Business - Unit 3

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  • Created by: Carolyn
  • Created on: 26-05-14 13:06
Involves identifying and understanding customer needs and wants. Businesses can then provide products and services that meet these needs profitably.
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Market segmentation
A group of customers in a market with similar characteristics and needs.
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Market research
Gathering information about customers, competitors and market trends by collecting primary and secondary data. This information is used to help a business make decisions.
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Product trial
When consumers buy a product for the first time to assess whether or not they want to buy it again.
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Repeat purchase / Customer loyalty
Where customers will buy a product more than once and keep coming back.
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Extension strategies
Involves slightly changing the product so that it has a fresh appeal to the target market or appeals to a new market segment.
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Product mix/portfolio
The range of products that a business sells.
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Cash flow
The movement of money into and out of a business. It changes over the life of a product.
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The Boston Matrix
A product portfolio analysis tool used to plan the development of products.
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Product portfolio analysis
When a business analyses its product mix to plan their developments. The ...... is an example of a product portfolio analysis tool.
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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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Market map
Can show the difference between strongly branded products.
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Product differentiation
Making a product different from others in some way. It helps to position their products and target different market segments, and to gain an advantage over rivals when faced with competition.
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Marketing mix
A combination of factors which helps a business to take into account customer needs when selling a product. It is often referred to as ....
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Design mix
The three aspects of that contribute to a successful design (function, cost and appearance).)
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Scientific research
Involves using scientific methods to develop new technologies, processes and materials for product invention and innovation.
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Managing stock
Managing the materials that a business holds in the most efficient and effective way. Stock can include materials waiting to be used in the production process, work in progress, and some can be finished stock waiting to be delivered to customers.
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Just in Time stock control
A stock management system where stock is delivered only when it is needed for production, so no stock is kept by a business. To work well the business must have good relationships with suppliers, an organised production system and regular demand.
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Quality control
One part of the chain production, where a quality manager will examine and/or test a sample for quality once a product has been made.
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Quality assurance
Involves focusing on quality at every stage of the production process. Every worker is involved and responsible for the products' quality. As a result, there should be zero defects.
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Output per worker. It measures how much each worker produces over a period of time. Total output / number if workers
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The Sale of Goods Act
Relates to the products and services being sold by businesses. All products must be of merchantable quality, match their description and be fit for purpose.
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The Trade Descriptions Act
Relates to how businesses deal with and sell to customers. All businesses must not give false information, withhold important information or force the sale.
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Financial management
Changing monetary variables such as cash flows to achieve financial objectives such as improved cash flow.
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Break-even output
Fixed costs / (sales revenue) or (price per item - variable cost per item)
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Price - variable cost
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Margin of safety
The amount of output between the actual level of output where profit is being made and the break-even level of output. This is how much production could fall before the business starts to make a loss.
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Break-even analysis
A useful tool to help a business make decisions and set targets, and plan for the future.
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Break-even point
The point on a break-even chart where total costs and revenue meet (are equal).
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Internal finance
Sources of funds from within the business used to finance growth, e.g. retained profit, asset sales, owner's funds.
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External finance
Sources of funds from outside the business used to finance growth, e.g. overdraft, loans, trade credit, share capital.
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The payments system adopted by a business to pay and reward employees.
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When something is given up in order to gain or achieve something else.
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Pressure groups
Organisations that try to get businesses to change what they are doing.
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A limitation on the quantity of imports allowed from one country.
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Export subsidy
Paid by the government to a business when it makes a successful export. This is designed to encourage businesses to export more, and make it cheap to do so.
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Tariffs and customs duties
Tax imports and make them more expensive.
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Where a firm has some kind of advantage over a rival firm, such as higher productivity, that will allow it to gain customers from rivals.
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Other cards in this set

Card 2


Market segmentation


A group of customers in a market with similar characteristics and needs.

Card 3


Market research


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Card 4


Product trial


Preview of the front of card 4

Card 5


Repeat purchase / Customer loyalty


Preview of the front of card 5
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