Edexcel A Level Business - Theme 1

Brand Name

A name, term, sign, symbol, design or any other feature that allows consumers to identify the goods and services of a business and to differentiate them from those of competitors

E-commerce

Conducting business transactions online

Online retailing

The retailing of goods online

Market

A set of arrangements that allows buyers and sellers to communicate and trade in a particular range of goods and services

Marketing

A management process involved in identifying, anticipating and satisfying consumer requirements profitably

Market share

The proportion of total sales in a particular market for which one or more businesses or brands are responsible. It is expressed as a percentage and can be calculated by value or volume.

Mass market

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

Niche market

A smaller market, usually within a large market or industry

Consumer panels

Groups of customers are asked for feedback about products over a period of time

Database

An organised collection of data stored electronically with instant access, searching and sorting facilities

Focus groups

Where a number of customers are invited to attend a discussion about a product led by market researchers

Market orientation

An approach to business which places the needs of consumers at the centre of the decision-making process

Market research

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

Market segment

Part of a whole market where a particular customer group has similar characteristics

Primary research or field research

The gathering of 'new' information which does not already exist

Product orientation

An approach to business which places the emphasis upon the production process and the product itself

Qualitative research

The collection of data about attitudes, beliefs and intentions

Quantitative research

The collection of data that can be quantified

Respondent

A person or organisation that answers questions in a survey

Sample

A small group of people who must represent a proportion of a total market when carrying out market research

Secondary research

The collection of data that is already in existence (also known as desk research)

Socio-economic groups

Division of people according to social class

Added value

The extra features that may be offered by a business when selling a product, such as high-quality customer service, which helps to exceed customer expectation

Competitive advantage

An advantage that enables a business to perform better than its rivals in the market

Market map

Typically a 2d diagram that shows two of the attributes or characteristics of a brand and those of rival brands in the market

Market positioning

The view consumers have about the quality, value for money and image of a product in relation to those of competitors

Product differentiation

An attempt by a business to distinguish its product from those of competitors

Reposition

Changing the view consumers have about a product by altering some of its characteristics

USP

The aspect or feature of a product that clearly distinguishes it from its rivals

Complementary goods

Goods that are purchased together because they are consumed together

Demand

The quantity of a product bought a given price over a given period of time

Demand curve

A line drawn on a graph that shows how much of a good will be bought at different prices

Inferior goods

Goods for which demand will fall if income rises or rise if income falls

Normal goods

Goods for which demand will rise if income rises or fall if income falls

Substitute goods

Goods that can be bought as an alternative to others, but perform the same function

Subsidy

A grant which is given to producers, usually to encourage production of a certain good

Supply

The amount of a product that suppliers make available to the market at any given price in a given period of time

Supply curve

A line which is drawn on a graph that shows how much of a good which sellers are willing to supply at different prices

Equilibrium price or market clearing price

The price where supply and demand are equal

Excess demand

The position where demand is greater than supply at a given price and there are shortages in the market

Excess supply

The position where supply is greater than demand at a given price and there are unsold goods in the market

Total revenue or total expenditure

The amount of revenue generated from the sale of goods calculated by multiplying price by quantity in a given period of time

Price elastic demand

A change in price results in a greater change in demand

Price elasticity of demand

The responsiveness of demand to a change in price

Price inelastic demand

A change in price results in a proportionately smaller change in demand

Discretionary expenditure

Non-essential spending or spending that is not automatic

Income elastic demand

The percentage change in demand for a product is proportionately greater than the percentage change in income

Income elasticity of demand

The responsiveness of demand to a change in income

Income inelastic demand

Where the percentage change in demand is proportionately less than the percentage change in income

Consumer durables

Goods that can be used repeatedly over a period of time, such as cars and household appliances

Design mix

The range of features that are important when designing a product

Ergonomics

The study of how people interact with their environment and the equipment they use - often in the workplace

Ethical sourcing

Using materials, components and services from suppliers that respect the environment, treat their workforce well and generally trade with integrity

Product design

The process of creating a new product or service

Recycling

Making use of materials that have been discarded as waste

Resource depletion

The using up of natural resources

Waste minimisation

Reducing the amount of resources that are discarded in the production process

Above-the-line promotion

Placing adverts using the media

Advertising

Communication between a business and its customers where images are placed in the media to encourage the purchase of products

Below-the-line promotion

Any promotion that does not involve the media

Emotional branding

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

Generic brands

Products that only contain the name of the product category rather than the company or product name

Manufacturer brands

Brands created by the producers of goods or services

Marketing mix

The elements of a business' marketing that are designed to meet the needs of the customers

Merchandising

A promotion specifically at the point of sale of a product

Own-label, distributor or private brands

Products that are manufactured for wholesalers or retailers by other businesses

Point of sale

Any point where a consumer buys a product

Promotion

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

Public relations

An organisation's attempt to communicate with interested parties

Sales promotions

Methods of promoting products in the short term to boost sales

Sponsorship

Making a financial contribution to an event in return for publicity

Viral marketing

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

Competitive pricing

Pricing strategies based on the prices charged by rivals

Cost plus pricing

Adding a percentage (the mark up) to the costs of producing a product to get the price

Mark up

The percentage added to unit cost that makes a profit for a business when setting the price

Penetration pricing

Setting a low price when launching a new product in order to get established in the market

Predatory pricing

Setting a low price forcing rivals out of business

Pricing strategy

The pricing policies or methods used by a business when deciding what to charge for its products

Product life cycle

Shows the different stages in the life of a product and the sales that can be expected at each stage

Psychological pricing

Setting the price slightly below a round figure

Skimming

Setting a high price initially and then lowering it later

Unit costs

The same as average cost (total cost divided by output)

Agent or broker

An intermediary that brings together buyers and sellers

Breaking-bulk

Dividing a large quantity of goods received from a supplier before selling them on in smaller quantities to customers

Direct selling

Producers selling their products directly to consumers

Distribution

The delivery of goods from the producer to the consumer

Distribution channel

The route taken by a product from the producer to the customer

E-commerce

The use of electronic systems to sell goods and services

Intermediaries

Links between the producer and the consumer

Retailer

A business that buys goods from manufacturers and wholesalers, and sells them in small quantites to consumers

Wholesaler

A business that buys goods from manufacturers and sells them in smaller quantities to retailers

Boston Matrix

A 2x2 matrix model that analyses a product portfolio according to growth rate of the market and the relative market share of products within the market

Extension strategies

Methods used to prolong the life of a product

Marketing strategy

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

Product lines

A group of products that are very similar

Product portfolio

The collection of products a business is currently marketing

Collective bargaining

A method of determining conditions of work and terms of employment through negotiation between employers and employee representatives

Flexible workforce

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

Home workers

People who undertake their regular work from home

Industrial action

Disruptive measures taken by workers to apply pressure on employers when disagreement cannot be resolved