Business Studies Lecture: Marketing & Management Essentials

Vocabulary flashcards covering key marketing, management, and economics concepts from the lecture notes.

Marketing Mix (4Ps)

The combination of Product, Price, Promotion, and Place used to satisfy customer needs and achieve business goals.

Product (in the 4Ps)

Goods or services offered to customers; decisions include quality, design, branding, packaging, and life-cycle stage.

Price (in the 4Ps)

The amount customers pay; set through strategies such as cost-plus, penetration, skimming, and competitive pricing.

Promotion (in the 4Ps)

Communication activities—advertising, sales promotions, personal selling, public relations—used to persuade customers.

Place (in the 4Ps)

Distribution channels and logistics that ensure products reach customers at the right time and location.

Above-the-Line (ATL) Promotion

Mass-media marketing methods (e.g., TV, radio, billboards, online display ads) aimed at large, broad audiences.

Below-the-Line (BTL) Promotion

Targeted, direct marketing methods (e.g., email, coupons, loyalty programs) focused on specific customer segments.

Financial Motivators

Monetary rewards—such as wages, bonuses, and profit sharing—used to encourage employee performance.

Wages / Salaries

Regular hourly or monthly payments providing predictable income but not always linked to performance.

Bonus

Extra payment awarded for meeting or exceeding specific targets, designed to spur high performance.

Commission

Earnings calculated as a percentage of sales volume, directly tying employee reward to sales results.

Profit Sharing

System where employees receive a portion of company profits, aligning worker and business interests.

Performance-Related Pay (PRP)

Pay increases or incentives linked to individual or team performance metrics.

Fringe Benefits

Non-wage perks (e.g., company car, health insurance) that enhance total compensation and job satisfaction.

Organisation (Structure)

The arrangement of roles, responsibilities, and authority within a business.

Management

Process of planning, organizing, leading, and controlling resources to achieve objectives.

Hierarchical (Tall) Structure

Organisation with many management levels and a narrow span of control, offering clear authority lines but slower decisions.

Flat Structure

Organisation with few levels and a wide span of control, enabling faster decisions but less supervision.

Matrix Structure

Project-based setup where employees report to multiple managers, promoting flexibility but adding complexity.

Span of Control

The number of subordinates directly supervised by a manager.

Chain of Command

The formal line of authority that moves from top management down to employees.

Delegation

Assigning tasks and authority to subordinates to empower staff and free managers for higher-level work.

Planning (Management Function)

Setting objectives and outlining strategies to achieve them.

Organizing (Management Function)

Allocating resources and tasks to implement plans.

Leading (Management Function)

Motivating and directing employees toward organizational goals.

Controlling (Management Function)

Monitoring performance and making adjustments to meet objectives.

Autocratic Leadership

Style where the manager makes decisions alone; fast but can demotivate staff.

Democratic Leadership

Style involving employees in decision-making; motivating but slower.

Laissez-Faire Leadership

Style granting employees high autonomy; fosters creativity but risks poor control.

Line Management

Managers with direct authority over employees and operations within a department.

Channel Distribution

The path a product travels from producer to consumer, possibly involving intermediaries.

Direct Channel

Producer sells straight to the consumer (e.g., online brand store), gaining higher margins and feedback control.

Indirect Channel

Producer uses intermediaries; can be one-level (retailer) or two-level (wholesaler → retailer).

E-commerce Channel

Online platforms (own website, Amazon) enabling digital product distribution.

Marketing Budget

Financial plan allocating resources (advertising, promotions, research) for marketing over a period.

Percentage-of-Sales Method

Budgeting approach that assigns marketing spend as a fixed percentage of revenue.

Objective-and-Task Method

Budget set by defining campaign goals and estimating the cost of required activities.

Competitive Parity Method

Budgeting by matching or tracking competitors’ marketing spend levels.

Affordable Method (Budgeting)

Spending what the company believes it can afford after other costs.

Levels of Product (Kotler)

Five value layers: core benefit, generic product, expected product, augmented product, potential product.

Core Benefit

Fundamental need or value the customer seeks (e.g., transportation from a car).

Generic Product

Basic, no-frills version containing only essential features.

Expected Product

Set of attributes and conditions buyers normally anticipate (e.g., safety features).

Augmented Product

Additional services or features that differentiate the offering (e.g., free warranty).

Potential Product

All possible future augmentations or transformations of the product.

Price Elasticity of Demand (PED)

Measure of demand sensitivity to price changes, calculated as %ΔQ ÷ %ΔP.

Elastic Demand (PED > 1)

Demand changes more than proportionately to price; common for luxury goods with substitutes.

Inelastic Demand (PED < 1)

Demand changes less than proportionately to price; common for necessities.

Unit Elastic Demand (PED = 1)

Percentage change in demand equals percentage change in price.