or institution owning shares in a limited company

17

Public Limit Company:

a large business that has the right to sell shares to the general public on the stock exchange

18

Memorandum of Association

this states the name and all its contact details

19

Articles of Association

this document covers the internal workings and control of the business

20

Franchise

a business that uses the name, logo and trading system of an existing successful business

21

Joint venture

two or more businesses agree to work closely together on a particular project and create a separate business division to do so

22

Holding company

a business organisation that owns and controls a number of separate businesses

23

Public corporation

a business enterprise owned and controlled by the state also known as nationalised industry

24

Privatisation

selling state-owned and controlled business organisations to investors in the private sector

25

Public-private partnerships (PPP)

these are government services or business ventures that are funded and managed through a partnership of government and one or more private-sector companies

26

Free trade

no restrictions or trade barriers exist that might prevent or limit trade between countries

27

Tariffs

taxes imposed on imported goods to make them more expensive than they would otherwise be

28

Quotas

limits on physical quantity or value of certain goods that may be imported

29

Voluntary export limits

an exporting country agrees to limit the quantity of certain goods sold to one country

30

Protectionism

using barriers to free trade to protect a countries own domestic industries

31

Globalisation:

the increasing freedom of movement of good, capital and people around the world

32

Multinational business

a business organisation that has its headquarters in one country but has operating branches, factories or assembly parts in other countries

33

Sales turnover:

total value of sales made by a business in a given period of time

34

Capital employed

the total value of all long-term finance invested in the business

35

Market capitalisation

the total value of a company’s issued shares

36

Market share

sales of the business as a proportion of total market sales

37

Internal growth

expansion of a business by means of opening new branches, shops or factories

38

External growth

: business expansion achieved by means of merging with or taking over another business, from either the same or different industry

39

Horizontal integration

integration with firms in the same industry and at the same stage of production

40

Vertical integration – forward

integration with a business in the same industry but a customer of an existing business

41

Vertical integration – backward

integration with a business in the same industry but a supplier of an existing business

42

Conglomerate integration

integration with a business in a different industry

43

Merger

an agreement by shareholders and managers of two businesses to bring both firms together under a common board of directors with shareholders of both businesses owning shares in the newly merged business

44

Takeover

when a company buys over 50% of the shares of another company and becomes the controlling owner of it

45

Synergy

the whole is greater than the sum of parts, therefore within integration, the new business will be better then what the two businesses were apart

46

Mission statement

a statement of the business’s core aims, phrased in a way to motivate employees and to stimulate interest by outside groups

47

Corporate social responsibility

the business considers the interest of society by taking responsibility for the impact of their decisions and activities on customers, employees, communities and the environment

48

Management by objectives

a method of coordinating and motivating all staff in an organisation by dividing its overall aim into specific targets for each department, manager and employee

49

Ethics

are the moral guidelines that determine decision making

50

Ethical code (code of conduct)

a document detailing a company’s rules and guidelines on staff behaviour that must be followed by all employees

51

Stakeholders:

people or groups of people who can be affected by, and therefore have an interest in any action by an organisation

52

Stakeholder Concept

the view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders

53

Social Audit

a report on the impact a business has on society. It covers pollution levels, health and safety, sources of supplies, customer’s satisfaction and contribution to the community

54

Monopoly

where there is one supplier to a market

55

Information Technology

the use of electronic technology to gather, store, process and communicate information

56

Computer-aided design

using computers and IT when designing products

57

Computer-aided manufacturing

the use of computers and computer controlled machinery to speed up the production process and make it more flexible

58

Environmental audits

assess the impact of a business’s activities on the environment

59

Pressure group

organisations created by people with a common interest or aim who put pressure on business and governments to change policies so that an objective is reached

60

Gross domestic product (GDP)

the total value of goods and services produced in a country in one year

61

Economic growth

an increase in a country’s productive potential measured by an increase in its real GDP

62

Business Investment

expenditure by businesses on capital equipment, new technology and research and development

63

The business cycle

the regular swings in economic activity which is measured by real GDP. It includes Boom, Recession, Slump and Recovery

64

Inflation

an increase in the average price level of goods and services. Results in a fall of the value of money

65

Deflation

a fall in the average price level of goods and services

66

Unemployment

when members of the working population are willing and able to work, but are unable to find a job

67

Working population

all those of age who are willing and able to work

68

Cyclical unemployment:

unemployment resulting from low demand for goods and services in the economy during a period of slow economic growth or a recession

69

Structural unemployment

unemployment caused by the decline in important industries, leading to significant losses in one sector of industry

70

Frictional unemployment:

unemployment resulting from workers losing or leaving jobs and taking a substantial period of time to find alternative employment

71

Balance of payments

this account records the value of trade in goods and services between one country and the rest of the world. A deficit means that the value of goods and services imported exceeds the value of goods and services

72

Imports

goods and services purchased from other countries

73

Exports

goods and services sold to consumers and business in other countries

74

Exchange rate:

the price of one currency in the terms of another

75

Exchange rate depreciation

a fall in the external value of a currency as measured by its exchange rate against other currencies

76

Fiscal policy

is concerned with decisions about government expenditure, tax rates and government borrowing

77

Government budget deficit

the value of government spending exceeds revenue from taxation

78

Government budget surplus

taxation revenue exceeds the value of government spending

79

Monetary policy

is concerned with decisions about the rate of interest and supply of money in the economy

80

Market failure

when markets fail to achieve the most efficient allocation of resources and there is under or over production of certain goods and services

81

External costs

costs of an economic activity that are not paid for by the producer or consumer but by the rest of society

82

Income elasticity of demand

measures the responsiveness of demand for a product after a change in consumer income

83

Manager:

responsible for setting objectives, organising resources and motivating staff so that the organisations aims are met

84

Leadership

the art of motivating a group of people towards achieving a common objective

85

Autocratic leadership

a style of leadership that keeps all decision making at the centre of the organisation

86

Democratic leadership

a leadership style that promotes the active participation of workers in taking decisions

87

Laissez – faire leadership

a leadership style that leaves much of the decision making to the workforce

88

Paternalistic leadership

a leadership style based on the approach that the manager is in a better position than the workers to know what is best for an organisation

89

Informal leader

a person who has no formal authority but has respect of colleagues and some power over them

90

Emotional intelligence (EI)

the ability of managers to understand their own emotions and those of the people they work with to achieve better business performance

91

Motivation:

the internal and external factors that stimulate people to take actions that lead to achieving a goal

92

Self-actualisation

a sense of self—fulfilment reached by feeling enriched and developed by what one has learned and achieved

93

Job enrichment

aims to use the full capabilities of workers by giving them the opportunity to do more challenging and fulfilling work

94

Motivating factors (Motivators)

): aspects of a workers job that can lead to positive job satisfaction such as achievement, recognition, meaningful and interesting work and advancement at work

95

Hourly wage rate

payment to worker made for each hour worked

96

Piece rate

a payment to a worker for each unit produced

97

Salary

: annual income that is usually paid on a monthly basis

98

Commission

a payment to a sales person for each sale made

99

Performance-related pay

a bonus scheme to reward staff for above average work performance

100

Profit sharing

a bonus for staff based on the profits of the business

101

Job rotation

increasing flexibility of workforce and the variety of work they do by switching from one job to another

102

Job enlargement

: attempting to increase the scope of a job by broadening or deepening the task undertaken

103

Quality circles

they are voluntary groups of workers who meet regularly to discuss work-related problems and issues

104

Worker participation

workers are actively encouraged to become involved in decision making within the organisation

105

Team working

production is organised so that groups of workers undertake complete units of work

106

Human resource management (HRM)

the strategic approach to the effective management of an organisation’s workers so that they help the business gain a competitive advantage

107

Workforce planning

analysing and forecasting the numbers of workers and the skills of those workers that will be required by the organisation to achieve its objectives

108

Workforce audit:

a check on the skills and qualifications of all existing workers/managers

109

Recruitment:

the process of identifying the need for a new employee, defining the job to be filled and the type of person needed to fill it, attracting suitable candidates for the job and selecting the best one

110

Job description

a detailed list of the key point about the job to be filled, stating all its key tasks and responsibilities

111

Person specification

a detailed list of the qualities, skills and qualifications that a successful applicant will need to have

112

Staff appraisal

: the process of assessing the effectiveness of an employee judged against pre-set objectives

113

Employment contract

a legal document that sets out the terms and conditions governing a workers job

114

Dismissal

being dismissed from a job due to incompetence or breach of discipline

115

Unfair dismissal

: ending a workers employment contract for a reason that the law regards as being unfair

116

Redundancy

when a job is no longer required, therefore the employee’s skills are no longer required

117

Temporary employment contract

employment contract that lasts for fixed time period

118

Part-time employment contract

employment contract this is for less than the normal full working week

119

Flexi-time contract

employment contract that allows staff to be called in at times most convenient to employers and employees

120

Outsourcing

not employing staff directly but by using an outside agency

121

Teleworking

staff working from home but keeping contact with the office by means of modern IT communication

122

Hard HRM

an approach to managing staff that focuses on cutting costs

123

Soft HRM

: an approach to managing staff that focuses on developing staff so that they reach self-fulfilment and are motivated to work hard and stay with the business

124

Labour productivity

the output per worker in a given time period: total output in time period / total staff employed

125

Absenteeism

measures the rate of workforce absence as a proportion of the employed total: no. of staff absent / total no. of staff x 100

126

Labour turnover

: measures the rate at which employees are leaving an organisation: number of staff leaving in time period / average no. of staff employed x 100

127

Trade union

an organisation of working people with the objective of improving the pay and working conditions of their members and providing them with support and legal services

128

Conciliation

the use of a third party in industrial disputes to encourage both employer and union to discuss an acceptable compromise solution

129

Arbitration

resolving an industrial dispute by using an independent third party to judge and recommend an appropriate solution

130

Organisational structure

the internal, formal framework of a business that shows the way in which management is organised and linked together and how authority is passed through the organisation

131

Matrix structure

an organisational structure that creates project teams that cut across traditional functional departments

132

Level of hierarchy

a stage of the organisation structure at which the personnel on it have equal status and authority

133

Chain of command

this is the route through which authority is passed down an organisation

134

Span of control

the number of subordinates reporting directly to a manager

135

Delegation

passing authority down the organisational hierarchy

136

Centralisation

keeping all of the important decision-making powers within head office or the centre of organisation

137

Decentralisation:

decision-making powers are passed down the organisation to empower subordinates and regional/product managers

138

Delayering

removal of one or more of the levels of hierarchy from an organisational structure

139

Line managers

managers who have direct authority over people, decisions and resources within the hierarchy of an organisation

140

Staff managers

managers who, as specialists, provide support, information and assistance to line managers

141

Informal organisation

too many messages and too much information received that the most important ones can’t be identified and acted on

142

Effective communication

the exchange of information between people or groups with feedback

143

Information overload

: too many messages and too much information received that the most important ones can’t be identified and acted on

144

Communication barriers

reasons why communication fails

145

Formal communication networks

the official channels and routes used within an organisation

146

Informal communication

unofficial channels of communication that exists between informal groups within an organisation

147

Marketing

the management task that links the business to the customer by identifying and meeting the needs of customers profitably

148

Consumer markets

markets for goods and services bought by the final user of them

149

Industrial market

markets for goods and services bought by businesses to be used in the production process of other products

150

Marketing objectives

the goals set for the marketing department to help the business achieve its overall objectives

151

Marketing strategy

long-term plan established for achieving marketing objectives

152

Market orientation

an outward-looking approach basing product decisions on customer demand, as established by market research

153

Product orientated

an inward-looking approach that focuses on making products that can be made and then trying to sell them

154

Asset-led marketing

an approach to marketing that bases strategy on the firms existing strengths and assets instead of purely what the customers want

155

Societal marketing

this approach considers not only the demands of customers but also the effects on all members of the public involved in some way when firms meet these demands

156

Demand:

the quantity of a product that consumers are willing and able to buy at a given price in a time period

157

Supply

the quantity of a product that firms are willing and able to supply at a given price in a time period

158

Equilibrium price

the market price that equates supply and demand of a product

159

Market size

the total level of sales of all producers within a market

160

Market growth

the percentage change in the total size of a market (volume or value) over a period of time

161

Market share

: the percentage of sales in the total market sold by one business

162

Product differentiation

making a product distinctive so that it stands out from competitors’’ products in consumers’ perception

163

Unique selling point (USP

the special feature of a product that differentiates it from competitors’ products

164

Niche marketing

identifying and exploiting a small segment of a large market by developing products that suit it

165

Mass marketing

: selling the same products to the whole market with no attempt to target groups within it

166

Market segmentation

: a sub-group of a whole market in which consumers have similar characteristics

167

Market segmentation

identifying different segments within a market and targeting different products or services to them

168

Consumer profile

a qualified picture of consumers of a firms products, showing proportions of age groups, income levels, location, gender and social class

169

Market research

this is the process of collecting, recording and analysing data about the customers, competitors and the market

170

Primary research

the collection of first hand data that is directly related to a firms needs

171

Secondary research:

collection of data from second hand sources

172

Qualitative research

research into the in-depth motivations behind consumers buying behaviour or opinions

173

Focus groups

a group of people who are asked about their attitude towards a product, service, advertisement or new style of packaging

174

Quantitative research

: research that leads to numerical results that can be statistically analysed

175

Sample:

the group of people taking part in a market research survey selected to be representative of the overall target market

176

Random sampling

every member of the target population has an equal chance of being selected

177

Systematic sampling

every nth item in the target population is selected

178

Stratified sampling

this draws a specified sub-group or segment of the population and uses random sampling to select an appropriate number from each stratum

179

Quota sampling

when the population has been stratified and the interviewer selects an appropriate number of respondents from each stratum

180

Cluster sampling

using one or a number of specific groups to draw samples from and not selecting from the whole population

181

Arithmetic Mean

calculating by totalling all the results and dividing by the number of results

182

Mode

the value that occurs most frequently in a set of data

183

Median

the value of the middle when data have been ordered or ranked

184

Range

the difference between the highest and lowest value

185

Inter-quartile range

the range of the middle 50% of the data

186

Marketing mix:

the four key decisions that must be taken in the effective marketing of a product

187

Customer relationship marketing (CRM)

using marketing activities to establish successful customer relationships so that existing customer loyalty can be maintained

188

Product:

the end result of the production process sold on the market to satisfy a customer’s needs

189

Consumer durable

: manufactured product that can be reused and is expected to have a reasonably long life

190

Brand

: an identifying symbol, name, image or trademark that distinguishes a product from its competitors

191

Product positioning

the consumer perception of a product or service as compared to its competitors

192

Product life cycle

the pattern of sales recorded by a product from launch to withdrawal from the market

193

Extension strategies

these are marketing plans to extend the maturity stage of the product before a new one is needed

194

Price elasticity of demand

measures the responsiveness of demand following a change in price

195

Mark up pricing

adding a fixed mark up for profit to unit price of a product

196

Target pricing

setting a price that will give a required rate of return at a certain level of output/sales

197

Full-cost pricing

setting a price by calculating a unit cost for the product and then adding a fixed profit margin

198

Contribution cost pricing

setting prices based on the variable costs of making a product in order to make a contribution towards fixed costs and profit

199

Competition-based pricing

a firm will base its price upon the price set by its competitors

200

Penetration pricing

setting a relatively low price often supported by strong promotion in order to achieve a high volume of sales

201

Market skimming

setting a high price for a new product when a firm has a unique or highly differentiated product with low price elasticity of demand

202

Promotion

the use of advertising, sales promotion, personal selling, direct mailing, trade fairs, sponsorship and public relations to inform consumers and persuade them to buy

203

Promotion mix

the combination of promotional techniques that a firm uses to sell a product

204

Advertising

paid-for communication with consumers to inform and the combination of promotional techniques that a firm uses to sell a product persuade

205

Above the line promotion

a form of promotion that is undertaken by a business by paying for communication with consumers

206

Sales promotion

: incentives such as special offers or deals directed at consumers or retailers to achieve short-term sale increases and repeated purchases by consumers

207

Below the line promotion

promotion that is not a directly paid for means of communication but based on short term incentives to purchase

208

Personal selling

a member of staff communicates with one customer with the aim of selling the product and establishing a long term relationship between the company and consumer

209

Sponsorship

payment by a company to the organisers of an event so that the company name becomes associated with the event

210

Public relations

the deliberate use of free publicity provided by newspapers, TV, and other media to communicate with and achieve understanding by the public

211

Marketing or promotion budgeting

the financial amount made available by a business for spending on marketing/promotion during a certain time period

212

Channel of distribution

this refers to the chain of intermediaries a product passes through from producer to final consumer

213

Internet marketing

the marketing of products over the internet

214

Viral marketing:

the use of social networking sites or text messages to increase brand awareness or sell products

215

Integrated marketing mix:

the key marketing decisions complement each other and work together to give customers a consistent message about the product

216

Marketing plan

: it is a detailed, fully researched written, report on marketing objectives and the marketing strategy to be used to achieve them

217

Promotional elasticity of demand

this measures the responsiveness of demand for a product following a change in the amount spent on promoting it

218

Cross elasticity of demand

this measures the responsiveness of demand for a product following a change in the price of another product

219

AIDA

: this is a model that explains the successive stages a customer passes through in buying a product: Attention Interest Desire Action

220

DAGMAR

a process of establishing goals for a promotion campaign so that it is possible to determine whether it has been successful or not: Defining Advertising Goals for Measured Advertising Results

221

New product development (NPD):

the design, creation and market of new goods and services

222

Test marketing

the launch of the product on a small scale market to test consumers’ reactions to it

223

Research and Development

the scientific research and technical development of new products and processes

224

Sales forecasting

predicting future sales levels and sales trends

225

Sales-force composite

a method of sales forecasting that adds together all of the individual predictions of future sales of all of the sales representatives working for a business

226

Delphi method

a long-range qualitative forecasting technique that obtains forecasts from a panel of experts

227

Jury of experts

the jury of experts uses the specialists within a business to make forecasts for the future

228

The trend

: this is the underlying movement in a time series

229

Seasonal fluctuations

: these are the regular and repeated variations that occur in sales data within a period of 12 months

230

Cyclical fluctuations

: these variations in sales occur over periods of time of much more than a year and are due to the business cycle

231

Random fluctuations

these can occur at any time and will cause unusual and unpredictable sales figures

232

Globalisation

the growing trend towards worldwide markets in products, capital and labour, unrestricted by barriers

233

International marketing

selling products in markets other than the original domestic market

234

Pan global marketing

adopting a standardised product across the globe as if the entire world were a single market

235

Global localisation

adapting the marketing mix, including differentiated products, to meet national and regional tastes and cultures