Business Key Terms

Frage	Antworten
Above the line promotion	Promotion in the form of advertising
Adverse variance	actual figures that are worse than planned figures
Advertising media	the means by which advertisments can be communicated to the public
Advertising	a form of advertising between a business and its customers where a buisnesss uses visual, oral and pictoral images in the media to encourage the purchase of products
Agent/Broker	an intermediatary which arrages contracts for the sale of products between a supplier and a customer
Assset-led marketing	where a business combines its knowlege of the market with an understanding of its strengths and weaknesses to decide what products to bring to market
Authority	the right to command a situation, task or activity
Barrier to entry	factors whcih make it diffcult or impossible for business to enter a market and compete with existing producers
Below the line promotion	promotion that is not media advertising
Boston Matrix	a model which analyses a product portfolio according to the growth rate of the market and the relative market share of products within the market
Brand leader	a brand with the high sales or sometimes the brand with the highest sales in the market
Brand loyalty	the extent to whci hcustomers of a brand repeat purchases of that brand rather than others
Brand	a name, term, sign, symbol, design or any other feature that allows cnsumers to identify the goods and services and differentiate them from those of competitiors
Budgeting	a business system which involves making future plans, comparing the actual results with the planned results and then investigating causes of any differences
Business to business marketing	where a business markets its products to other businesses
Capacity Utilisation	the use that a business makes of its resources
Capacity	the possible maxium output a business can produce
Cartel	a group a businesses which join together to agree on pricig and output in a market in an attempt to gain higher profits at te expense of customers
Chain of command	the way authority and power are passed down in a business
Competiton rivalry	rivalry between buisnesses offering products in the same market, it can take many forms such a price competition, advetising and distribution
Consumer Marketing	where a business is marketing to consumers
Consumer products	Goods or services sold to individuals for personal consumption
Contribution pricing	when a business sets its price to cover all of its variable costs, but only a contribution is made to fixed costs and profit
Cost based pricing	methods of pricing products which are based on costs
Credit control	the process of monitoring and collecting the money owed to a business
Creditors	those to whom a business owes money to for goods and services delivered but not paid for yet
Customer Services	a series of activities designed to enhance the level of customer satisfaction
Delegation	authority passeed down from superior to subordinate
Direct marketing	selling by manufacturers direct to consumers without passing theough retailers or wholesalers
Distribution channel	the path taken by a product as it goes from manufacturer to the ultimate customer
Excess Capcity	when a business has too many resources, such as labour and capital, to produce its desired level of output
Extension Strategy	methods used to extend the life of a produ
External recruitment	when a employer looks for applicants for a job outside the organisation
Favorable variance	actual figures better than the planne dfigures
Going Rate Pricing	where prices is set equal to the prices of similar products in the market
Gross Profit Margin	gross profit expressed as a percentage of sales revenue
Gross Profit	total sales revenue minus cost of sales
Growth	stage of product life cylce where the product has become establishes and customers are becoming aware of it
Hawthorn Effect	the idea taht workers are motivated by recognition given to them as a group
Hierarchy	th elevels of management of a business from lowest to highest
Hygiene Factors	those things that can lead to workers becoming dissatisfied
Informative advertising	advertising which primarily seeks to provide consumers with information about a product
Internal Recruitment	when an employer seeks to find applicants for a job from inside the organisation
Job analysis	a studt of what a job entails, such as skills, tasks and performance expected
Job Description	a statement of the task to be undertaken and responsibilities of the employee holding the job
Labour Productivity	output per worker
Labour Turnover	the proportion of staff leaving the business over a period of time
Loss Leaders	products with prices set deliberately below average total cost to attract customers who will then buy other, more profitable, products
Market Structures	the charaterisitics of a market, such as size of the barriers to entry to the market, number of businesses in the market, which determine the behaviour of businesses within the market
Market intermediary	a business or individual which acts as a link between the producer and customer
Marketing Mix	The elements of a business marketing that are designed to meet the needs of its customers. Elements are reffered to the 4 P's
Marketing	the management process invloved in identiftying, anticipated and satisfying consumer requirement profitbly
Market-orientation pricing	where a business takes intoaccount conditions in the market without setting prices
Mass Marketing	the marketing of a product to all possible customers in te same way
Merchandising	a promotion specifically the point of sale promotion
Monopolistic competition	a market structure where there is a large number of small busiinesses producing differentiated, branded products, where the barriers to entery are low and businesses are price setters
Monopoly	a market structure wher theer is a single business in the market and there are barriers to entry
Motivators	those things that can lead to workers being satisfied
Net profit margin	net proft expressed as a percentage of sales revenue
Net Profit	total sales revenue minus costs of sales and overheads
Niche Marketing	the marketing of theproducts to a particular, small segment of the market
Oligopoly	a market structure where a few large businesses dominate the market producing differntiated, branded, products, where barriers to entry are low and where businesses are price-takers
operational targets	the goals set by a business that must be achieved in the production of a product or provision or a service
Operations Management	the organisation and control of the process by which inputs, such as labour are transformed into final products or by which services are provided to customers
Overtrading	a sistuation where a business does not have enough cash and liquid resources to support its production and sales
Penetration Pricing	when a business sets low prices in an attempt to enter a new market
Persuasive adevertising	advertising which seeks to influence and persuade consumers to buy a product
Point of Sale	any point where a customer buys a product
Premium Pricing	wher high prices are charged to reinforce the quality and luxury imaghe of a product
Price Skimming	where a product with a USP may have a high price for a limited period o time to tahe advantage of the newness of the product
Price Taker	a business that is unable to choose the price it sets an follows the market price
Pricing Strategies	the pricing policies or methods of pricing adopted by businesses
Pricing tactics	ways of using price as a promtional tactic usually over a short period of time
Product Life Cycle	shows the diffferent stages in the life of a product and the sales that can be expected at each stage
Product portfolio analysis	an analysis of a particualr portfolio of products which a firm is marketing
Profit Margins	profit expressed as a percentage of turnover
Promotion	an attempt to retain and obtain customers by drawing attention to a firm or its products
Promotional Mix	the mixture of promtional techniques used by a business to promote its products
Quality Assurance	a method of working for businesses that take into account customers wants and standardising quality. invloves guaranteeing that quality standards are met
Quality Control	making sure that the quality of a product meets specified quality perfomance criteria
Rate of Absenteeism	the number of staff absent as a percentage of the total number staff employeed
Rationalising	reducing the number of resources, particularly labour and capital, put into the production process, usually undertaken because a business has excess capacity
Reassuring advertising	a method used to assure consumers about their purchases and encourage them to make repeat purchases
Relationship marketing	an approach to marketing which seeks to strengthen a business's relationships with customers
Retailer	a type of business which buys goods from manufacturers and wholesalers and sells them, typically in smaller quantities
Return on Capital	the amount of profit expressed as a percentage of the capital invested in a business
Sales promotions	methods of promoting a product in the short term to give a boost to sales
Saturation	stage of the product life cycle where sales are no longer growing
Scientific management	a theory that suggests there is a 'best' way to perform work tasks
Self-actualisation	A level on Maslow's hierarchy where an employee realises his or her full potential
Span of Control	the number of subordinates working under a superior
Subcontracting	hiring or contracting another business to do work that could be done in-house by the business
Tangible benefits	benefits that can be measured
Technology	a creative process which uses human, scientific and material resources to solve problems and improve efficiency
Total quality management	a managerial approach which focuses on quality and aims to improve the effectiveness, flexibility and competitiveness of a business
Trade Credit	Gven when a supplier allows a customer to receive goods or services but pay for them at a later point in times
Training	the process of increasing the knowledge and skills of workers so they are better able to perform their jobs
USP	thenaspect or feature of the product that differentiates it from its rivals
Variance Analysis	the process of calulating variances and attempting to identify their causes
Variance	the difference between actual financial outcomes and those which were budgeted
Vendor rating	a method of measuring and evaluating the performance of suppliers
Wholesaler	a type of business which buys goods from manufactures and sells them in small quantities to retailers
Work life balance	the relationship between time spent at work and time spent away from work as a proportion of total time
Zero Budgeting	a system of budgeting where no money is allocated for costs or spending unless they can be justified by the fund holder

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