CCEA AS 2

Market Share

This represents the percentage of an industry's total sales that a particular company has earned over a period of time.

Market Growth

This represents an increase in demand for the industry's product/service over a period of time.

Market Size

This refers to the volume/value of sales generated by individual firms who make up the industry as a whole.

Monopoly

A market structure in which only one firm supplies the entire output, there is no competition and there are barriers to entry.

Oligopoly

A market structure that has a small number of firms who dominate the market by producing heavily branded products. There are some barriers to entry.

Perfect Competition

A market structure where there is perfect knowledge, many buyers and sellers, freedom of entry and exit and a homogeneous product.

Office of Fair Trading

A Government body that has responsibility for overseeing all policy relating to competition and consumer protection. It can refer specific cases to the Competition Commission for investigation.

Competition Commission

It will investigate and report on any monopoly, proposed merger or anti-competitive practices that are referred to it by the Office of Fair Trading or Regulators of privatised industries that are deemed not to be in consumer's interests.

Regulators of Private Utilities

Agencies set up to regulate prices in the provision of water, gas, electricity etc. to the general public.

Marketing Research

The collection, collation and analysis of data relating to the marketing and consumption of goods and services.

Primary Research

Information collected by a business through field research e.g. survey. It involves the collection of data that does not already exist.

Secondary Research

Using existing sources of information to research the market e.g. past sales data.

Focus Groups

A range of individuals who are deemed to be representative of the customers in a particular segment who are brought together to answer and discuss questions prepared by market researchers.

Consumer Panels

A group of consumers who are consulted about their views on a particular product over a period of time.

Test Marketing

Selling a product in a restricted section of the market in order to assess consumer's reaction to it.

Surveys

These are used to obtain views about a firm's product/service from existing or potential customers. The data can be collected via telephone, online and postal questionnaires.

Observation

Watching and recording how people react to the firm's product/service displays and interact with staff without their knowledge.

Questionnaire

A range of questions designed by the business to collect both quantitative and qualitative from consumers about their products/services.

Store Loyalty Cards

Given to customers as a reward for shopping in a particular store. The data collected provides the business with an opportunity to identify the spending patterns of consumers leading to targeted promotions that will increase sales.

Sample

A group of consumers selected from the population.

Random sample

Everyone is given an equal chance of being chosen.

Cluster sample

The population is divided into 'clusters' usually geographic areas and then a random sample is chosen.

Quota sample

The population is segmented into a number of groups who share specific characteristics e.g. age, gender. Interviewers are given targets for the number out of each segment.

Stratified sample

The population is divided into mutually exclusively strata or layers with random sampling taking place within each stratum.

Quantitative research data

Data collected by the organisation which can be analysed and easily presented in tables and charts. This data can provide answers to questions such as 'how many', 'who' and 'how often'.

Qualitative research data

Data collected by an organisation which helps them choose a particular strategy. This data provides answers to questions such as 'why' or 'how' potential consumers react to specific goods/services.

Marketing Mix

The elements of an organisation's marketing plan that are designed to meet the needs of its customer

Price

The amount charged by the business for providing a product to the consumer.

Product

This represents the nature of the item provided by the business to the consumer.

Promotion

The efforts made by the business to retain and attract consumers by drawing attention to its product.

Place

The means by which the product will be distributed at a time and location convenient to the consumer.

People

The behaviour and attitude of staff who determine the level of customer satisfaction in business transactions.

Processes

The systems employed by the firm to ensure their services are successfully delivered to customers.

Physical Environment

This applies to the store, office and company website where business transactions occur.

E-Commerce

The selling, marketing and servicing of products or services over electronic systems such as the internet.

Price Elasticity of Demand

A measure used to show the responsiveness, or elasticity, of the quantity demanded of a product/service to a change in its price.

Income Elasticity of demand

A measure used to show the responsiveness, or elasticity, of the quantity demanded of a product/service to a change in consumer income.

Product Life Cycle

This shows the different stages in the life of a product and the sales that can be expected at each stage.

Extension Strategies

The methods used by a business to extend the life of a product.

Product Portfolio

The particular mix of products which a firm is marketing.

Marketing Positioning

The perception that consumers have of the quality, value for money and image of the product relative to those of competitors.

Market Segmentation

Breaking down a market into sub-groups which share similar characteristics e.g. age, gender, income.

SWOT

Assessment of the internal strengths and weaknesses of a business and the external opportunities and threats that the business needs to consider.

E-Business

This refers to business activity conducted using online information systems and applications.

Digital Marketing

This is an umbrella term used to describe the marketing of products/services via mobile technology and the internet.

Social Media

This refers to a range of online communication channels that provides opportunities for individual and community interaction, collaboration and sharing of information.

Mobile Technology

This technology is portable and used by businesses to promote products/services via electronic channels.

Mobile Ticketing

A process that allows customers to order, pay for or validate tickets by using their mobile phones or other mobile handsets.

Mobile Marketing

This is a form of advertising/promotion delivered to consumers via mobile/smart phones and other handheld devices. It can be in the form of text, images and voice messages.

Internal Source of Finance

These are funds available from within the business e.g. retained profit and money gained from selling assets no longer used in the firm.

External Source of Finance

These are funds available from outside the business e.g. loan, overdraft, hire purchase, leasing, trade credit, mortgage.

Break-Even Point

This is the level of output where total revenue is equal to total cost. It can be calculated by dividing the organisations' fixed costs by contribution (Selling price per unit less variable costs per unit).

Margin of Safety

The range of output between break even output and the current level of output, over which a profit is made.

Variable Costs

Costs that change directly as output levels change.

Semi-variable Costs

A cost that has an element of both fixed and variable charges e.g. a telephone bill has a fixed line rental but the charges for calls are variable depending on the number made.

Total Costs

Fixed and variable costs added together.

Total Revenue

The number of units sold by the business multiplied by the selling price per unit.

Contribution

The amount of money left over after a sale when all variable costs have been covered i.e. selling price - variable costs. This amount will contribute towards paying off the fixed costs of the business.

Fixed Costs

Costs which do not change as output levels change.

Profit

This is the excess of revenue over costs within the business

Cash

This is 'ready money' used in business and includes money-in-hand, money in the bank, petty cash, cheques and marketable securities.

Cash Flow Forecast

This is an estimate of a firm's cash in-flows and outflows at various times during a specific period (usually a year).

Budgetary Control

A business system which involves making future plans, comparing the actual results with planned results and then investigating the cause of any differences.

Budget

An agreed financial plan drawn up for a specific time frame setting out proposed revenue and costs.

Fixed Budget

A budget that is not changed even when the actual activity levels differ from those set.

Flexible Budget

A budget which is changed to allow for the behaviour of variable costs at different levels of activity.

Income Statement

Summarises income/expenses and details the profit/losses made by the business in the accounting period.

Sales Revenue

Income earned in the accounting period from trading activities.

Opening Inventories

Inventories that the organisation has at the start of the trading period, carried over from the previous trading period.

Purchases

Additional inventories bought by the business for re-sale.

Closing Inventories

The amount of unsold inventories left at the end of the trading period.

Cost of Sales

Opening Inventories + Purchases - Closing Inventories.

Gross Profit

Sales Revenue - Cost of Sales.

Net Profit

Gross Profit - Expenses.

Statement of Financial Position

Details in summary format, the financial position of the business at a specific date

Assets

Items of value held by a business which are likely to generate future income.

Non-Current Assets

Assets that the business expects to retain ownership of, for a period of at least one year e.g. plant and machinery. These assets are held to help with the day to day running of the organisation. They are not usually acquired for profitable resale purposes.

Current Assets

Assets that the business expects to turn into cash within one year e.g. inventories/trade receivables/cash/bank.

Trade Receivables

Money that is owed from customers to the business arising from goods sold on credit.

Non-Current Liabilities

Debts that the business is required to meet in a future accounting period i.e. beyond one year e.g. bank loan.

Current Liabilities

Liabilities that the business expects to pay within a one-year accounting period e.g. trade payables, bank overdraft.

Trade Payables

Money that is owed from the business to a supplier who provided goods/services on credit.

ROCE - Return on capital employed

This ratio measures the profitability of the business in relation to the amount of capital invested.

Net Profit Margin

This ratio measures the net profit as a percentage of the sales revenue made by the business. It also indicates how cost efficient the business is.

Current Ratio

This measures the liquidity of the business and its ability to meet debts.

Gearing

This ratio measures the proportion of funds used within the business that is from a borrowed source.