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Define the term 'market segmentation'
Splitting up a maket into different parts in order to focus on the need of specific groups (e.g. gender, age)
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What is meant by 'Quantitative' market research?
Numerical dats/statistics about the market, such as the % of respondents who do/ don't buy the products
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What are the 4 types of resources used in the production process ("factors of production")?
Land: raw materials & space to locate the firms; Labour: the skills of people to do the work; Capital: the equipment & finance; Enterprise: the ideas/risk-taking of the entrepreneur
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What is 'income budget'?
A target for the amount of sales revenue expected over a period of time
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Wha is a 'supply chain'?
It is the product's journey from raw materials, through manufacturing, to reail and finishing with the consumer
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Give one benefit of being a franchisee rather than a sole trader
The well known business name may bring marketing benefits/customer loyalty; business idea is already successful; maketing and promotional suppor from franchisor; support/advice on running the business from franchisor; May be easier to source finance
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How can a firm's 'margin of safety' be calculated
Actual output - Break-even level of output
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Give one advantage to a business of employing part-time staff
Cheaper than full-time, so this reduces business costs; May not be enough demand to justify full-time staff; more flexibility as the firm can increase time they work when demand increases
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Give one disavantage to a business of employing part-time staff
May be lower quality staff as best quality may want full-time work; May be less dedicated because less time at work; May have less experience/skill as less time working
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What is a 'patent'?
A way of registering and protecting a new invention, so tha no one else is legally allowed to copy it.
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How is a 'quota sample' selected?
A certain number of people are picked who fit into one (or more) spefic categories (e.g. mums between 30 & 40)
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Define the term 'added value'
Customers pay more for the finished product that it cost the business to produce
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Name 2 departments within a business and state the role of each
Production - turns raw materials into quality finsihed goods/servies; Finances - keep detailed and accurate financial records, manage cash-flow; Marketing - ensure the needs of customer are met
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What is the formula for calculating 'contribution per unit'
Selling Price per unit - Variable Costs per unit
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Using examples, explian the differences between 'fixed costs' and 'variable costs'
Fixed costs - don't vary with output (eg. rent); Variable costs - costs which do change as output chages (e.g. materials)
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What is meant by 'market share'?
The sales of one business as a proportion of total maket size = Sales / total market size x 100 = % of market share
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Describe one method by which Government encourages enterprise
Grants o set up new businesses (eg. enterprise investment scheme); Regional development agencies - give grants to set up in locations, that are specific; More enterprise education in schools
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Define the term 'entrepreneur'
A persone who raises the resources and organises the activities needed to start a business
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State 2 benefits of owning your own business
Bigger financial rewards that as an employee; enjoy the indepenedence of making own decisions; want the reponsibility of being the boss; opportunity o earn a living from something you're reall interested in
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What is the formual for calculating profit
Profit= Total revenue - Total costs
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What is a 'niche market'?
A tiny segment of a bigger market, focused on a small and specific group of customers
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How can 'market size' be measured
either by the total number of sales (volume) or by the total value of sales in £'s
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Define he term 'primary sector business'
An organisation involved in extracing raw materials from natural resources (eg farming, fishing, mining)
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What is meant by 'limited liability'
The owners are not personally responsible for the debts of the business
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Give one benefit of using an overdraft father than a bank overdraft rather than a bank loan as a source of finance
Quick and easy to set up; Flexible - can borrow only what's needed, when it's needed; May be cheaper than a loan - because only paying interest on what need to borrow ond only whilst it is needed
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Give one drawback of using an overdraft rather than a bank loan as a source of finance
Higher interst rate so could be more expensive if ysed oner a longer time period; Bank can remove/reduce overdraft at any time making it a more uncertain source of finance than a bank loan which is for an agreed length of time
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What is 'venture capital'?
Finance raised from professional investors who recieve a share in the ownership of the business in return for their investment
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What is a business plan?
A document that states what the owner(s) want to do the (objectives) and how they intend to do it (the stategies)
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What is meant by a Uniques Selling Point (USP)?
A single characteristic of a product that sets it apart from all competitor products (e.g. its design or innovative feature)
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Define the term 'cash-flow forecast'
an estimate of the amount of money that is expected to come into the business and flow out of the business over a period and flow out of the business over a period of time in the future
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List 2 skills or characteristics of a successful entrepreneur
creative; innovators - take an original idea and use it to fill a gap in the market; risk-takers - calculated risks in order to make a profit; effective planners; show perseverance
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What is meant by a 'secondary sector business'
Firms which process, maunufacture of construct raw materials into finished products
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Define zero budgeting
starting with a budget of £0 and justifying why any expenditure needs to happen
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State one benefit of 'zero budgeting' in order to set an expenditure budget
Helps to keep expenditure down because budget-holders have to justify for any spending; could be more accurate because it is based on what is expected to happen not what happened last year
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Give one benefit of being a Ltd. rather than a PLC
Can keep control over who shares are sold to; no minimum share capital so more sutable for smaller businesses
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Give one drawback to being a Ltd. rather than a PLC
Can't sell shares to general public so more restricted in how much finanace it can raise; shareholders can't sell their shares without agreement of other sharholders
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Other cards in this set

Card 2

Front

What is meant by 'Quantitative' market research?

Back

Numerical dats/statistics about the market, such as the % of respondents who do/ don't buy the products

Card 3

Front

What are the 4 types of resources used in the production process ("factors of production")?

Back

Preview of the front of card 3

Card 4

Front

What is 'income budget'?

Back

Preview of the front of card 4

Card 5

Front

Wha is a 'supply chain'?

Back

Preview of the front of card 5
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