AQA A Level Business

niche market

When businesses identify and satisfy the demands of a small segment of a larger market

Mass Marketing

When businesses aim their products at most of the available market

Dynamic market

A market that is constantly changing to customers needs and wants

Risk

Degree of uncertainty of return on an asset; in business, the likelihood of loss or reduced profit.

market research

The activity of gathering information about consumers' needs and preferences.

Primary Research

research done firsthand for the first time

Secondary Research

past research which has already been performed and often already published

Qualitative Research

research that relies on what is seen in field or naturalistic settings more than on statistical data

Quantitative Research

research that collects and reports data primarily in numerical form

Sampling

The process of selecting representative units from a larger population

Marketing Segmentation

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs

Market Targeting

the process of evaluating each market segment's attractiveness and selecting one or more segments to enter

market positioning

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

Market mapping

Helps businesses to identify market segments and position their products through identifying gaps in the market

product differentiation

a positioning strategy that some firms use to distinguish their products from those of competitors

Customisation

The creation of individualised products to meet the specific needs of the customers

Added value

the difference between the cost of purchasing raw materials and the price the finished goods are sold for

substitute

A similar rival product that consumers may choose instead.

complementary goods

Goods that are commonly used with other goods

Indirect taxes

Taxes imposed by the government on goods and services

equilibrium price

the price that balances quantity supplied and quantity demanded

Elasticity

The ability of a material to bounce back after being disturbed

Marketing Mix

Product, Price, Place, Promotion, people, process, physical environment

promotion

Advance an employee earns by being productive, cooperation, dependable, and highly skilled.

Branding

The promotion of a product or service by identifying it with distinct characteristics (usually associated with public perception, quality or effectiveness)

Distribution

The range of activities necessary to make the product available to customers

multichannel distribution

Where firms use more than one type of distrubution channel e.g. shops, online, click and collect.

marketing strategy

the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships

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.

Extension strategies

Methods used to prolong the life of a product

Flexible workforce

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

Outsourcing

Hiring workers in other countries to do a set of jobs

redundant

When an employer reduces its workforce because a job or jobs are no longer needed

Induction

The training given when an employee joins to familiarise them with the business and workplace

Labour turnover

The rate at which workers leave a business

hierarchy

A group organized by rank

chain of command

the order of authority within a facility

authority

the power or right to give orders, make decisions, and enforce obedience.

span of control

the number of subordinates who report directly to a manager

Centralisation

Keeping all of the important decision-making powers within head office or the centre of the organisation

Decentralisation

Decision-making powers are passed down the organisation to empower subordinates and regional/product managers

matrix structure

an organization combines functional and divisional chains of command in a grid so that there are two command structures-vertical and horizontal

Motivation

a need or desire that energizes and directs behavior

Manager

one who handles business affairs

Leader

someone who can influence others and who has managerial authority

Entrepreneur

A person who organizes, manages, and takes on the risks of a business.

Objectives

specific results that a business wishes to achieve

corporate business

Business that have a legal identity that is separate from that of their owners

limited liability

A form of business ownership in which the owners are liable only up to the amount of their individual investments.

Franchising

A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a business using a name and format developed and supported by the franchisor.

sales forecast

A prediction of future sales over a specific period of time

Social enterprise

A business that is set up to help society rather than to make a profit.

oppurtunity cost

The next best alternative foregone

Business Angels

individuals who invest their personal capital directly in start-ups

Crowdfunding

using social networking to appeal to potential investors

trade credit

the practice of buying goods and services now and paying for them later

unlimited liability

The owner is personally and fully responsible for all losses and debts of the business

business plan

a formal written document that describes the nature of a business and how it will operate

Cash flow forecast

forecast that predicts the cash inflows and outflows in future periods, usually months or quarters

extrapolation

the act of estimation by projecting known information

Trend

a general direction in which something is developing or changing

revenue

money recieved from sales

variable costs

costs that vary with the quantity of output produced

fixed costs

Costs that do not vary with the quantity of output produced

breakeven point

the point at which the costs of producing a product equal the revenue made from selling the product

contribution

The amount of money left over after variable costs have been subtracted from revenue. The money contributes towards fixed costs and profit.

Margin of Safety

difference between your actual or expected profitability and the break even point

budget

A plan for making and spending money

Variance Analysis

Statistical method for identifying the degree of difference between planned and actual performance or outcomes.

profit

total revenue minus total cost

Gross Profit

Sales revenue - cost of sales

operating profit

Gross Profit - Expenses

Profit for the year

Operating profit + profit from other activities - net finance costs - tax

Statement of Comprehensive Income

A financial document showing a company's income and expenditure over a particular time period, usually one year

profit margin

net income/net sales

Liquidity

the ease with which an asset can be converted into cash

Balance Sheet

A financial statement that reports assets, liabilities, and owner's equity on a specific date.

Assets

money and other valuables belonging to an individual or business

Liabilities

Amounts owed to creditors

current assets

cash and other assets expected to be exchanged for cash or consumed within a year

Current Liabilities

liabilities due within a short time, usually within a year

Working Capital

current assets - current liabilities

business failure

a business that has stopped operating with a loss to creditors

Productivity

the quantity of goods and services produced from each unit of labor input

competitiveness

How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services

unit cost

A unit rate that gives the cost per unit.

Efficiency

The percentage of the input work that is converted to output work

capital intensive

using more capital than labor in the production process

Labour intensive

where production relies more heavily on labour relative to machinery

Capacity utilisation

Actual level of output / maximum possible output x 100

dynamic pricing

adjusting prices continually to meet the characteristics and needs of individual customers and situations

just in time

a logistics process in which goods arrive when needed for production, use, or sale rather than sitting in storage

Lean production

a management approach that organizes resources such as people and machines around the flow of business processes and that only produces units in response to customer orders

Quality Assurance

The maintenance of a desired level of quality in a service or product

Total Quality Management (TQM)

a management philosophy that focuses on satisfying customers through empowering employees to be an active part of continuous quality improvement

Kaizen

continuous improvement

Inflation

A general and progressive increase in prices

exchange rate

The measure of how much one currency is worth in relation to another.

monetary policy

Government policy that attempts to manage the economy by controlling the money supply and thus interest rates.

interest rates

The cost of borrowing money