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259 Cards in this Set
- Front
- Back
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Above-the-line promotion |
a form of promotion that is undertaken by a business by paying for communication with consumers |
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Accounts payable |
value of debts and goods bought on credit payable to suppliers; a.k.a. trade payables |
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Accounts receivable |
the value of payments to be received by customers who have bought goods on credit; a.k.a. trade receivables |
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Acid-test ratio |
(current assets-inventory)/ current liabilities |
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Added value |
the difference between the cost of purchasing raw materials and the price the finished goods are sold for |
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Advertising |
paid for communication with consumers to inform and persuade |
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Articles of Association |
this document covers the internal workings and control of the business- e.g. the names of the directors and the procedures to be followed at meetings will be detailed |
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Arithmetic mean |
calculated by totalling all the results and dividing by the number of results |
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Asset |
An item of monetary value that is owned by a business |
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Asset-led marketing |
an approach to marketing that bases strategy on the firm's existing strengths and assets instead of purely on what the consumers want |
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Autocratic leadership |
A style of leadership that keeps all decision-making at the centre of the organization |
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Bad debt |
unpaid customers' bills that are now very unlikely to ever be paid |
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balance sheet |
an accounting statement that records the values of a business's assets, liabilities and shareholders' equity at one point of time |
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Bar chart |
Use bands of equal width but of varying length or height to represent relative values |
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Batch production |
producing a limited number of identical products- each item in the batch passes through one stage of production before passing on to the next stage |
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Below-the-line promotion |
promotion that is not a directly paid for means of communication, but based on short-term incentives to purchase |
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Brand |
An identifying symbol, name, image or trademark that distinguishes a product from its competitors |
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Branding |
The strategy of differentiating products from those of competitors by creating an identifiable image and clear expectations about a product |
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Break-even point of production |
the level of output at which total costs equal total revenue- neither a profit nor loss is made |
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Buffer stocks |
the minimum stocks that should be held to ensure that production could still take place should a delay in delivery occur or should production rates increase |
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Business plan |
a detailed document giving evidence about a new or existing business, and that aims to convince external lenders and inventors to extend finance to the business |
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Capital |
factor of production including all man-made resources used by a business |
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Capital employed |
the total value of all long-term finance invested in the business |
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Capital expenditure |
involves the purchase of assets that are expected to last for more than one year, such as building and machinery |
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Capital goods |
the physical goods used by industry to aid in the production of other goods and services, such as machines |
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Cash flow |
the sum of cash payments to a business(inflows) less the sum of cash payments(outflows) |
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Cash flow forecast |
estimate of a firm's future cash inflows and outflows |
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Cash flow statement |
record of the cash received by a business over a period of time and the cash outflows from the business |
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Cash inflows |
payments in cash received by the business |
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cash outflows |
payments in cash made by the business |
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Channel of distribution |
the chain of intermediaries a product passes through from producer to final consumer |
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Closed question |
question to which a limited number of pre-set answers is offered |
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Closing cash balance |
cash held at the end of the month; it becomes next month's opening balance |
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Cluster sampling |
using one or a number of specific groups to draw samples from and not selecting from the whole population; e.g. using one town or region |
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command economy |
economic resources owned, planned and controlled by public sector |
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commission |
a payment to a sales person for each sale made |
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competition-based pricing |
a firm will base its price upon the price set by its competitors |
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Consumer goods |
the physical and tangible goods sold to the general public; including durable(can be used more than once) consumer goods, such as cars and washing machines, and non-durable(can be used once) consumer goods, such as food and drinks |
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consumer markets |
markets for goods and services bought by the final use of them |
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consumer profile |
a quantified picture of consumers of a firm's products, showing proportions of age groups, income level, location, gender and social class |
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consumer services |
the non-tangible products sold to the general public(including hotel accommodation, insurance, train journeys, etc.) |
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contribution per unit |
selling price less variable cost per unit |
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contribution-cost pricing |
setting prices based on the variable costs of making a product in order to make a contribution towards fixed costs and profit |
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corporate social responsibility(CSR) |
this concept applies to those businesses that consider the interests of society by taking responsibility for the impact of their decisions and activities on customers, employees, communities and the environment |
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costs of sales |
aka cost s of goods sold; the direct costs purchasing the goods that were sold during the financial year |
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credit control |
monitoring debts to ensure that credit periods are not exceeded |
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creditors |
suppliers who have agreed to supply products on credit and who have not yet been paid |
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current assets |
assets that are likely to be turned into cash before the next balance sheet date |
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current liabilities |
debts of the business that will usually have to be paid within one year |
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current ratios |
current assets/ current liabilities |
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customer relationship marketing (CRM) |
using marketing activities to establish successful customer relationships so that existing customer loyalty can be maintained |
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debtors |
customers who have bought products on credit and will pay cash at an agreed date in the future |
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demand |
the quantity of products consumers are willing and able to buy at a certain price for a particular period of time, ceteris paribus(with other conditions remaining the same; other things being equal.) |
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Democratic leadership |
a leadership style that promotes the active participation of workers in decision making |
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direct costs |
these costs can be clearly identified with each unit of production and can be allocated to a cost centre |
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diseconomies of scale |
factors that cause average costs of production to rise when the scale of operation is increased |
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dismissal |
being dismissed or sacked from a job due to incompetence or breach of discipline |
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dividends |
the share of the profits paid to shareholders as a return for investing in the company |
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economic order quantity |
the optimum or least-cost quantity of stock to re-order taking into account the delivery costs and stock-holding costs |
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economies of scale |
reduction in a firm's average costs of production that results from an increase in the scale of operations |
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effectiveness |
meeting the objectives of the enterprise by using inputs productively to meet customers' needs |
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efficiency |
producing output at the highest ratio of output to input |
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emotional intelligence |
the ability of managers to understand their own emotions, and those of the people they work with, to achieve better business performance |
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Employment contract |
a legal document that sets out the terms and conditions governing a worker's job |
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Entrepreneur |
someone who takes the financial risk of starting and managing a new venture |
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Enterprise |
a factor of production including the driving force of a business, the risk-taking and decision-making unit of a business which organises the other three factors of production |
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Equilibrium price |
the market price that equates the supply and demand for a product |
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equity finance |
permanent finance raised by companies through the sale of shares |
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ethical code of conduct |
a document detailing a company's rules and guidelines on staff behaviour that must be followed by all employees |
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ethics |
the moral guidelines that determine decision-making |
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extension strategies |
these are marketing plans to extend the maturity stage of the product before a brand new one is needed |
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factoring |
selling of claims over sectors to a debt factor in exchange for immediate liquidity |
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fixed costs |
costs that do not vary with output in the short run |
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flexitime contract |
employment contract that allows staff to be called in at times most convenient to employers and employees, e.g. at busy times of the day |
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flow production |
producing items in a continually moving process |
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focus groups |
a group of people who are asked about their attitude towards a product, service, advertisement, or new style of packaging |
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Franchise |
a business that uses the name, logo and trading systems of an existing successful business |
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free market economy |
economic resources owned largely by the private sector with no or little state intervention |
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full-cost pricing |
setting a price by calculating a unit cost for the product(allocated fixed and variable costs) and then adding a fixed profit margin |
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Goodwill |
arises when a business is valued at or sold for more than the balance sheet value of its assets |
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Gross profit |
equal to sales revenue- cost of sales |
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gross profit margin |
(gross profit/sales revenue)x100 |
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Hard HRM |
an approach of managing staff that focuses on cutting costs e.g. temporary and part-time contracts, offering maximum flexibility but with minimum training costs |
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high-quality profit |
profit that can be repeated and sustained |
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hire purchase |
an asset is sold to a company that agrees to pay fixed repayments over an agreed time period- the asset belongs to the company |
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Histograms |
it is not the height of each bar that represents relative values, but the area of each bar |
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Holding company |
a business organization that owns and controls a number of separate businesses, but does not unite them into one unified company |
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Human resource management(HRM) |
the strategic approach to the effective management of an organisation's workers so that they help the business gain a competitive advantage |
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hygiene factors |
aspects of a worker's job that have the potential to cause dissatisfaction, such as pay, working conditions, status and over-supervision by managers |
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income statement |
records the revenue, costs and profit(or loss) of a business over a given period of time
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indirect costs |
costs that cannot be identified with a unit of production or allocated accurately to a cost center |
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induction training |
introductory training programme to familiarise new recruits with the systems used in the business and the layout of the business site |
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industrial markets |
markets for goods and services bought by businesses to be used in the production process of other products |
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informal leader |
a person who has no formal authority but has the respect of colleagues and some power over them |
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insolvent |
when a business cannot meet its short-term debts |
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intangible assets |
items of value that do not have a physical presence, such as patents and trademarks |
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integrated marketing mix |
the key marketing decisions complement each other and work together to give customers a consistent message about the product |
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Internal growth(organic growth) |
expansion of a business by means of opening new branches, shops or factories
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internet marketing |
the marketing of products over the internet |
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inter-quartile range |
the range of the middle 50% of the data |
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inventory |
stock held by the business in the form of materials, work in progress and finished goods |
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job description |
a detailed list of the key points about the job to be filled- stating all its key tasks and responsibilities |
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job enlargement |
attempting to increase the scope of a job by broadening or deepening the tasks undertaken |
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job enrichment |
aims to use the full capabilities of workers by giving them the opportunity to do more challenging and fulfilling work |
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job redesign |
involves the restructuring of a job- usually with employees' involvement and agreement- to make work more interesting, satisfying and challenging |
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job production |
producing a one-off item specially designed for the customer |
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job rotation |
increasing the flexibility of the workforce and the variety of work they do by switching from one job to another |
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joint venture |
two or more businesses agree to work closely together on a particular project and create a separate business division to do so |
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just-in-time |
this stock-control method aims to avoid holding stocks by requiring supplies to arrive just as they are needed introduction and completed products are produced to order |
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labor |
factor of production, including the workforce of a business, both skilled and unskilled |
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laissez-faire leadership |
a leadership style that leaves much of the business decision making to the workforce- a hands-off approach and the reverse of autocratic leadership |
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land |
factor of production, including all natural resources used by a business |
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lead time |
the normal time taken between ordering new stocks and their delivery |
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leadership |
the art of motivating a group of people towards reaching a common objective |
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leasing |
obtaining the use of equipment or vehicles and paying a rental or leasing charge over a fixed period. This avoids the need for the business to raise long-term capital to buy the asset. Ownership remains with the leasing company |
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liability |
a financial obligation of a business that it is required to pay in the future |
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limited liability |
the only potential loss a shareholder has if the company fails is the amount invested in the company, not the total wealth of the shareholder |
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line graphs |
most commonly used for showing changes in variables over a period of time; these are time-series graphs |
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liquidation |
when a firm ceases trading and its assets are sold for cash to pay suppliers and other creditors
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liquidity |
the ability of a firm to be able to pay its short-term debts |
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long-term bonds |
bonds issued by companies to raise debt finance, often with a fixed rate of interest |
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long-term loans |
loans that do not have to be repaid for at least one year |
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low-quality profit |
one-off profit that cannot easily be repeated or sustained |
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management by objectives (MBO) |
a method of coordinating and motivating all staff in an organisation by dividing its overall aim into specific targets for each department, manager and employee |
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manager |
responsible for setting objectives, organising resources and motivating staff so that the organisation's aims are met |
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margin of safety |
the amount by which the sales level exceeds the break-even level of output |
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marginal costs |
the extra cost of producing one more unit of output |
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market capitalization |
the total value of a company's issued shares |
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market growth |
the percentage change in the total size of a market(volume or value) over a period of time |
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market orientation |
an outward-looking approach basing product decisions on consumer demand, as established by market research |
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market research |
the process of collecting, recording and analyzing data about the consumers, competition and the market |
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market segment |
a sub-group of a whole market in which consumers have similar characteristics |
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market segmentation |
identifying different segments within a market and targeting different products or services to them |
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market share |
sales of the business as a proportion of total market sales |
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market size |
the total level of sales of all producers within a market |
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market skimming |
setting a high price for a new product when a firm has a unique or highly differentiated product with low elasticity of demand |
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marketing |
the management task that links the business to the customer by identifying and meeting the needs of customers profitably- it does this by getting the right product to the right place at the right time |
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marketing mix |
the four key decisions that must be taken in the effective marketing of a product |
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marketing objectives |
the goals set for the marketing department to help the business achieve its overall objectives |
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marketing strategy |
long-term plan established for achieving marketing objectives |
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mark-up pricing |
adding a fixed mark-up profit to the unit price of a product |
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mass customization |
the use of computer-aided production systems to produce items to meet individual customers' requirements at mass production cost levels |
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mass marketing |
selling the same products to the whole market with no attempt to target groups within it |
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median |
the value of the middle item when data have been ordered or ranked. It divides the data into two equal parts |
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Memorandum of Association |
a document stating the name of the company, the address of the head office through which it can be contacted, the maximum share capital for which the company seeks authorization and the declared aims of the business |
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mission statement |
a statement of the business' core aims, phrased in a way to motivate employees and to stimulate interest by outside groups |
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mixed economy |
economic resources are owned and controlled by both private and public sectors |
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mode |
the value that occurs frequently in a set of data |
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motivating factors |
aspects of a worker's job that can lead to positive job satisfaction, such as achievement, recognition, meaningful and interesting work and advancement at work |
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motivation |
the internal and external factors that stimulate people to take actions that lead to achieving a goal |
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multi-site location |
a business that operates from more than one location |
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multinational |
a business that operates from more than one location |
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multinational |
a business with operations and production based in more than one country |
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net monthly cash flow |
estimated difference between monthly cash inflows and outflows |
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net profit |
gross profit minus overheads |
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net profit margin |
net profit/sales revenue x100 |
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niche marketing |
identifying and exploiting a small segment of a larger market by developing products to suit it |
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non-current assets(fixed assets) |
assets to be kept and used by the business for more than one year aka fixed assets |
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non-current liabilities |
value of the debts of the business that will be payable after more than one year |
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off-the job training |
all training undertaken away from the business, e.g. work-related college courses |
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offshoring |
the relocation of a business process done in one country to the same or another company in another country |
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on-the-job training |
instructions at the place of work on how a job should be carried out |
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open questions |
those that invite a wide-ranging or imaginative response- the results will be difficult to collate and present numerically |
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opening cash balance |
cash held by the business at the start of the month |
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operational flexibility |
the ability of a business to vary both the level of production and the range of products following changes in consumer demand |
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operations planning |
preparing input resources to supply products to meet expected demand |
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opportunity cost |
the benefit of the next most desired option which is given up |
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optimal location |
a business location that gives the best combination of quantitative and qualitative factors |
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outsourcing |
not employing staff directly, but using an outside agency or organization to carry out some business function |
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overdraft |
bank agrees to a business borrowing up to an agreed limit as and when required |
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overtrading |
expanding a business rapidly without obtaining all of the necessary finance so that a cash-flow storage develops |
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partnership |
a business formed by two or more people to carry on a business together, with shared capital investment and, usually, shared responsibilities |
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part-time employment contract |
employment that is for less than the normal full working week |
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paternalistic leadership |
a leadership style based on the approach that the manager is in a better position than the worker to know what is best for the organisation |
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penetration pricing |
setting a relatively low price often supported by strong promotion in order to achieve a high volume of sales |
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performance-related pay |
a bonus scheme to rewards staff for above-average work performance |
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person specification |
a detailed list of the qualities, skills and qualifications that a successful applicant will need to have |
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personal selling |
a member of the sales staff communicated with one customer with the aim of selling the product and establishing a long-term relationship between company and consumer |
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pie chart |
used to display data that need to be presented in such a way that the proportions of the total are clearly shown |
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piece rate |
a payment to worker for each unit produced |
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price elasticity of demand |
a numerical measure showing the responsiveness of quantity demanded to a change in price |
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primary research |
the collection of first-hand data is directly related to a firm's needs |
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primary sector |
a sector of economic activity including business engaged in extraction of natural resources` |
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private limited company |
a small or medium-sized business that is owned by shareholders who are often members of the same family; cannot sell shares to the general public |
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private sector |
comprises of businesses owned and controlled by individuals or groups of individuals |
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process innovation |
the use of a new or much improved production method or service delivery method |
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product |
the end result of the production process sold on the market to satisfy a customer need |
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product differentiation |
making a product distinctive so that it stands out from competitors' products in consumers' perception |
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product orientation |
an inward-looking approach that focuses on making products-or have been made for a long time- and then trying to sell them |
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product positioning |
the pattern of sales recorded by a product from launch to withdrawal from the market |
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production |
converting inputs into outputs |
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productivity |
the ratio of outputs to inputs during production e.g. the output per worker per time period |
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profit after tax |
operating profit minus interest costs and corporation tax |
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profit sharing |
a bonus for staff based on the profits of the business- usually paid as a proportion of basic salary |
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promotion |
the use of advertising, sales promotion, personal selling, direct mail, trade fairs, sponsorship and public relations to inform consumers and persuade them to buy |
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promotion budget |
the financial amount made available by a business for spending on marketing/promotion during a certain time period |
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promotion mix |
the combination of promotional techniques that a firm uses to sell a product |
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public corporation |
a business enterprise owned and controlled by the state aka nationalised industry |
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public limited company |
a limited company, often a large business, with the legal right to sell shares to the general public-share prices are quoted on the national stock exchange |
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public relations |
the deliberate use of free publicity provided by newspapers, tv and the media to communicate with and achieve understanding by the public |
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PUBLIC SECTOR |
comprises of great organizations accountable to and controlled by central or local government |
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qualitative factors |
non-measurable factors that may influence business decisions |
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qualitative research |
research into the in-depth motivators behind the consumer buying behaviour/opiinions |
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quality circles |
voluntary groups of workers who meet regularly to discuss work-related problems and issues |
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quantitative factors |
these are measurable in financial terns and will have a direct impact on either the costs of a site or the revenues from it and its profitability |
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quantitative research |
research that leads to numerical results that can be statistically analysed |
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quota sampling |
when the population has been stratified and the interviewer selects an appropriate number of respondents in each stratum |
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random sampling |
every member of the target population has an equal chance of being selected |
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range |
the difference between the highest and lowest value |
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recruitment |
the process of identifying the need for a new employee, defining the job to be filled and the type of person needed to fill it, attracting suitable candidates for the job and selecting the best one |
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re-order quantity |
the number of units ordered each time |
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redundancy |
when a job is no longer required, so the employee doing this job becomes redundant through no fault of his or her own |
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retained profit |
the profit left after all deductions, including dividends, have been made. This is 'ploughed back into the company as a source of finance |
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revenue expenditure |
spending on all costs and assets other than fixed assets and includes wages and salaries and materials bought for stock |
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rights issue |
existing shareholders are given the right to buy additional shares at a discounted price |
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salary |
annual income that is usually paid on a monthly basis |
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sales promotion |
incentives such as special offers or special deals directed at consumers or retailers to achieve short-term sales increases and repeat purchases by consumers |
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sales turnover(sales revenue) |
the total value of sales made by a business in a given time period aka sales revenue selling price x quantity sold |
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sample |
the group of people taking part in a market research survey selected to be representative of the overall target market |
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scale of operation |
the maximum output that can be achieved using the available inputs(resources)- this scale can only be increased in the long term by employing more of all inputs |
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secondary research |
collection of data from second-hand sources |
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secondary sector |
a sector of economic activity where resources extracted by primary sector businesses are processed and manufactured into final goods |
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self-actualization |
a sense of self-fulfillment reached by feeling enriched and developed by what one has learned and achieved |
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share |
a certificate confirming part ownership of a company and entitling the shareholder owner dividends and certain shareholder rights |
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share capital |
the total value of capital raised from shareholders by the issue of shares |
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shareholder |
a person or institution owning shares in a limited company |
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shareholders' equity |
total value of capital raised from shareholders by the issue of shares |
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social audit |
a report on the impact a business has on society(it could lower pollution levels, health and safety record, source of supplies, customer satisfaction and contribution to the community) |
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social enterprise |
a business with mainly social objectives that reinvests most of its profits into benefiting society rather than maximizing returns to owners |
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societal marketing |
this approach considers not only the demands for consumers but also the effects on all members of the public(society) involved in some way when firms meet these demands |
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soft HRM |
an approach to managing staff that focuses on developing staff so they reach self-fulfillment and are motivated to work hard and stay with the business |
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sole trader |
a business in which one person provides the permanent finance and , in return, has full control of the business and is able to keep all of the profits |
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sponsorship |
payment by a company to the organizers of an event so that the company name becomes associated with the event |
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staff appraisal |
the process of assessing the effectiveness of an employee judged against pre-set objectives |
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stakeholder |
people or groups of people who can be affected by, and therefore have an interest in any action by an organization |
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stakeholder concept |
the view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders |
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start-up capital |
capital needed by an entrepreneur to set up a business |
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stock |
materials and goods required to allow for the production and supply of products to the customer |
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stratified sampling |
this draws a sample from a specified sub-group or segment of the population and uses random sampling to select an appropriate number from each stratum |
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supply |
the quantity of products producers are willing and able to sell at a certain price for a particular period of time, ceteris paribus |
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systematic sampling |
every nth term in the target population is selected |
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target pricing |
setting a price that will give a required rate of return at a certain level of output/sales |
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teleworking |
staff working from home but keeping contact with the office by means of modern IT communications |
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temporary employment contract |
employment contract that lasts for a fixed time period, e.g. six months |
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tertiary sector |
a sector of economic activity including businesses engaged in providing services to customers |
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team working |
production is organized so that groups of workers undertake complete units of work |
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trade barriers |
taxes(tariffs) or other limitations on the free international movement of goods and services |
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training |
work-related education to increase workforce skills and efficieny |
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triple bottom line |
the three objectives of social enterprise (economic, social, and environmental) |
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unfair dismissal |
ending a worker's employment contract for a reason that the law regards as being unfair |
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unique selling point(USP) |
the special feature of a product that differentiates it from competitors' products |
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variable costs |
costs that vary with a change in ouput |
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venture capital |
risk capital invested in business start-ups or expanding small businesses that have good profit potential but do not find it easy to gain finance from other sources |
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viral marketing |
the use of social networking sites or SMS text messages to increase brand awareness or sell products |
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window dressing |
presenting the company accounts in favourable light- to flatter the business performance |
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worker participation |
workers are actively encouraged to become involved in devision making within the organization |
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workforce audit |
a check on the skills and qualifications of all existing managers/employees |
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workforce planning |
analyzing and forecasting the numbers of workers and the skills of those workers that will be required by the organization to achieve its objectives |
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working capital |
the capital needed to pay for day-to-day running costs and credit offered to customers. It is equal to current assets minus current liabilities |
