business studies chap 1 - 14

marketing strategy

a plan to combine the right combination of the four elements of the marketing mix for a product or service to achieve a particular marketing objective

weights and measures

retailers commit an offense if they sell underweight goods

trade descriptions

it is illegal to give the consumer a deliberately misleading impression about a product

sales of goods

it is illegal to sell products which have flaws or problems

supply of goods and services act

a service has to be provided with reasonable skills and care

the distance selling regulation

allow customers a cooling off period of seven working days, this means they can change their mind about purchasing goods or services

import quotas

a physical limit on the quantity of a good that can be imported into a country in a given time period

import duties

taxes charged by customs on the importation of goods into the country

opportunities of entering new foreign markets

1. potential growth of new markets in other countries to gain higher income

2. home markets might be saturated

3. businesses can sell and produce in other countries

4. trade barriers have been lower

threats of entering new foreign markets

1. lack of knowledge in new foreign markets

2. some products will not sell in another market

3. exchange rate changes can cause an uncertainty in purchase

4. increasing transport costs

joint venture in a foreign market

this helps business to gain local knowledge so culture and customs can be adapted to enable a more successful entry into new markets

licensing

the business gives permission for another firm in the new market being entered to produce the branded products

international franchising

foreigner franchises are used to operate a business’s franchise abroad

localising existing brands

there is still a common brand image for the business but it has adapted to local tastes and culture therefore increased in sales revenue

division of labour

production is divided into separate tasks and each employee does just one of those tasks

de-industrialisation

decline in the importance of secondary, manufacturing industry

horizontal integration

the business integrates with another in the same industry and same stage of production

vertical integration

the business integrates with another in the same industry but different stage of production

conglomerate integration

the business integrates with another in a different industry and different stage of production

business plan

a document containing the business objectives and important details about the operations, finance and owners

hierarchy

refers to the management levels within an organisation

delegation

giving subordinates the authority to perform particular tasks

span of control

measures the number of subordinates reporting directly to a manager

autocratic

manager has total control and there is no delegation. communication is one way. this style is used when employees are unskilled or not trusted

democratic

manager is good at communicating and willing to delegate. employees are skilled and experienced. final decision made by manager after discussion

laissez-faire

managers have little influence in the actions of employees and only involved to resolve disagreements. good for small, highly motivated teams

motivation

the factor that makes people want to do something for job satisfaction

salary

employees are paid a fixed amount per year, which is usually paid monthly

time rate

employees are paid a set amount for each hour worked

piece rate

employees are paid by the amount of output they produce

fringe benefits

non-financial rewards/incentives given in addition to wages

bonus

employees receive extra money above basic pay if they reach certain performance targets

commission

salesperson are given an incentive to sell more as they receive a percentage of any sales made

profit sharing

additional payments are given based on the level of business profits

share ownership

in limited companies, employees have a chance to buy shares to become part owners in the business, they receive dividends

job enrichment

the employees are given more responsibility or more difficult tasks to do

job satisfaction

enjoyment employees can derive from work if they feel that they have done a good job

job enlargement

tasks of a similar level of difficulty/responsibility are added to a workers job description

dividends

payments made to shareholders from the profits of a company

franchise

a business that uses, under licence, the brand name, logo and trading methods of an existing business. the franchisor sells the licence; the franchisee buys the licence

joint venture

two or more businesses start a new project together sharing capital, risks and profits

business objectives

the aims or targets that a business works towards

profit

total income of a business minus total costs

market share

the proportion of total market sales held by one brand or business

market share formula

sales of business/total market sales × 100

social enterprise

an organisation with profit, environmental and social objectives

stakeholders

any person or group with a direct interest in the performance and activities of business

organisational structure

the levels of management and divisions of responsibility in an organisation

chain of command

the route taken by instructions passed down from senior management

level of hierarchy

a level of management where people have the same level of responsibility

line managers

have direct responsibility over people below them in the hierarchy of an organisation

trade union

a group of workers who join together to protect their interests

recruitment

identifying need for new employees and encouraging people to apply for a vacancy

job description

responsibilities and duties to be carried out by job holder

on the job training

training at the place of work, watching and being instructed by experienced workers

off the job training

training away from the place of work. e.g at college, being instructed by specialists or trainers

induction training

training for new employees explaining the business structure, activities and procedures

redundancy

employees are no longer required

dismissal

an employee’s employment contract is terminated and they must leave the business

formal communication

messages sent through established channels

marketing

anticipating the needs and wants of targeted customers and managing the process through which these needs and wants are satisfied

role of marketing

• identifying and satisfying customer needs

• maintaining customer loyalty

• building customer relationships

• gain information on customers

• anticipate changes in customer needs

market

a place where buyers and sellers come together to buy and sell goods and services

niche market

a small and specific part of a larger market

mass market

a market for products that are often standardised and sold in large quantities

geographic segmentation

segmentation based on countries, states, regions, cities or areas to understand cultural differences

demographic segmentation

segmentation based on age, gender or income

psychographic segmentation

segmentation based on psychological characteristics like personality, lifestyle and social status

distribution channels

the means by which a product is passed from the place of production to the customer or retailer

agent

an independent person or business that is appointed to deal with the sales and distribution of a product

e-commerce

the buying and selling of goods and services using computer systems linked to the internet

informative advertising

where the emphasis of advertising is to give full information about the product

persuasive advertising

advertising or promotion which is trying to persuade the consumer that they really need the product and should buy it

target audience

people who are potential buyers of a product or service

sales promotion

incentives such as special offers or special deals aimed at consumers to achieve short-term increases in sales

personal selling

sales staff communicate directly with consumer to achieve a sale

direct mail

involves posting leaflets or printed materials directly to the business or homes of potential customers

sponsorship

is where a business will pay to have its name linked to an event

market research

the process of gathering, analysing and interpreting information about a market

product-oriented business

a business whose main focus of activity is on the product itself

market-oriented business

a business which carries out market research to find out customer wants before a product is developed and produced

marketing budget

a financial plan for the marketing of a product or product range for some specified period of time. it specifies how much money is available to market the product or range, so that the marketing department knows how much it may spend

primary research

the collection and collation of original data via direct contact with potential and existing customers

secondary research

the use of information that has already been collected and is available for use by others

questionnaire

a set of questions to be answered as a means of collecting data for market research

online survey

it requires the target sample to answer a series of questions over the internet

interviews

it involves asking individuals a series of questions, often face to face or over the phone

focus group

a group of people who are representative of the target market

sample

the group of people who are selected to respond to a market research exercise, such as a questionnaire

random sample

when people are selected at random as a source of information for market research

quota sample

when people are selected on the basis of certain characteristics as a source of information for market research

uses of market research information

identify consumer needs / discover current and future market / decide on how to price the market

quantitative information

answers the questions about the quantity of something

qualitative information

answers questions where an opinion or judgement is necessary

methods of secondary research

government statistics

newspaper

market research agencies

online sources

marketing mix

a term that describes all the activities which go into marketing a product or service

revenue

the amount earned by the business from the sale of its products

brand loyalty

when consumers keep buying the same brand again and again instead of choosing a competitors brand

brand image

an image or identity given to a product which gives it a personality of its own and distinguishes it from its competitors brands

packaging

the physical container or wrapping for a product