Business Key term theme 1

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  • Created by: JudyF
  • Created on: 22-01-18 09:11
Adding Value
Difference between selling price and costs of its material inputs.
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Autocratic
Top-down decisions without consultation. Delegation is rare.
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Bias
If the sample includes disproportionate number of people from a particular market segment.
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Boston Matrix
Analyses company's products in terms of market share and growth potential.
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Branding
Creating a positive and recognisable image of the product or service.
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Business Objectives.
Goals and Targets that the business needs to achieve in order to make progress towards the long-term aim.
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Business To Business
Process of selling products or services to other businesses.
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Business To Consumer
Involves selling directly to customers who are buying products or services for personal use.
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Cash Cow
Large share of a slow growing or static market. Sells very well and doesn't require much promotion.
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Centralised Structure
All decision-making is at the top of the hierarchy.
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Collective Bargaining
Discussions between employers and representatives of employees, often a trade union.
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Competition
Lower prices, better quality, more choice, innovation, greater efficiency.
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Competitive Advantage
Having an edge over rival products. May be based on low costs and keen prices or an innovative design feature.
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Competitive Pricing
Charging about the same as, or a little less than, the prices of competing products.
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Cost Plus Pricing
Adding certain percentage to the average total cost of the product.
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Decentralised Structure
Businesses have moved the decision making process away from a central head office and spread it throughout the organisation.
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Delayering
Reducing the amount of middle managers
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Delegation
Allowing decisions to be taken at a lower level.
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Democratic
Guide rather than dictate, consulting widely and encouraging everyone to participate in the decision- making process.
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Design Mix
Function, Aesthetics, Cost
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Dismissal
The worker is sacked.
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Distribution Channel
Route taken by the product as it moves from the producer to the customer. Producer -> Wholesaler -> Retailer -> Customer
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Dog
Low share of low growth market. Best strategy is usually to discontinue production.
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Dynamic Market
Constantly changing market. Can be due to rising incomes, fashions or arrival of a superior competing product.
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Elasticity
Responsiveness to change.
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Emotional Branding
Creation of brands that appeal to a customer's emotional nature rather than their logical side.
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Empowerment
Giving employees some discretion as to how they carry out their tasks.
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Entrepreneur Characteristics
Hard work, motivation, risk-taking, initiative, creativity, resilience, perseverance, market understanding.
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Equilibrium Point
The quantity demanded is the same as the quantity supplied. There will be no unsold products.
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Extension Strategies
Used when sales are slowing. This could be re- launching the product or re-branding.
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External Recruitment
Potential candidates are found from outside the organisation, either by advertising or using recruitment agencies.
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Flexible Hours
Requires the employee to work a certain number of hours in a given time period but the employees can choose their own hours.
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Flexible Workforce
Workforce that can adapt quickly, e.g. to a sudden change in customer demand.
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Herzberg's Two Factor Theory
Motivating factors and hygiene factors. Hygiene factors can only dissatisfy employees if they are not met.
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Hierarchy
Employees are ranked in layers, one above the other, in a typical pyramid shape.
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Income Elastic
Income change causes proportionately bigger change in quantity demanded. x>1
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Income Elasticity of Demand
How much a change in income leads to a change in demand.
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Income Inelastic
Income change causes proportionately smaller change in quantity demanded. 0 < x < 1
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Individual Approach
Direct discussions between an employer and an individual.
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Induction
Induction
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Inferior Good
Demand decreases as income increases. E.g. Aldi Baked Beans
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Innovation
Bringing a new idea into existence and using it.
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Internal Recruitment
Potential applicants are found within the organisation
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Labour Turnover
Rate at which staff leave the business
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Laissez Faire
Set the initial agenda and then give staff complete freedom to complete the task.
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Leadership
Art of motivating and organising a group of people to achieve a common goal.
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Limited Company
Owned by its shareholders.
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Luxury Good
Demand increases as income increases. E.g. Jaguar
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Marketing Objectives
Longer term marketing goals and targets.
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Market Map
Plots brands in the market according to how they meet customers' needs. It uses two sets of criteria such as quality and prices.
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Market Orientation
Business will focus on customer preferences and needs, involves expensive market research.
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Market Segmentation
Way markets can be divided up, each with different customer preferences. E.g. income level or gender.
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Market Share
Amount sold by a single business as a percentage of total market.
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Market Size
Measured by either value or volume.
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Maslow Hierarchy of Needs
Self-Actualisation Self-Esteem Social Needs Safety Needs Basic Physical Needs for Survival.
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Mass Market
Large market where most people tend to buy same or similar products. E.g. laundry detergents.
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Matrix Structure
Individuals are assigned to teams according to their specialism.
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Mayo Human Relations
Focuses on addressing human needs, social and psychological factors.
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Multi-skilling
Practice of training employees so that they can do a range of tasks.
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Niche Market
Small market with specific needs for specialised products or services. E.g. high quality chocolate.
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Opportunity Cost
Cost of giving up something in order to do or buy something else.
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Organisational Structure
Framework which shows how a business arranges its lines of authority and communications.
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Outsourcing
Where business tasks or processes are undertaken by an external provider. E.g. office cleaning.
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Partnership
Two or more people working together. Unlimited liability.
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Paternalistic
Behave like a parent might in making decisions. Consult early on and at every level and explain their reasons.
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Penetration Pricing
Used to enter a new market. Lower price is used to gain customers and penetrate the market.
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Personal Branding
Individuals who have become their own brand.
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Predatory Pricing
Prices set at a very low level, possibly even below costs of production, in order to destroy competition. Effective but illegal.
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Premium Pricing
Ability to charge higher price than competition without losing sales.
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Price Elastic
Price Change causes proportionately bigger change in quantity demanded. Beyond -1.
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Price Elasticity of Demand
How much a price change leads to a change in demand.
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Price Inelastic
Price change causes proportionately smaller change in quantity demanded. -1
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Price Skimming
Charging a very high initial price for the product.
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Pricing Strategies
range of ways in which a business might decide on the price of its product/service.
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Primary Research
Collecting new data directly from original sources. E.g. questionnaires and in- depth interviews.
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Problem Child
Small share of fast growing market. Need to be promoted or adapted to fit customer requirements more closely.
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Process Innovation
Using new technology to improve production methods, so that costs are reduced. Change is often invisible to consumers, but it may result in price cuts.
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Product Branding
Single product is recognised by that name. E.g. Jacuzzi
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Product Differentiation
When each business creates a distinctive product. This could be with unique features. Reduces PED.
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Product Innovation
New technologies make it possible to create new products or to improve quality of existing ones.
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Product Life Cycle
Shows different stages that a product passes through. Development, Introduction, Growth, Maturity, Decline.
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Product Orientation
Business will focus its efforts upon creating the product rather than responding to market needs. Make the product first then sell it. E.g. iPhone.
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Product Portfolio
Range of products that a business produces.
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Profit Maximisation
Making as much money as possible.
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Profit Satisficing
Making enough profit to continue in business. They may not be interested in taking on the additional risk and effort involved in maximising profits.
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Promotion
Inform customers and potential customers about the product or service.
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Psychological Pricing
Used to make the price seem more attractive than it really is. E.g. £9.99
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Qualitative Research
Customers' genuine opinions. Aims to understand customer behaviour.
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Quantitative Research
Analysis of numerical data.
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Redundancy
When the worker's skills are no longer of use to the business.
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Risk
Situations where the outcomes are known and can be quantified.
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Secondary Research
Gathering data from existing online and paper-based sources. E.g. government statistics.
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Social Trends
Way society as a whole behaves.
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Sole Trader
Self-employed and runs his/her own business. Unlimited Liability.
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Span of Control
Number of people directly answerable to each person in the chain of command.
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Star
Product with significant market share in a fast growing market.
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Supply
Amount of a good or service that producers are willing to provide at a given cost.
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Taylor Scientific Management
Close supervision and bonuses rewarded to more productive employees.
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Trade-Off
Occurs when two things cannot both be fully achieved.
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Uncertainty
Where events are unpredictable. Caused by factors outside the control of the business.
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Unique Selling Point
Distinctive feature that no competing product can match precisely.
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Unit Income Elasticity
Same proportional change in quantity demanded and income. x =1
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Unit Price Elasticity
Price change causes same change in quantity demanded. -1
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Viral Marketing
Strategy that encourages individuals to pass on a marketing message to someone else. Youtube has been very useful for this.
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Other cards in this set

Card 2

Front

Top-down decisions without consultation. Delegation is rare.

Back

Autocratic

Card 3

Front

If the sample includes disproportionate number of people from a particular market segment.

Back

Preview of the back of card 3

Card 4

Front

Analyses company's products in terms of market share and growth potential.

Back

Preview of the back of card 4

Card 5

Front

Creating a positive and recognisable image of the product or service.

Back

Preview of the back of card 5
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