Business studies unit 3

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product trial
when consumers buy a good for the first time and assess whether or not they want to buy it again
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Public Relations
Promotion of a positive image about a product or business through giving imformation about the product to the general public
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Viral Marketing
Getting individuals to spread a message about a product through their social networks like facebook or their group of friends
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Penetration Pricing
Setting an initial low price for a new product so that it is attractive to customers. The price is likely to be raised later as the product gains market share
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Trade Buyers
Buyers of goods which then sell those goods on to consumers or other buyers; they include supermarket chains and whole salers
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Businesses which specialise in selling goods in small quantities to the consumer
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Customer loyalty
The willingness of buyers to make repeated purchases of a product or from a business
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Repeat Purchase
When a customer buys a product more than once
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Product Life Cycle
The stages through which a product passes from its development to being withdrawn from sale; the phases are research and development, launching the product, growth, maturity, saturation and decline
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Research and Development
The process of scientific and technological research and then development of the findings of that research before a product is launched.
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Extension Strategy
Method used to increase the life of a product and prevent it failing into decline
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The management process that is responsible for anticipating, identifying and satisfying customer needs profitably.
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Market Research
The process of gaining information about customers, competitors and market trends through collecting primary and secondary data
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Primary Data
Information that has been gathered for a specific purpose through direct investigation such as observation, surveys and experiments
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Secondary Data
Information that already exists such as accounts and sales records, government statistics, newspaper and internet articles and reports from advertising agencies.
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Quantitative Data
Data that can be expressed as number and can be statistically analysed
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Qualitative Data
Data about opinions , judgements and attitudes
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Research involving asking questions of people or organisations
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Those who provide data for a survey usually by asking questions
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Market Segment
Part of a market that contains a group of buyers with similar buying habits
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A small group out of the total population which is selected to take part in a survey
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A list of questions to be answered by respondents, designed to give information about consumers tastes
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Product Portfolio or Product Mix
The combination or range of products that a business selss
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Product Portfolio Analysis
Investigation of the combination of products sold by a business
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Boston Matrix
A model which analyses a product portfolio according to the growth rate of the whole market and the relative market of a product within that market; a product is placed in one of four categories- star, cash cow, problem child or dog
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A named product which consumers see as being different from other products and which they can associate and identify with
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Generic Product
A product made by a number of different bussinesses in which customers see very little or no difference between the product of one business compared to the product of another business
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Own Brand
A product which is sold under the brand name of a supermarket chain or other retailer rather than under the name of the business which manufactures products
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Product Differentiation
Making one product different from another in some way, its design, packaging or advertising
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Premium Price
A price which is above average for products of a particular type
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Marketing Mix
a combination of factors which help a business to take into account customer needs when selling a product, usually summarised as the 4ps( price, product, promotion and place)
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Design Mix
the range of variables which contribute to successful design; they are function, cost and appearance
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Materials that a business holds. Some could be materials waiting to be used in the production process and some could be finished stock waiting to be delivered to customers
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Maximum stock levels
The highest amount of stocks to be kept by a business
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Re-order Level
The amount of stock held by a business at which an order for new stock is placed with suppliers
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Buffer Stock level or minimum stock level
The lowest amount of stock to be kept by a business
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Just In Time (JIT)
A stock management system where stocks are only delivered when they are needed by the production system, and so no stocks arekept by a busines
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Achieving a minimum standard for a product or service, or a production process which meets customer needs
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Quality Control
Ensuring that a product or service meets minimum standards, often through testing of sample products once they have been made
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Quality Assurance
Ensuring that quality is produced and delivered at every stage of the production process. often through making quality the responsibility of every worker
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Cash Flow
The flow of cash into and out of the business
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Financial Management
Deliberately changing monetary variables like cash flows to achieve financial objectives such as improved cash flow
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Reducing the levels of stocks in a business
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Trade Credit
Where a supplier gives a customer a period of time to pay for a bill (or invoice) for goods or services once they have been delivered
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Occurs when the revenues of a business are greater that it costs over a period of time
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The amount of money recieved from selling goods or services over a period of time
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Break-even Point
The level of output where total revenues are equal to total costs; this is where neither a profit nor a loss is being made
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Total Revenue
The revenue earned by a business from the sale of a given quantity sold x average price
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Total costs
All the costs of a business; equal to fixed costs plus variable costs
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Customer Service
The experience that a customer gets when dealing with a business and the extent to which that experience meets and exceeds customer needs and expectations
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The process of transforming inventions into products that can be sold to customers
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Sale of goods legislation
Gives consumers rights to compensation if a product they buy is not of merchantable quality, not as described or not fit for purpose
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Trade description legislation
Makes businesses liable for prosecution and fines if products are sold in a misleading way
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Fixed Costs
Costs which do not vary with the amount produced, such as rent, bsuiness rates, advertising costs, administration costs and salaries
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Variable Costs
Costs which chnage directly with the number of products made by a business, such as the cost of buying raw materials
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Break-even chart
A graph which slows total revenue and total cost, allowing the break-even point to be drawn
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Margin of safety
The amount of output between the actual levels of output where profit is being made and the break-even level of output; if the margin of safety is zero, then the production is at or below the break-even level
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Financing a business
How a business obtains money and other financial resources to start up, expand and if necessary pay off losses it has made
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Internal sources of finance
Finance which is obtained within the business such as retained profit or the sale of assets
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External sources of finance
Finance which is obtained from outside the business such as bank loans and cash from the issue of new shares
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Retained profit
Profit which is kept back in the business and used to pay for investment in the company
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Equity or share capital
The monetary value of a business that belongs to the business' owners. In a company, this would be the value of their shares.
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A part ownership in a business; for example a shareholder owning 25% of the shares of a bsuiness owns a quarter of the business.
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Borrowing money from a bank by drawing more money than is actually in a current account. interest is charged on the amount overdrawn
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A long-term loan where typically interest is paid at regular intervals like a yaer and the loan is all repaid at the end of the life of the bond. Bonds are traded on the stock markets
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Removing layers of management and workers in hierarchy so that there are fewer workers in the chain of command
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Giving more responsibility to workers further down the chain of command in hierarchy
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When a business employs fewer workers to produce the same amount through increases in productivity which can be achieved through delayering
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Span of control
The number of people who report directly to another worker in organisation
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Passing down of authority to work to another worker further down the hierarchy in organisation
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A type of business organisation where decisions are made at the centre or core of the organisation and then passed down the chain of command
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A type of business where decision-making is pushed down the hierarchy and away from the centre of the organisation
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In work, the desire to complete a task
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The way in which a business in structured for it to achieve its objectives
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Organisation chart
A diagram which shows the internal structure of an organisation
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Structure of different levels of authority ina business organisation, one on top of the other
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Line Manager
Employee who is responsible for overseeing the work of others further down the hierarchy of an organisation
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Tasks or jobs. Organisation by functions means that a business is organised according to tasks that have to be completed, such as production or finance
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The right to decide what to do in a situation and take command of it to be able to make decisions without referring to anyone else.
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Workers in the hierarchy who work under the control of a more senior worker.
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Chain of command
The path (or chain) down which orders (or commands) are passed. In a company, this goes from the board of directors down to other workers in the organisation
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Hierarchy of Needs
Placing needs in an order of importance, starting with the basic needs.
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Messages passed between sender and reciever, through a medium such as a laterr or email.
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Response to a message by its reciever tots sender
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Internal communication
Communication within the business organisation
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External communication
Communication between the business and an outside individual or organisation like a customer, a supplier or a tax inspector
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Channel of communication
The path taken by a message, such as horizontal communication, vertical communication or grapevine communication
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Formal channels of communication
Channels of communication that are recognised and approved by the business and by employee representatives such as trade unions
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Information communication or communications through the grapevine
Communication through channels are not formally recognised by the business
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Payment systems
Methods of organising the payment of workers, such as piece rates or salaries
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Manual or blue collar workers
Workers who do mainly physical work like an assembly line worker
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Tend to be paid to manual workers for working a fixed number of hours per week plus overtime
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Time worked over and above the basic working week
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Basic Pay
Pay earned for working the basic working week
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Non-manual or white collar workers
Worker who do non-physical work, like an office worker or teacher
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Pay, usually of non-manual workers, expressed as a yearly figure but paid monthly
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Payment system usually operated for sales staff where their earnings are detrmined by how much they sell.
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Addition to the basic wage or salary, for instance, for achieving a target
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Part-time workers
Employees who work only for a fraction of the working week
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Full-time workers
Employees who work the whole of the working week
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Business Ethics
Ideas about what is morally correct or not, applied ina business situation
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Supply chain
The processes that are involved in the route taken by a product from the raw materials needed to create it right through to the final customer
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Developed countries
Coutries with a relitavely high income per person
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Developing countries
Countries with a lower income per person than developed countries
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An import is the purchase of a good or service that leads to a flow of money out of the UK. The UK buyer will have to change pounds into the sellers country to coplete the purchase
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An export is the sale of a good or service to a foreign buyer that leads to the flow of money coming into the UK. The foreign buyer will have to change their currency into pounds to cpmplete the purchase
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Protectionalist Policies
Measures designed to reduc foreign products coming into a country but give an advantage to domestics firms to sell products at home or export products
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Tariffs or customs duties
Taxes put on goods imported into a country which make them more expensive
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Limits on the physical number of goods that can be imported over a period
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Export subsidies
Measures that reduce the price of goods sold abroad
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Minimum wages
The lowest payment for hour, day or week that can be given to a wroker for their work
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Temporary Workers
Workers who have no payment contract of employment with a business and so tend to work only for a short period of time
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Freelance workers
Workers who tend to be self-employed and do particular pieces of work for a business as a supplier
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Fringe Benefits
Payments in kind over and above the salry such as a company car
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Other cards in this set

Card 2


Promotion of a positive image about a product or business through giving imformation about the product to the general public


Public Relations

Card 3


Getting individuals to spread a message about a product through their social networks like facebook or their group of friends


Preview of the back of card 3

Card 4


Setting an initial low price for a new product so that it is attractive to customers. The price is likely to be raised later as the product gains market share


Preview of the back of card 4

Card 5


Buyers of goods which then sell those goods on to consumers or other buyers; they include supermarket chains and whole salers


Preview of the back of card 5
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