Business Theme 1

Niche market

A smaller part of a larger market in which customers have more specific needs and wants

Mass Market

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

Marketing

A management process involved in identifying and satisfying consumer requirements profitably

Market research

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

Primary research

gathering of new information for the business's specific purpose

Secondary research

the collection of data which already exists

Market orientation

Business responds to customer needs and wants, therefore they design products accordingly

Product orientation

Business develops a product based on what it is good at doing

Market segmentation

Market that can be divided up into different sections

Geographical segmentation

Different customer groups are likely to have different needs depending on where they live

Demographic segmentation

Divide markets accordingly to age, gender, income, social class and religion of the population

Psychographic segmentation

customers attitudes and lifestyles

Behavioural segmentation

how consumers relate to a product e.g. bulk buying, regular purchases

Market mapping

Analyses market conditions to identify the position of one product or brand relative to others in the market in terms of given criteria

Competitive advantage

Set of unique features of a company and its products that are perceived to be superior over another

demand

the quantity of a good or service a customer is willing or able to buy at a given price in a given time period

Supply

the quantity of a good or service that a producer is willing and able to make available onto the market at a given price in a given time period

Price elasticity of demand

The extent to which demand for a good or service changes due to a change in price

Income elasticity of demand

The extent to which demand for a good or service changes due to a change in the consumers income levels

Product design

The generation and development of ideas through a process that leads to new products or services

Promotion

An attempt to obtain and retain customers by drawing their attention to a product or firm

Above-the-line promotion

placing adverts using the media

Below-the-line promotion

Any promotion that doesn't involve using the media

Manufacturer brands

Brands created by the producer of the good or service

Own label brands

Products which are manufactured for wholesalers or retailers by other businesses

Generic branding

Products that only contain the name of the actual product category

Viral marketing

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

Emotional branding

The practise of using the emotions of a consumer to build a brand

Cost-plus pricing

adding a percentage mark up to the cost of producing

price skimming

setting a high price initially than lowering it later

penetration pricing

setting a low price when launching a new product to get established within a market

Predatory pricing

setting a low price forcing rivals out of business

competitive pricing

pricing strategies based on the pricing charged by rivals

psychological pricing

setting the price slightly below a rounded figure e.g. £2.99

distribution

the delivery of goods from the producer to the consumer

product portfolio

the collection of products the firm is currently marketing

marketing strategy

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

Flexible workforce

workforce that can respond in quantity and type to changes in market demand

multi-skilling

the process of enhancing the skill of employees

outsourcing

getting other people or businesses to carry out tasks originally done by employees

collective bargaining

a method determining conditions of work through negotiations between employers and employees representatives

individual approach

terms of employment and disagreements are settled through negotiations between the employer and the employee

induction training

training given to new employees when they first start their job

chain of command

the way authority and power is organised within a firm

span of control

number of people a person is directly responsible for

Heirarchy

The order of responsibility in an organisation from lowest to highest

centralisation

A type of business organisation where the major decisions are made at the centre of the firm and are passed down the chain of command

decentralisation

a type of business where decision-making is pushed down the chain of command away from the centre

autocratic leadership

managers makes all the decisions without consultation

paternalistic leadership

leader makes all the decisions but takes into account employee welfare

Democratic leadership

managers allow others to participate in decision-making

laissez-faire

employees are encouraged to make their own decisions, within limits

entrepreneurs

individuals who set up and run a business and take on the associated risks

Intrapreneurs

employees who use entrepreneurial skills, that find a develop initiatives that will have financial benefits for the employer

Sole trader

a firm which has a single owner

partnership

a business owned usually by 2-20 people

PLC

a company owned by shareholders where the shares can be openly traded on the stock market

franchise

a business model in which one business allows another to trade under its name

Limited Liability

legal status meaning the firm owner is liable for the money for the money invested into the business

Unlimited liability

legal status meaning the owner of the firm is personally liable to all the businesses debts

social enterprise

a business that trades with the objective of improving human or environmental well-being

deed of partnership

a binding legal document which states the formal rights of partners

opportunity cost

the benefit lost of missing out on the next best alternative

trade off

where a decision maker faces a compromise between two different alternatives

corporate influences

short term decision-making that may not fit into the long term strategy

Market size

The total value or volume of demand in a specific market over a specific period of time.

market share

a company's product sales as a percentage of total sales for that industry

innovation

(n.) something new, a change; the act of introducing a new method, idea, device, etc.

risk

The chance of loss from an event that cannot be entirely controlled

uncertainty

extent to which managers can understand or predict which environmental changes and trends will affect their businesses

sample size

The number of people used in market research. Generally, the larger the better.

Bias

prejudice in favor of or against one thing, person, or group compared with another, usually in a way considered to be unfair.

Adding value

selling a product for more than it cost to produce it

Demographics

the characteristics of a population with respect to age, race, and gender.

Seasonality

A repeated pattern of spikes or drops in a time series associated with certain times of the year.

Indirect tax

a tax levied on goods or services rather than on people

direct tax

a tax an individual pays directly to the government e.g. income tax

subsidy

A government payment that supports a business or market

Ethics

A system of moral principles e.g. sourcing sustainably

Product Life Cycle

The stages through which goods and services move from the time they are introduced on the market until they are taken off the market.

Soft HR

employees are viewed as a valuable asset

Hard HR

employees are treated as any other resource

dismissal

being dismissed or sacked from a job due to incompetence or breach of discipline

redundancy

When a job no longer exists perhaps through reduced demand

recruitment

actively looking for qualified people to fill a job

training

educating employees in how to better do their current jobs better

On the job training

Learning in the workplace

Off-the-job training

Training that takes place away from the work area.

tall structure

• Many layers of hierarchy

• Narrow span of control

• Long chain of command

flat structure

have a wide span of control and fewer levels in the hierarchy

matrix structure

An organizational structure that simultaneously groups people and resources by function and by product.

Motivation

the reason or reasons one has for acting or behaving in a particular way.

Taylor

Believes employees are motivated by money.

Mayo

Believes employees are motivated by social interactions

Maslow's Hierarchy of Needs

physiological, safety, social, esteem, self-actualization

Herzberg

A theorist who looked at the factors that affect people's motivation to work. Motivators and hygiene factors

Piecerate

The rate paid for each piece

commission

An amount paid to an employee based on a percentage of the employee's sales