ALL THEME 1 ALEVEL BUSINESS DEFINITIONS

Brand

A symbol, logo or design that is recognisable and differentiates a product from competitors

competition

the rivalry among sellers trying to achieve goals such as increasing profits, market share and sales volume

dynamic market

a market that is subject to rapid/continuous change

Market

where buyers and sellers interact

Market share

The % of the total market a business has in terms of volume or value

niche market

a smaller segment of the market where consumers have specific needs and wants

mass market

a large unsegmented market where mass appeal products are sold

mass marketing

selling a large number of the same products to a larger segment of the market

niche marketing

selling specific goods to a smaller segment of a market

Sales volume

the quantity of goods and services sold within a period of time

uncertainty

the inability to predict or lack of knowledge about future events and outcomes

data bases

an organised collection of data stored electronically with instant access, searching and storing facilities

Focus group

a group of people who participate in a discussion as part of market research to give feedback about a product or service

Market orientation

when a business focuses their products around the needs and wants of consumers

Market research

gathering, presenting and analysing information about products or customers

market segmentation

dividing a whole market into particular customer groups that have similar characteristics

market segments

an identifiable part of the market where consumers share one or more characteristic or need

Primary market research

the business obtains the data themselves to suit the specific needs of the business

Product orientation

When a business focuses on the products design quality or performance rather than meeting customer needs and wants

qualitative data

data about attitudes, opinions and beliefs of consumers

quantitative data

numerical data that can be measured

sample

a small group of people who must represent a proportion of a total market when carrying out market research

secondary market research

data that already exists

segmentation

dividing the market into groups of people with similar attributes or common characteristics

test marketing

Trialling the product in a small area or to a limited number of users to assess the suitability of a product

Added value

the increase in value that a business creates when producing a product or service - the difference between selling price and cost of inputs

Market mapping

using a 2d diagram to plot products or services using two key variables. used to spot a gap in the market

market positioning

an effort to influence consumer perception of a brand or product, relative to the perception of competing brands and services

complementary goods

products that are used together so are purchased together

demand

the quantity of goods or services that a consumer is willing to buy at a given price at a given time

substitutes

goods that can be bought as an alternative to others but perform the same function

indirect taxes

taxes imposed by the government on spending e.g. VAT

supply

the amount that producers are willing and able to produce at a given price

equilibrium price

the price where supply and demand are equal

shortage in markets

where demand exceeds supply

surplus in markets

where supply exceeds demand

price elastic

quantity demanded is responsive to a change in price

price elasticity of demand

measures the responsiveness of quantity demanded to a change in price

price inelastic

quantity demanded for the product is less responsive proportionately to a change in price

Income elasticity of demand

measures the responsiveness of quantity demanded to changes in consumer income

Marketing Mix

a plan for using the right blend of the 4Ps in order to maximise sales

Design mix

the combination of factors needed in designing a product including aesthetics, function and cost

advertising

a paid form of communication, used by a business to raise customer awareness

direct marketing

when a business mails out leaflets or letters to households

emotional branding

the practice of building brands that appeal directly to a consumers emotional state, needs and aspirations

manufacture or corporate branding

brands created by the producers of goods and services

own brand

products that are manufactured for wholesalers or retailers by other businesses

personal selling

when there is direct communication between a salesperson and the customer

product or generic branding

products that only contain the name of the product category rather than the company or product name e.g. carrots

Promotion

the way a business creates demand or awareness for its product or service

Public relations

an organisation’s attempt to communicate with interested parties, usually through unpaid media such as press conferences

sales promotions

methods of promoting products in the short term to boost sales, including BOGOF, discounts, loyalty cards and free samples

USP

a feature that differentiates a product from its competitors

viral marketing

encouraging customers to share information or adverts through existing social media platforms

competitive pricing

when a business sets a price similar to competitors selling similar products

cost plus pricing

a pricing method calculated by adding a mark up percentage to the cost of the product

penetration pricing

setting a low price initially and accepting limited short term profits or losses in order to build a market share before switching to a higher price

predatory pricing

setting a low price that forces rivals out of the market

price skimming

Setting a high price at the launch of a product, to gain the money back from R&D and to take advantage of those wanting to be the first people to purchase

Pricing strategy

A method used by a business when deciding the price at which a product is sold for

psychological pricing

pricing strategies that are designed to appeal to a customers emotional response

channels of distribution

methods used by businesses to get their product from manufacturer to consumer. they can include intermediaries such as wholesalers and retailers

Distribution

getting products to the right place for customers and at the right time

Boston Matrix

A method used to analyse the product portfolio of a business that contains stars, cash cows, question marks and dogs

Star in the boston matrix

high market share in a high growth market

cash cow in the boston matrix

high market share in a low growth market

question mark in the Boston Matrix

low market share in a high growth market

dog in the boston matrix

low market share in a low growth market

Extension strategy

a method used to lengthen the life/sales of a product

marketing objective

a goal the business aims to achieve through its marketing activities

marketing strategy

the methods used to achieve marketing objectives

portfolio analysis

When business considers each of its products in the context of its market position

Product life cycle

The stages that a product goes through from introduction to decline

Product portfolio

the collection of products produced by a business

Collective Bargaining

negotiation of wages or conditions of employment between employee representatives or trade unions and the employer

Dismissal

the termination of employment by an employer against the will of the employee

Employer/employee relations

The way in which a company’s management and its employees behave towards each other

Individual approach (employer/ee relations)

When employers develop relationships with employees at an individual level

Multiskilling

The process of increasing the skills of employees

Part-time employees

Workers that generally work a few hours or a few days a week. Fewer hours than a full-time employee

Redundancy

When a business needs to reduce the size of its workforce or even close

Staff as a cost

A cost to businesses in terms of recruitment, training, remuneration, welfare and even severance

Staff as an asset

Employers recognise the input of employees as an important business resource

Trade unions

A workforce representative that act to protect and improve the economic and working conditions for their members

External recruitment

When the business looks to fill the vacancy from outside of the business

Induction training

Introductory training given to employees covering its background, policies, health and safety procedures

Internal recruitment

selecting employees who already work within the business to fill vacancies

Off the job training

When employees are given training away from their normal job environment

On-the-job training

Learning skills whilst at work doing the job

Recruitment

The process of finding and selecting workers

Training

The developing of a person to enhance skills and knowledge

Centralised structure

An organisational structure where business decisions are made at the top of the hierarchy by senior management/or at the headquarters of a business

Chain of command

The way authority and power is organised in an organisation

Decentralised structure

When a business allows branches to take more control/make their own decisions

Flat organisational structure

A structure with few layers and a wider span of control for each manager

Hierarchy

The order or levels of responsibility in an organisation, from the lowest to the highest

Matrix organisational structure

Organises employees from different disciplines or divisions into projects/teams

Organisation structure

A diagram that shows who is answerable to whom in an organisation. It can also show vertical and horizontal communication links

Span of control

The number of employees/subordinates that a manager is responsible for

Tall organisational structure

One with many layers and a narrow span of control for each manager