Theme 1 Collection Flashcards

Question

1.2.3 - What are market segments?

Answer 1

Part of a market that groups buyers with similar buying habits, such as: * Location * Demographic * Age * Income * Lifestyle

Answer 2

A market map is a four quadrant map based on two features of a product (e.g. high/low price and high/low quality) to allow a business to identify a gap in the market

Answer 3

* Price (Are their prices in a similar competitive range) * Product range * Quality (Are they delivering quality similar/ better) * Customer service * Location (Are they closer to their target market)

Answer 4

A SWOT analysis (Strengths, Weaknessess, Opportunites, Threats)

Answer 5

Targets expressed in money terms such as making a profit, earning income or building wealth: * Survival * Profit * Wealth * Income * Financial Security * Market Share

Answer 6

Targets that are not expressed in money terms: * Personal Satisfaction * Challenge * Independence * Control * Helping Others

Answer 7

Sales Revenue – Total Cost

Answer 8

Selling Price x Sales Volume

Answer 9

Fixed Cost + Variable Cost

Answer 10

Cost per Unit x Sales Volume

Answer 11

Interest = (Total Repayment – Borrowed Amount) ÷ (Borrowed Amount) x 100

Answer 12

The level of output where total revenues are equal to total costs; this is where neither a profit or loss is being made: Fixed costs ÷ Sales price - Variable cost per unit

Answer 13

The amount of output between the actual level of output where profit is being made and the break even level of output.

Answer 14

1. It becomes larger (further along on a chart) 2. It becomes smaller (Closer on a chart)

Answer 15

* The movement of money into and out of the business. * Cash is used to pay the day-to-day expenses of a business.

Answer 16

* To pay its expenses (Suppliers overheads employess etc.) * The prevent business failure (insolvency)

Answer 17

Total cash flow in - Total cash flow out

Answer 18

* LT: Sources of money for businesses that are borrowed or invested typically for more than a year. * ST: Sources of money for businesses that may have to be repaid either immediately or fairly quickly, such as an overdraft, usually within a year.

Answer 19

* Borrowing money from a bank by drawing more money than is actually in your account. * Interest is charged on the amount overdrawn.

Answer 20

* Negotiating with suppliers a period of time before goods and services that have been purchased have to be paid for. * This is usually 30 days credit.

Answer 21

* A factor (financial company) buys a debt from a business and pays the business typically 90% of the value of this debt. * Therefore the business gets paid immediately. * The factor charges a fee for this.

Answer 22

* Venture capital * Share capital * Loans * Crowdfunding * Leasing (renting out)

Answer 23

* SC: The monetary value of a company which belongs to its shareholders. * VC: An individual or company which buys shares in what they hope will be a fast growing company with a long-term view of selling the shares at a profit.

Answer 24

Obtaining external finance from many individual, small investments, usually through a web-based appeal.

Answer 25

* In unlimited liability, there is no distinction between the business and the owner and so any debts that the business owes have to be payed off by the owner's personal assets. * In limited liability, the business and the shareholders that own it are distinct and so any debts cna only only be taken form the business.

Answer 26

* ST: The only owner of a business which has unlimited liability. Their accounts do not have to be published publicly. * P: Where two or more individuals run a continuing business for profit. ST have more privacy control and profit but P can share responsibility and risk

Answer 27

It is either a PLC or LTD, has limited liability and have to publish their accounts publicly. **Pros**: * They have limited liability * Reduced risk * Increased capital * Increased status means they're more likely to be approved for loans etc. **Cons**: * Desicions can be limited as company ia owned by many people * Profit may be the only goal * Other people can buy more shares and take over

Answer 28

The right given by one business to another to sell goods or services using its name.

Answer 29

The business that gives franchisees the right to sell its product, in return for a fixed sum of money or a royalty payment: **Pros**: * Growth * Profit * Customer Awareness * Long Term Income **Cons**: * Changing Demands * Brand Image * Poor Performance

Answer 30

A person or company that is granted a license to do business under the franchisor's trademark. The franchisee purchases a franchise from the franchisor: **Pros**: * Training * Equipment * Materials * Back Up Services * Brand Name * Exclusive Area **Cons**: * Royalty Fee * Franchise Fee * Lack of Flexibility * Long Term Costs

Answer 31

* Target market and demographics ( so that there will be sufficient people interested in your business) * Labour (So that you have workers who are able to commute and won't loose out on your workforce) * Materials (Your product needs be easily manufacturable) * Competitors (You may want to be close as it means a similar target market will be nearby. You may want to be far away as they can steal your customers)

Answer 32

Businesses in the tertiary sector will require to be in city centres as they provide services that may require to be in locations convenient for customers. In the primary sector, you location may be in rural area as land is cheap and you don't need to be close to your customers.

Answer 33

**Pros**: * Reach a larger market of customers * Less overhead fees (electricity rent etc.) * Less workers to pay **Cons**: * Customers may be wary of paying online * Tecnological failures can limit businesses * Technology may not always be user friendly

Answer 34

* Price * Place * Product * Promotion

Answer 35

* E-commerce: Being able to use the internet as a place for selling items * Digital communication: Promoting you product to potential customers online

Answer 36

A plan for the development of a business identifying things such as: * Business idea * Business aims/objectives * Market research * Forecast revenue * Costs and profits * Cash flow forcast * Sources of finance * The marketing mix

Answer 37

* To think about all aspects of the business. * To reduce risk of failure * To interest potential investors and bank loans

Answer 38

A business stakeholder is a person or organisation that has an interest in a business. Stakeholders have an interest in how the business operates and whether or not it is successful. These can include: * Owner * Managers * Employees * Suppliers * Pressure groups * The government * Customers/consumers * Shareholders

Answer 39

* Owners: Main goal is profit * Employees: Main goal is job security and promotions * Managers: Main goal is extra manager promotions

Answer 40

* Suppliers: To receive payment from the business * Customers: For the product to be cheap and available * Shareholders: To receive dividends from their shares * Local community: No pollution from the business * The government: To receive taxes from the business * Pressure groups: For the business to be ethical

Answer 41

* They have differing interests * The owner wants high profits and so requires a low cost * The supplier wants more money and so wants to charge more

Answer 42

* E-commerce: Selling online * Digital communication: Communicating digitally I guess? * Social media: Social accounts online * Payment systems: Systems such as paypal that guarantee security for the customer

Answer 43

Sales: * Will increase as social media means more promotion, * Payment systems means customers trust the business more, * Digital communication means better reputation, * E-commerce allows the business to reach more potential customers Costs: * May originally be higher during installation, however usage of technology in place of employees reduces this cost. * Payment systems take a small percentage of the slaes price as a fee for the business

Answer 44

* As described: The goods supplied must match any description or samples shown to you at the time of purchase. * Fit for purpose: The goods should be fit for the purpose they are supplied for/specific purpose you made known to the retailer at time of purchase * Of satisfactory quality: Goods shouldn't be faulty or damaged when you receive them, and should last for a reasonable amount of time

Answer 45

**Pros**: * Reach more customers as you are online * Use traffic data for market research **Cons**: * Costs to produce website * Customers can easily compare prices meaning they may choose other businesses over you

Answer 46

* Recruitment: no discrimination in this process on age, race, gender, religion etc. * The national minimum wage: The minimum amount workers are required to be payed. (£7.20/h 25+ on 4/18) * Health and safety: A right to work in places where risks to their health and safety are controlled properly and employers who are responsible.

Answer 47

Legislation requires businesses to: * Training staff * Protection equipment for staff e.g. hairnets or googles * Cost of paying NMW These cost higher amounts reducing their profit

Answer 48

* Fines * Imprisonment * Disqualification

Answer 49

* An increase in unemployment would lead to less disposable money for the general public * This means businesses will have to provide more cheap products to meet the customer needs * There will be a wider-range of people to recruit * Luxury good retailers will suffer

Answer 50

* Lower consumer income will mean there are less purchases of luxury products (More needs rather than wants) * Businesses will have to adapt to provide products that meet lower costs and may reduce quality as a lower one is demanded

Answer 51

* If inflation goes up, consumers will feel poorer and reduce their spending, reducing business revenue. * Inflation aims to be around 2% in the uk

Answer 52

* A weaker pound will mean that a businesses pay more for supplies from foreign countries (Higher exports lower imports) * A stronger pound means businesses will pay less for supplies from foreign countries (HIgher imports lower exports) * The pound being stronger means it has more worth. For example a the pound is stronger when £1 = €2 than when £1 = €1.50

Answer 53

* If a business earns more than £83,000 a year they must register for tax * An increase in government tax, will lead to higher costs for the business, reducing profits

Answer 54

* A rise in interest rates would mean that the cost of borrowing will rise and cost of supplies will be higher and customer spending will be lower. * Businesses will loose out on profit

Answer 55

* Reactive is responding to a situation * Proactive is being preapred for possible situations * Businesses should aim to be proactive

Theme 1 Collection Flashcards

Theme 1. 1 - 5 Theme 2. 1 - 3 (79 cards)