Edexcel IAS Business Definitions

UNIT 1

Brand Name

A name, term, sign, symbol, design or any other feature that allows consumers to identify the goods and services of a business and to differentiate them from those of competitors.

Credit Crunch

A time when borrowing money becomes difficult because banks reduce the amount they lend and charge high interest rates.

E-commerce

The use of electronic systems to sell goods and services.

Liquidation

The act of closing a company by selling the things that belong to it, in order to pay its debts.

Market

A set of arrangements that allows buyers and sellers to communicate and trade in a particular range of goods and services.

Marketing

A management process involved in identifying, anticipating and satisfying consumer requirements profitably.

Market Share

The proportion of total sales in a particular market for which one or more businesses or brands are responsible.

Mass Market

A very large market in which products with mass appeal are targeted.

Niche Market

A smaller market, usually within a large market or industry.

Online Retailing or E-tailing

The retailing of goods online.

Payday Lending

An amount of money that is lent for a short period of time, usually at a high rate of interest and because someone needs money until they get paid again from their job.

Unsecured Loan

A loan where there are no assets to which the lender has a right if the borrower does not make repayments.

Consumer Panels

Groups of customers are asked for feedback about products over a period of time.

Database

An organised collection of data stored electronically with instant access, searching and sorting facilities.

Focus Groups

A number of customers are invited to attend a discussion about a product run by market researchers.

Market Research

The collection, presentation and analysis of information relating to the marketing and consumption of goods and services.

Primary Research or Field Research

The gathering of 'new' information that does not already exist.

Qualitative Research

The collection of data about attitudes, beliefs and intentions.

Quantitative Research

The collection of data that can be quantified.

Quota Sampling

Respondents are selected in a non-random manner in the same proportion as they exist in the whole population.

Random Sampling

Respondents are selected for interview at random.

Respondents

People or organisations that answer questions in a survey.

Sample

A small group of people that must represent a proportion of a total market when carrying out market research.

Secondary Research or Desk Research

The collection of data that is already in existence.

Stratified Sampling

A method of quota sampling in which respondents are chosen at random.

Target Population

The total number of consumers in a given group.

Adding Value

Offering extra features when selling a product, such as high-quality customer service, which helps to exceed customer expectations.

Competitive Advantage

An advantage that enables a business to perform better than its rivals in the market.

Market Maps or Perceptual Maps

Typically a two-dimensional diagram that shows two of the qualities or characteristics of a brand and those of rival brands in the market.

Market Orientated

An approach to business which places the needs of consumers at the centre of the decision-making process.

Market Positioning

The view consumers have about the quality, value for money and image of a product in relation to those of competitors.

Market Segments

Parts of a whole market where a particular customer group has similar characteristics.

Product Differentiation

An attempt by a business to distinguish its product from those of competitors.

Product Orientated

An approach to business which places the emphasis upon the production process and the product itself.

Reposition

Change the view consumers have about a product by altering some of its characteristics.

Socio-economic Groups

Divisions of people according to social class.

Unique Selling Point (or Proposition)

The aspect or feature of a product that clearly distinguishes it from its rivals.

Complementary Goods

Goods that are purchased together because they are consumed together

Demand

The quantity of a product bought at a given price over a given period of time

Demand Curve

A line drawn on a graph that shows how much of a product will be bought at different prices

Inferior Goods

Goods for which demand will fall if income rises or rise if income falls.

Normal Goods

Goods for which demand will rise if income rises or fall if income falls.

Substitute (Goods)

Goods that can be bought as an alternative to others, but perform the same function.

Subsidy

A grant given to producers, usually to encourage production of a certain product

Supply

The amount of a product that suppliers make available to the market at any given price in a given period of time

Supply Curve

A line drawn on a graph that shows how much of a product sellers are willing to supply at different prices.

Equilibrium: Price or Market Clearing Price

The price where supply and demand are equal

Excess Demand

The position where demand is greater than supply at a given price and there are shortages in the market

Excess Supply

The position where supply is greater than demand at a given price and there are unsold goods in the market.

Total Revenue or Total Expenditure

The amount of revenue generated from the sale of goods calculated by multiplying price by quantity in a given period of time.

Price Elastic Demand

A change in price results in a greater change in demand.

Price Elasticity of Demand

The responsiveness of demand to a change in price.

Price Inelastic Demand

A change in price results in a proportionately smaller change in demand.

Discretionary Expenditure

Non-essential spending or spending that is not automatic.

Income Elastic

The percentage change in demand for a product is proportionately greater than the percentage change in income.

Income Elasticity of Demand

Where the responsiveness of demand to a change in income.

Income Inelastic

Where the percentage change in demand is proportionately less than the percentage change in income.

Inferior Goods

Goods for which demand will fall if income rises or rise if income falls.

Normal Goods

Goods for which demand will rise if income rises or fall if income falls.

Boston Matrix

A 2x2 matrix model that analyses a product portfolio according to the growth rate of the market and the relative market share of products within the market

Extension Strategies

Methods used to prolong the life of a product.

Marketing Mix

The mix of marketing elements used by a company, which are usually known as the 4Ps: product, price, place, and promotion.

Marketing Objectives

Goals that a business attempts to achieve through its marketing activities.

Marketing Strategy

A set of plans that aim to achieve a specific marketing objective.

Product Lines

A group of products that are very similar.

Product Portfolio

The collection of products a business is currently marketing.

Unique Selling Point

The aspect or feature of the product that differentiates it from those of rivals.

Consumer Durables

Goods that can be used repeatedly over a period of time, such as cars and household appliances.

Design Mix

The range of features that are important when designing a product.

Ergonomics

The study of how people interact with their environment and the equipment they use - often in the workplace

Ethical Sourcing

Using materials, components and services from suppliers that respect the environment, treat their workforce well and generally trade with integrity.

Product Design

The process of creating a new product or service.

Recycling

Making use of materials that have been discarded as waste.

Resource Depletion

The using up of natural resources

Waste Minimisation

Reducing the quantity of resources that are discarded in the production process.

Above-the-Line Promotion

Placing adverts using the media.

Advertising

Communication between a business and its customers where images are placed in the media to encourage the purchase of products.

Below-the-Line Promotion

Any promotion that does not involve using the media.

Emotional Branding

The practice of using the emotions of a consumer to build a brand.

Generic Brands

Products that only contain the name of the product category rather than the company or product name.

Manufacturer Brands

Brands created by the producers of goods or services.

Merchandising

A promotion specifically at the point of sale of a product.

Own-Label, Distributor or Private Brands

Products that are manufactured for wholesalers or retailers by other businesses.

Point of Sale

Any point where a consumer buys a product.

Promotion

An attempt to obtain and retain customers by drawing their attention to a firm or its products.

Public Relations

An organisation's attempt to communicate with interested parties.

Sales Promotions

Methods of promoting products in the short term to boost sales.

Sponsorship

Making a financial contribution to an event in return for publicity.

Viral Marketing

Any strategy that encourages people to pass on messages to others about a product or a business electronically.

Competitive Pricing

Pricing strategies based on the prices charged by rivals.

Cost Plus Pricing

Adding a percentage (the mark-up) to the costs of producing a product to get the price.

Mark-Up

The percentage added to unit cost that makes a profit for a business when setting the price.

Penetration Pricing

Setting a low price when launching a new product in order to get established in the market.

Predatory or Destroyer Pricing

Setting a low price forcing rivals out of business.

Pricing Strategy

The pricing policies or methods used by a business when deciding what to charge for its products.

Psychological Pricing

Setting the price slightly below a round figure.

Skimming or Creaming

Setting a high price initially and then lowering it later.

Unit Costs

The same as average cost (total cost divided by output).

Agent or Broker

An intermediary that brings together buyers and sellers.

Breaking-Bulk

Dividing a large quantity of goods received from a supplier before selling them on in smaller quantities to customers