Grade 10 Business Studies Vocabulary Flashcards

Flashcards based on definitions and concepts from the Grade 10 Business Studies lecture notes, organized page by page.

Start-up capital

The finance needed by an entrepreneur when first opening a business.

Working capital

The money needed to finance the day-to-day running expenses and pay short-term debts of a business.

Non-current (fixed) assets

Resources owned by a business which will be used for more than a year, for example buildings and machinery.

Capital expenditure

Spending by a business on non-current assets such as machinery and buildings.

Long term finance

Debt or equity used to fund the purchase of non-current assets or finance expansion plans; debt a business does not expect to repay in less than 5 years.

Short term finance

Loans or debt that the business expects to pay back within a year.

Retained profit

Surplus remaining after all expenses, tax and dividends have been paid, which is reinvested back into the business.

Overdraft

An agreement with the bank which allows a business to spend more money than is in its account up to an agreed limit, repayable within 12 months.

Trade receivables

Amount owed to a business by its customers who bought goods on credit.

Debt factoring

Selling trade receivables to improve business liquidity.

Bank loan

Provision of finance by a bank which the business will repay with interest over an agreed period of time.

Leasing

Obtaining the use of a non-current asset by paying a fixed amount per time period for a fixed period of time while ownership remains with the leasing company.

Hire purchase

The acquisition of an asset by paying fixed repayment amounts per time period over an agreed period; ownership passes on completion of the final repayment.

Mortgage

Long-term loans used for the purchase of land or buildings.

Debenture

Bonds issued by companies to raise long-term finance usually at a fixed rate of interest.

Share issue

A source of permanent finance available to limited liability companies that sells off pieces of the company to raise money for expansion.

Equity finance

Permanent investment capital provided by the owners of a limited company in exchange for a share of the company.

Micro finance

Small amounts of capital loaned to entrepreneurs in countries where finance is often difficult to obtain.

Quality

Ensuring a good or service meets the needs and requirements of its users.

Quality standards

The minimum acceptable standard of production or service for consumers.

Quality control

Checking the quality of goods through inspection.

Quality assurance

A system of setting agreed standards for every stage of production where the worker takes responsibility for ensuring the quality of their work.

Fixed costs

Costs that do not change with output.

Variable costs

Costs that change in direct proportion to output.

Total costs

All the variable and fixed costs of producing the total output.

Average costs

The cost of producing a single unit of output.

Economies of scale

The reduction of average costs as a result of increasing the scale of operations.

Diseconomies of scale

The factors that cause the average costs to rise as the scale of operations increases.

Break-even

The level of output where revenue equals total costs; where the business is neither making a profit nor a loss.

Margin of safety

The amount by which actual sales exceed the break-even level of output.

Production

The process of converting inputs such as land, labour and capital into saleable goods and services.

Productivity

A measure of the efficiency of outputs used in the production process, especially labour and capital.

Inventories

The stock of raw materials, work-in-progress and finished goods held by a business.

Lean production

Production of goods and services with the minimum waste of resources.

Job production

The production of items one at a time, normally a unique product like a wedding dress or a ship.

Batch production

The production of goods in batches where each batch passes through one stage of production before moving on to the next.

Flow production

The production of very large quantities of identical goods using a continuously moving process.

Capital intensive

Production process using a high quantity of capital equipment compared with labour output.

Marketing strategy

A plan to achieve the marketing objectives using a given set of resources.

Legal controls

Laws that control the activity of a business.

Barriers to trade

Usually taxes, quotas or bans that one country places on the goods of other countries to prevent or increase the cost of entry.

Domestic market

The market for goods and services in the business's own country.

Joint venture

An agreement between two or more businesses to work together on a project and set up a separate business to do so.

Wholesaler

A business that buys product in bulk from producers and then sells them to retailers.

Channel of distribution

How a product gets from the producer to the consumer.

Retailer

Shops and other outlets that sell goods and services to the final consumer.

Middleman

The intermediaries in the channels of distribution, for example retailers and wholesalers.

Direct selling

The product is sold by the producer directly to the final consumer without the need for any middlemen.

Promotion

Marketing activities used to communicate with customers and potential customers to inform and persuade them to buy products.

Advertising

Paid for communication with consumers using printed and visual media to inform and persuade.

Informative advertising

Information about the product is communicated to consumers to create product awareness.

Persuasive advertising

Communication aimed at getting customers to buy a firm's product rather than a competitor's using emotion rather than facts.

Above-the-line marketing

Mass marketing through paid-for advertising like television, radio, and newspapers.

Below-the-line promotion

Targeted marketing using incentives like coupons, loyalty cards, and competitions rather than paid advertising.

Sales promotion

Incentives used to encourage short-term increases in sales or repeat purchases.

Personal selling

Communication where sales staff interact directly with customers to achieve a sale and form long-term relationships.

Direct mail

Also known as mailshots; printed materials sent directly to the addresses of customers.

Sponsorship

Payment by a business to have its name or products associated with a particular event or person.

Marketing budget

The amount of money made available for marketing activities during a particular period of time.

E-commerce

The use of the internet, social media, and other technologies to market and sell goods and services.

Marketing mix

Four marketing decisions (the four Ps): the right product at the right price with the right promotion at the right place.

Product

The goods and services produced to satisfy a customer need or want.

Brand

The name, image or symbol that distinguishes a product from a competitor's product.

Brand image

The general impression of a product held by consumers.

Product life cycle

The pattern of sales of a product from introduction to its withdrawal from the market.

Extension strategies

Marketing activities used to extend the maturity stage of a product.

Price

The amount paid by the customer to the supplier when buying a good or service.

Product quality

Degree to which the product meets the needs and expectations of customers.

Market skimming

Setting a high price for a new product that is unique or very different from any other on the market.

Penetration pricing

Setting a low price to attract customers to buy a new product.

Competitive pricing

Setting a price similar to or the same as a competitor's products already established in the market.

Loss leadership pricing

Setting the price of a small number of products below cost to attract customers in hope they buy other profitable items.

Cost-price pricing

Setting price by adding a fixed amount to the cost of making or buying the product.

Demand

The quantity of goods and services consumers are willing and able to buy.

Price elasticity of demand

Measure of how much demand (sales) for a product changes when there is a change in price.

Price inelastic demand

The percentage change in demand (sales) is less than the percentage change in price.

Price elastic demand

The percentage change in demand is greater than the percentage change in price.

Revenue

$\text{Selling price} \times \text{number of units sold}$. The amount earned from a business through the sale of its products.

Market research

The process of collecting, recording and analysing data about the customers, competitors and market for a product.

Unique selling point

The special feature of a product that sets it apart from competitors' products.

Market orientation

Products are developed based on consumer demand and identified by market research.

Product orientation

The firm decides what to produce and then tries to find buyers for the product.

Primary research

The collection of first-hand data for the specific needs of the firm.

Secondary research

The collection of data from second-hand sources.

Quantitative research

The collection of numerical data that can be analysed using statistical techniques.

Qualitative research

The collection of information about consumer buying behaviour and their opinions about products.

Sample

A representative section of the target market selected to take part in market research.

Customer base

The group of customers a business sells its products to.

Market

All customers and consumers who are interested in buying a product and have the financial resources to do so.

Target market

Individuals or organisations identified by a business as the customers or consumers of their products.

Customer

An individual or business that buys goods or services from a business.

Consumer

The final user of a product.

Consumer market

Markets for goods and services bought by the final consumer.

Industrial market

Markets for goods and services bought by other businesses to use in the production process.

Business environment

The combination of internal and external factors that influence the operation of a business.

Free trade

No barriers exist that might prevent trade between different countries.

Niche marketing

Developing products for a small segment of the market.

Mass marketing

Selling the same product to the whole market.

Market segment

A part of the whole market in which consumers have specific characteristics.

Market segmentation

Dividing the whole market into segments by consumer characteristics and then targeting different products to each segment.