A group of people that a business aims its products at
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Segmentation definition
When the market is divided into groups of needs and wants.
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Primary research definition
Finding your own new data
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Secondary research definition
Using existing data
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Imports definition
Bringing goods into a country from abroad for sale.
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Factors affecting location
Cost, Business type, Customer location, Comnpetitors, Raw materials, Labour availability + cost, Technology, Transport
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Advantages of locating overseas
Cheaper labour, Resource access, take advantage of fast-growing economies, financial incentives from foreign governments
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Disadvantages of locating overseas
Different rules + regulations, customers have different tastes, language barriers, transport costs.
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Fixed costs definition
Stay the same regardless of sales
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Variable costs definition
Change depending on sales
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Profit definition
The amount of money left over after costs have been taken away from revenue
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Break-even analysis definition
Enables a business to see how long it will take before they reach profitbility to see whether the business idea will work.
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Break-even point definition
the point at which total revenue and total costs are the same
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Margin of safety definition
How much current sales can fall by before a loss is made
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Profit formula
Total revenue - total costs
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Break-even formula
fixed costs/ selling price - variable costs
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Fixed cost examples
labour, rent, furniture, machinery, CCTV
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Variable cost examples
Packaging, ingredients, water, toys
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break-even advantages
A business needs to know if profit is being made, Helps them recognise if costs are too high or revenue too low, Business plans.
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break-even disadvantages
Assumes costs and sales remain the same - might have to cut price, costs could differ, Assumes everything is sold - extra storage costs, if any part of the graph is innacurate the whole thing is.
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Other cards in this set
Card 2
Front
Segmentation definition
Back
When the market is divided into groups of needs and wants.
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