business theme 1 content

Mass Market vs. Niche Market

Mass: Large market targeting a wide range of customers with generic products. Niche: Small, specialized segment of a larger market with distinct customer needs.

Market Size vs. Market Share

Size: Total value or volume of sales in a whole market. Share: The proportion of total market sales achieved by one single business.

Dynamic Market

A market subject to rapid and continuous change (e.g., due to evolving technology, taste, or new competitors).

Risk vs. Uncertainty

Risk: Measurable and predictable downsides where probabilities can be calculated. Uncertainty: Unpredictable, external factors completely outside a business's control.

Product Orientation vs. Market Orientation

Product: Focuses on the internal efficiencies and quality of the product first. Market: Puts consumer needs at the center of decision-making via market research.

Primary vs. Secondary Market Research

Primary: First-hand data collected specifically for the business's current needs. Secondary: Existing data gathered previously by someone else for a different purpose.

Qualitative vs. Quantitative Data

Qualitative: Non-numerical data tracking attitudes, beliefs, and opinions. Quantitative: Numerical data that can be measured, graphed, and statistically analyzed.

Market Segmentation

Dividing a whole market into distinct groups of buyers with similar characteristics or needs (e.g., demographic, geographic, psychographic).

Market Mapping

A visual grid illustrating competitor brands against two key variables (e.g., price vs. quality) to identify gaps in the market.

Product Differentiation

Making a product distinctive from its competitors in the eyes of consumers (via branding, design, or unique features).

Adding Value

Increasing the difference between the cost of bought-in materials and the final selling price of the product (e.g., through convenience, quality, or branding).

12. : Price Elasticity of Demand (PED)

Measures the responsiveness of demand following a change in price.

Price Elastic Income (Elastic vs. Inelastic)

Elastic (PED greater than 1): Demand changes significantly if price moves. Inelastic (PED less than 1): Demand changes very little when price moves.

Income Elasticity of Demand (YED)

Measures the responsiveness of demand following a change in consumer income.

Normal Goods vs. Inferior Goods

Normal: Positive YED; demand increases as consumer income rises. Inferior: Negative YED; demand drops as consumer income rises.

Cost-Plus Pricing

Adding a fixed percentage markup for profit on top of the average unit cost of producing a product

Price Skimming vs. Penetration Pricing

Skimming: Setting a high initial price to target innovators and maximize short-run profit. Penetration: Setting a low initial price to capture market share quickly

Predatory vs. Competitive Pricing

Predatory: Setting prices below cost to intentionally force competitors out of business. Competitive: Setting prices in line with or just below market rivals.

Corporate Branding

Building a recognizable identity and reputation for a whole company, rather than just individual products.

Distribution Channel

The route or chain of intermediaries a product travels through from the manufacturer to the final consumer.

Product Life Cycle Stages

Introduction ➡ Growth ➡ Maturity ➡ Decline.

Extension Strategies

Marketing techniques used to prolong the maturity stage of a product and delay its decline (e.g., changing packaging, finding new target markets).

Boston Matrix Quardants

 

o    Stars: High share, high growth.

o    Cash Cows: High share, low growth.

o    Question Marks: Low share, high growth.

o    Dogs: Low share, low growth.

Flexible Workforce

A workforce that can quickly adapt to changing demand levels (e.g., using part-time staff, zero-hour contracts, or multi-skilled workers).

Dismissal vs. Redundancy

Dismissal: Firing a worker due to incompetence or a breach of discipline. Redundancy: Ending employment because the job role itself is no longer needed

Collective Bargaining

Workforce pay and conditions negotiated as a whole group via trade union representatives, rather than individually.

Centralized vs. Decentralized Structure

Centralized: Decision-making power remains strictly at the top layer of management. Decentralized: Power is delegated down to local or lower-level managers.

Span of Control vs. Chain of Command

Span: The number of subordinates directly accountable to a single manager. Chain: The route through which corporate orders are passed down the hierarchy.

Tall vs. Flat Organizational Structures

Tall: Many layers of management, narrow spans of control. Flat: Very few management layers, wide spans of control

Matrix Structure

Organizing staff by both their functional department (e.g., marketing) and by specific project teams simultaneously

Frederick Taylor (Motivation Theory)

Scientific Management: Workers are motivated purely by money. Focuses on broken-down, standardized tasks and piece-rate pay.

Elton Mayo (Motivation Theory)

Human Relations School: Workers are motivated by social factors, communication, recognition, and team working (Hawthorne Effect).

Abraham Maslow (Motivation Theory)

Hierarchy of Needs: Five-tier structure. Lower needs must be met before moving up. (Physiological ➡ Safety ➡ Social ➡ Esteem ➡ Self-Actualization).

Frederick Herzberg (Motivation Theory)

Two-Factor Theory:

• Hygiene factors: Must be met to prevent dissatisfaction (e.g., basic pay, safe conditions).

• Motivators: Truly drive hard work (e.g., achievement, recognition).

Autocratic vs. Paternalistic Leadership

Autocratic: One-way communication; leader makes all choices without consultation. Paternalistic: Leader guides decisions like a parent, acting in what they believe is the workers' best interest

Democratic vs. Laissez-Faire Leadership

Democratic: Two-way communication; encourages employee participation in choices. Laissez-Faire: Total freedom; staff set their own targets and manage their own days.