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34 Cards in this Set

  • Front
  • Back
  • 3rd side (hint)

Why is a business plan useful?

1 - To evaluate a business idea

2 - To plan what the business will do and how it will do it

3 - To look at potential problems and solve them before they arise

4 - To demonstrate to third parties that the business is feasible (e.g. to secure investment/bank loan)

4 points

What should be included in a business plan?

1 - The business idea

2 - The people running the business

3 - Market research results

4 - Marketing - 4P's - Place, Product, Promotion, Price

5 - Production

6 - Finance

6 points

What is the purpose of a business plan?

1 - To determine whether the business should go ahead or not?

2 - To secure financing/funding

3 - To set measurable targets

4 - To create the basis of a more detailed step-by step plan to start conducting business

4 points

What is a consumer?

A customer

Someone who consumes goods, products or services

Consume = to use up e.g. Toothpaste




Consume = to use up e.g. Toothpaste

What is consumer income?

The money that the consumer receives from work or another source (e.g. rich parents / lottery win / trust fund etc)

income $££$$$$

What type of business is more likely to succeed in a high income area?

Businesses selling luxury goods or services

e.g. 5* Hotel


Ferrari garage

Designer clothes shops

What type of business is more likely to succeed in a low income area?

Businesses selling budget brands and offering value for money

e.g. LIDL / ALDI and other budget supermarkets

How do transport links affect businesses?

Transport links ensure that:

> Consumers can get there

> Employees can get there

> Suppliers can get there

Therefore a business needs to know who their consumers, employees and suppliers are likely to be when they are making the decision of where to locate.

What does employed mean?

A person who has a job is employed

What does unemployed mean?

A person who does not have a job is unemployed

What are the three employment sectors?

1 - Primary

2 - Secondary

3 - Tertiary

If someone is employed in the primary sector what does this mean?

They work with raw materials (e.g. Wood, coal and oil)

If someone is employed in the secondary sector what does this mean?

They make products from the raw materials

(e.g. carpet, chewing gum, desks)

If someone is employed in the tertiary sector what does this mean?

They sell products or services

(e.g. Day nursery, vets, shoe shop)

What is a product oriented business?

Where a business makes a product and hopes to sell it without first analysing the market


e.g. Henry Ford - the model T

Where a business makes a product and hopes to sell it without first analysing the market

e.g. Henry Ford - the model T

What is a market oriented business?

Where a business analyses the market and consumer's needs for a product before starting production (or providing the service)

What are market segments?

How the market for a product or service is divided - for example, by age, gender etc...

What is disposable income?

The amount of money a consumer has to spend after paying essential bills (e.g. rent, electric, insurance, gas bill etc)

What is a test market?

What a business tests its product in order to see whether consumers will buy it.

What are socio-economic groups?

A method of dividing up the population based on the occupation of the head of the household

What is a population?

The total number of people:

- in a country

- in a market

- in any other type of grouping

What is a niche market?

A small market for a specialised product

Give an example of a niche market

- Handmade clothes

- Personalised holidays/tours

- Diving equipment shop

What are the main socio-economic groups and the job-types associated with them?

A - Doctors, judges, company directors of large businesses

B - Teachers, department managers, solicitors

C1 - Supervisors, clerical workers, sales assistants

C2 - Skilled manual workers - plumbers, electricians

D - Semi-skilled workers - assembly line workers, cleaners

E - Unemployed, casual workers, state pensioners

Are most businesses product oriented or market oriented? Explain your answer (WHY)

Market-oriented; because there is so much choice for modern consumers that your business must understand what they want (i.e. be market oriented) in order to succeed

What is a mass market? Give an example of a mass market product.

Mass market is a product or service targeted at everyone, regardless of their gender, disposable income, socio-economic group etc.

E.g. Cinema, Toothpaste, Breakfast cereal, Books

What is market research?

Market research is how businesses collect information on whether their products or services will be bought.

What type of information is collected as part of market research?

- Whether customers will buy the product or service

- How often customers will buy the product or service

- The price that customer are willing to pay

- The type of customers interested in the product

- Where the product should be sold

What are the two main methods of market research?

Primary & Secondary

What is primary research?

Primary research means collecting information first hand. This means that the business designs and collects the information itself, or perhaps pays a research organisation to collect the information for it.

What methods could be used to collect primary research information?

- Surveys

- Consumer panels (or focus groups)

- Testing and observing

What are the advantages of conducting surveys?

1 - The questions can be designed to provide the specific information that the business requires

2 - When an interview technique is used, the person asking the question can explain any questions that the peron being asked does not understand

3 - The correct amount of information can be collected when interviews are used (e.g. if a business requires the opinions of 1000 consumers, then it can make sure that 1000 interviews take place)

What are the disadvantages of using surveys?

1 - The questions must be clear, otherwise the customers might misinterpret them

2 - The interviewer has to be careful not to influence the way that the interviewee answers the question

3 - Collection information by using surveys takes time and is expensive

4 - It may be difficult to get people to take part in surveys

4 points

What is a consumer panel?

A consumer panel is a group of consumers who are regularly questioned about test products and services. Because they are already used to the idea of market research they can give clear and detailed information that a business can use.