Key Terms (Unit 1)

Primary Sector- Involves extraction of raw materials also includes fishing and forestry.

Secondary sector- Involves manufacturing and construction.

Tertiary sector- Involves providing a service.

Specialisation- is when individuals, companies or whole economies concentrate on making specific goods or providing specific services.

Division of labour- is a particular type of specialisation where the production of a good is broken up into many separate tasks.

Interdependence- where one firm relies on another e.g. a baker relies on a farmer for wheat.

Demand- the amount people want to buy at a given price.

Supply- the amount the producers/ businesses want to sell at a given price.

Price competition- setting a different price to your competitors.

Non-price competition- using ways other than price to compete.

Mass marketing- when you are selling to a large amount of people.

Niche marketing- when you are targeting a certain audience.

Enterprise- taking risks and developing new ideas for successful businesses.

Entrepreneur- the person who shows enterprise qualities.

Venture capital- wealth available for investment in new or speculative enterprise.

Franchise- when a business sells the right to use its successful business model in order to expand.

Franchisee- the person or business who buys the franchise.

Franchisor- the person or business who sells the franchise.

Royalty- payment to the holder/ patent/ copyright/ resources for the right to use their property.

Aims- long term target

Objectives- shorter-term targets, on the way to reaching an aim.

Mission statements- a summary of what the company is about and what they want to achieve.

Stakeholder- an individual or group who has a interest in the way a business preforms and operates.

Dividend-is a portion of corporate earnings paid out to shareholders.

Business plan- is a document that tries to find out if an entrepreneur’s idea is likely to be successful. It considers financial and non-financial aspects.

Unlimited liability- is when the debts of a sole trader or a partnership are greater than what the business is worth and so the owners is financially responsible and has to pay with his/her own assets.

Limited liability- is when is your business goes bust you don’t have to pay off your debts with your own assets. (Pay the debt, up to the original investments.)

Sole trader- is a business that is owned by one person.

Partnership- is a business that is owned by 1-20 and everything is shared profits and losses.

The Prince’s Trust- this is a charity in the United Kingdom founded in 1976 by the Prince of Wales to help young people set up businesses.

USP (unique selling point) - what makes a product or service stand out from the competition.

Primary research- this is when you conduct the marketing research by yourself. It produces unique data.

Secondary research- this is when you get the marketing research from a book or from the internet…