Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
43 Cards in this Set
- Front
- Back
|
Cash budget benefits |
businesses will be able to see where problems in cash flowwill arise for example if there is likely to be a shortage of cash one monththen an overdraft can be arranged in advanced . decisions can be taken about the best time to make a bigoutlay of cash-for example, to purchase machinery or equipment |
|
|
Employment legalisation |
equality act 2010 -covers individuals at work and when using services such asshops, hotels, gyms, hospitals and other free services. The act protects peoplefrom being discriminated against because of their; age, disability, gender, marriageor civil partnership, pregnancy or maternity, race, religion, sex and sexualorientation. |
|
|
Employment legalisation
|
Health and safety at work act 1974 -employers must provide and maintain a suitable working environment -provide staff with training and safety information -staff must not tamper with or misuse equipment |
|
|
why businesses need finance
|
inorder to start up the business itself as finance is needed to buy premises andmachinery etc. alsoneeded for day to day business activities such as buying in stock fromsuppliers and paying employees wages. startexpansion/growth. Finance is also required to carry out research into newproducts and services such as market research. needs finance to deal with external factors (pestec) forexample if the economy is in recession then a business will need additionalfinance to cope with the fall in normal sales levels. |
|
|
Ways a business can get short term finance/sources of finance |
grant; this is money given to a business by central or localgovernment, princes trust or the EU etc for things such as the purchasing ornew machinery and training of staff. Grants don’t have to be paid back and areoften used to persuade businesses to move into areas of high unemployment.However grants can be complicated to apply for and many conditions are oftenrequired to be met. |
|
|
Ways a business can get short term finance/sources of finance |
Retained profits- can be used to buy more stock or takeadvantage of bulk buying which could increase future profits. However when abusiness too often relies on retained profits it means there is less money tobe spent on growing and expanding at a good rate. |
|
|
medium term finance
|
bank loan- +has to be paid back in fixed monthly instalments which means that businesses can budget for monthly payments +business is able to purchase essential machinery or equipment straightaway -interest has to be paid in addition to the loan -hard for small businesses to convince lenders to give them a loan |
|
|
medium term finance
|
hire purchase +allows businesses to purchase expensive equipment with only and initial deposit -interest rates can be high -business doesn't legally own the asset until the last hire purchase statement has been made |
|
|
what are fixed costs
|
costs that don't change along with the level of production. for example rent, insurance and loan interest.
|
|
|
what are variable costs
|
costs that change with the level of production . for example raw materials and electricity.
|
|
|
what are total costs
|
total costs are simply fixed costs and variable costs added together.
|
|
|
purpose of break-even analysis
|
is producing or selling a certain product going to be profitable how many units of a product would have to be sold before any profit was made what will the profit be at various levels of output |
|
|
how to know when you break even
|
when the total costs=total revenue (when no profit or loss is made) |
|
|
how to calculate the gross profit?
|
the cost of goods is subtracted from sales
|
|
|
how are profits used
|
in a partnership- profits are distributed amongst the partners in a ratio agreed when the business was set up sole trader- once tax is paid they keep all their profit public limited company- the board of directors decide what percentage of profits will be distributed as a dividend to each shareholder most businesses likely to retain some profit as a safeguard against possible future poor profits or even losses. |
|
|
the importance of marketing
|
- help raise the organisations profile and image in the market -target new customers -retain existing customers -help business identify changes in tastes in the market -increase profits and market share |
|
|
market segmentation involves splitting up consumers into different groups and then marketing a product/service directly towards those groups. identify those groups
|
social class family lifestyle age income occupation gender geographical location religion |
|
|
what does market segmentation help an organisation to do
|
the organisation can develop products that meet the needs of specific consumers appropriate prices can be set which specific consumers can afford to pay but still allow the organisation to make a profit appropriate promotions and advertising can be developed to target specific consumers ensures that products and services are sold in the appropriate location/places for the targeted cutomers |
|
|
what is differentiated marketing
|
involves targeting each market segment with a product or service specifically designed to match the needs of those consumers within the segment
|
|
|
undifferentiated marketing
|
involves selling products to the whole market. for example tvs.
|
|
|
advantages of desk research
|
information is usually easy to obtain because someone or some organisation has already carried out the research much cheaper than carrying out field research organisation can react to market changes quickly because the information is readily available . |
|
|
disadvantages of desk research
|
information not as reliable as information obtained in field research due to the fact that the research was probably gathered for a different purpose or organisation information could be out of date so may not be relevant to current market if information is inaccurate or biased it could lead to wrong decisions being made |
|
|
advantages of field research
|
information can be gathered for a specific purpose information is relevant research can focus specifically on what the organisation wants to find out up to date |
|
|
disadvantages of field research
|
can be very costly to set up can take a long time and expense to train interviewers a wide audience have to be surveyed if findings are to be realistic the way questions are worded or asked can influence peoples responses |
|
|
methods of field research
|
personal interview telephone survey postal survey online survey focus group hall test observation epos sampling |
|
|
what is the marketing mix
|
product price place promotion |
|
|
describe the marketing mix
|
product- the product/service that the customer purchases price- the actual amount set by the seller and paid by the customer to the seller place- where the customer buys the product/service promotion- the way in which a customer is made aware of a product/service and is persuaded to buy it. |
|
|
branding
|
a brand is a name, symbol, design that the producer uses to make the product instantly recognisable
|
|
|
advantages of successful branding
|
-can save money on marketing once the product becomes a household name -higher prices can be charged when consumers become loyal to the brand -its easier to launch new products or new versions of products with the same brand name |
|
|
what are the stages of the product life cycle
|
introduction>growth>maturity>decline |
|
|
what happens during introduction
|
sales are slow and profits will be negative
|
|
|
what happens during growth
|
sales increase rapidly. profits will reach their highest point at the end of this stage
|
|
|
what happens during maturity
|
sales reach their highest point. profits will begin to fall as competition increases
|
|
|
what happens during decline
|
sales are falling. profits continue to fall and may become negative.
|
|
|
new product development
|
-identify a gap in the market -carry out market research to identify a list of new potential profits |
|
|
things to factor in when thinking about price
|
price charged by competitors ? the time of the year (if the product is seasonal) where is the product sold ( businesses usually lower prices if consumers buy on the internet) the market segment the product is aimed at |
|
|
pricing strategies; penetration pricing
|
penetration pricing -when a firm is entering a market where there are lots of competitors selling similar products they may set a very low price until it becomes popular with consumers and at this stage will raise their prices
|
|
|
destroyer pricing?
|
is used to eliminate competition. this is when prices are lowered to such a degree that some competitors cannot compete and are forced to leave the market. once competitor is out of the market the dominant firm raises its prices again.
|
|
|
promotional pricing
|
prices reduced for a short time to shift goods off shelves that aren't selling as fast as the business would want them to
|
|
|
competitive pricing
|
when firms agree not to compete on price to stop a price war. so businesses in the market end up charging the same or similar prices .
|
|
|
premium pricing
|
when high prices for a product are set and kept to create a high class image.
|
|
|
market skimming
|
when a business puts a new product on the market at a high price. the business aims to make a really high profit to cover the costs of researching and designing the product
|
|
|
done
|
yh
|
