business unit five key words

financial control

is needed to ensure that the firm has good liquidity and can pay short term debts when due

job production

producing individual items, one at a time, bespoke to meet consumer demands, eg tailor made suits

batch production

producing products in large groups or batches in one production run, products are homogenous eg, 100 white bread loafs then 100 brown bread

mass production

goods are produced in a continuous 24 hour system, producing identical goods, eg Coca Cola

subcontracting

the firm finds another firm to produce some or all its products

business plan

a detailed written document outlining the firms long term goals and its strategies to achieve these goals it includes, business details, production details, market details and ownership details

brain storming

group of skilled personnel talk together to generate new ideas or solutions, in atmosphere of no criticism to evaluate the best ideas and solutions

import substitution

locating sn imported product on sale on the Irish marked and adapting it with a home produced product of a similar price and quality

USP

is a feature of the product or service which is promoted in order to make is appeal to the target market and differentiate it from competitors goods

prototype development

this is a model or experimental first working of the product , it demonstrated the design so the business can make necessary modifications

marketing

the process of identifying the consumers needs through market research and then producing a product to satisfy their needs using th marketing mix

the market

refers to the people that a market is aimed at, the potentilla buyers of the good or service

market research

concerned with the systematic gathering, recoding and analysing of the info concerning the market and accurately identifying consumers needs

qualitative information

discovers the consumers opinion and values, eg surveys

quantitive information

provides info in the form of numbers and figures is gathered by observation

desk research

researching, accessing and analysing information about the marked using data available within the business or magazines, government publications, is secondary , lacking detail but can be gathered quickly and with little cost

field research

researcher makes contact with the market by interviewing or observing them, this is primary data as the firm itself is carrying out the research, it is accurate although can be time consuming and costly

observation

watching what consumers choose and disregard in the marketplace and record it

survey

researchers making direct contact with the market and interviewing them about their product this gathers both quantitative and qualitative info

a sample

a representative part of the market

focus group

firm gathers people who represent their typical consumer and ask their opinion on a new product, using their feedback to make neccesary adjustments

marketing concept

the firm makes effort to understand the needs and wants of it consumers in the market place and adapting the operations to deliver the right goods

marketing strategy/plan

a written long term plan outlining the steps the firm takes to achieve its marketing objective and future direction

marketing niche

is a smaller within a larger market

target market

a precise description of th customer a product is aimed at, and then the appropriate marketing mix for each targeted market

market segmentation

market can be divided into different clearly identifiable segments which in some way differ from eachother, based on demographics, location or lifestyle

demographic segmentation

segmenting market based on know characteristics of TM such as age income or gender

geographical segmentation

dividing up the market based on location factors eg urban or rural regions

psychological segmentation

the market is segmented according to social class, lifestyle or personality

product

the good or service produced to meet the consumers needs

the product lifecycle

the level of sales a product goest through from introduction to decline over a period of time , it measures sales growth over a specific time period

the portfolio

describes the range of products produced by the firm

packaging

this is the physical protection provided with the product to prevent handling damage, contamination or tampering, it should showcase the USP

branding

creating a name, design, term or symbol that identifies one sellers goods as distinct from other sellers

own label brands

sold by large retailers with the retailers own name on them

price

this is the value place on what is being exchanged

cost plus pricing

the price of the good must be greater than the cost of producing that good

premium pricing

price is set at high rate to ensure consumers recognise that the product is of superior quality

price skimming

at the launch stage consumers are charged a high price as there is a high demand

penetration pricing

at launch some firms introduce at low introduction price to capture as much of a market share as possible

price discrimination

when goods are sold to different consumer in different markets at different prices , not due to cost differences

loss leader

product is sold at a price below its market value to stimulate other sales of more profitable goods

going rate pricing

setting price at a similar price to the competition

predatory pricing

extremely low price strategy in order to drive the competition form the market

mark up / gross profit margin

firm adds a standard percentage to the direct cost of production of purchasing a good

fixed costs

these are costs that do not change even though output Is increased

variable costs

these costs do change when out put increases

total costs

the fixed costs plus the variable costs , total cost of production

total revenue

the money the firm receives from selling it goods

profit

the positive difference between the total costs spent to produce and sales

loss

when the cost of production is greater than the sales

breakeven

the level of sales at which the firm is neither making a profit or a loss

margin of safety

refers to the amount of units the firm is selling above the breakeven

promotion

refers ti all the means the firm uses to communicate to its TM to initiate, maintain or increase sales

advertising

the communication of information about a product through he media to initiate maintain or increase sales

informative advertising

gives data or factual information to the target market eg covid 19

competitive advertising

defensive strategy where they tell the TM that their products are superior to that of a competitors

reminder advertising

is conducted for products in decline phase aimed at extending the goods life

generic advertising

where a service is advertised by a government body or the industry itself, eg tourism Ireland

persuasive advertising

designed to create an emotional response so the TM will desire the product or service

sales promotions

specific short test incentives or direct inducements which add value to the product

competitions

firms will run competitions to increase the sale of a particular product, attracting consumers with the prize

vouchers

reduce the cost of the consumers next purchase generating loyalty

special offers

offer attractive gifts with their products to attract their TM , mcds free toy

loyalty cards

offer consumers ability to collect points that will give them a discount on certain products generating repeated sales

merchandising

display of particular goods in a prominent visible section of the shop to urge impulse buying

direct selling

the sales person makes direct contact eight the consumer to try and persuade them to buy the good or service , forms relationships and firm can hear feed back

public relations

involves establishing and maintaining a positive image with the public for the firm and its products

sponsership

the financial support of an event by an unrelated organisation or donor

endorsement

firm gets a public celeb to wear and praise their firms products to globally increase sales

place

fits must ensure their product is in the appropriate place at the right time and is delivered using the correct channel of distribution

wholesaler

businesses that put in bulk from the manufacturers and sell in smaller quantities to the retailer

retailer

outlets air the end of the channel of distribution which sell goods to consumers

expansion

the growth of the business organically or inorganically for defensive, aggressive or psychological reasons

organic expansion

the natural expansion of a business through its own resources

inorganic expansion

is expansion through aquiring or linking with other independant enterprises

franchising

involves the grading of a licence by a franchiser to the franchisee entitling them to sell a product , helping franchiser expand rapidly.

strategic alliance

a temporary link between two or more firms who cooperate for mutual benefit , pooling resource and expertise , firms are still legally independent

merger

two or more firms of equal size agree to join permanently for their mutual benefit to form a single firm, it is friendly

take over

occurs when a firm purchases more than 51% of another firms equity capital to gain effective control in a hostile manner permanently