Theme 1 Key terms

Sub
Key term Definition Theme
theme
A symbol, logo or design that is recognisable and distinguishes
Brand 1 1.1.1
a product from competitors
The rivalry among sellers trying to achieve goals such as
Competition 1 1.1.1
increasing profits, market share, and sales volume
Competitive
When there are many rivals selling similar products 1 1.1.1
market
A rival business operating in the same market offering similar
Competitor 1 1.1.1
goods or services/an appropriate
Direct Businesses produce similar products that appeal the same
1 1.1.1
competition group of customers
Dynamic market A market that is subject to rapid/continuous change. 1 1.1.1
Different businesses make or sell products that are not in direct
Indirect
competition but compete for the same customer experience e.g. 1 1.1.1
competition
Netflix and the local cinema
The creation, development and implementation of a new
Innovation 1 1.1.1
product, process or service.
Market Where buyers and sellers interact 1 1.1.1
Market growth An increase in demand/sales for a particular product/service 1 1.1.1
The % of the total market a business has in terms of volume or
Market share 1 1.1.1
value
The total amount of sales/customers in a market measured by
Market size 1 1.1.1
value/volume
A large unsegmented market where mass appeal products are
Mass market 1 1.1.1
on sale
A specialist area of the market/is a subset of the market on
Niche market which a specific product focuses. It is a smaller segment of a 1 1.1.1
larger market where consumers have specific needs and wants.
Online retailing Selling goods and services on the internet 1 1.1.1
Product
The development/creation of products not previously available 1 1.1.1
innovation
The quantity of a good or service sold within a period of time.
Sales volume 1 1.1.1
Calculation Sales revenue/selling price
The inability to predict/a lack of knowledge about future events
and outcomes/reasons for uncertainty. Is caused by unexpected
Uncertainty 1 1.1.1
often external factors outside the businesses control, even
though sometimes these can be predictable
Biased Where the findings do not give a true reflection of the views of
1 1.1.2
questions the target audience on the product or service
Consumer Observes how consumers make decisions about how they
1 1.1.2
behaviour choose and use products or services
An organised collection of data stored electronically with instant
Databases 1 1.1.2
access, searching and sorting facilities
Face-to-face A research method used where the interviewer communicates
1 1.1.2
survey directly with the respondent using a questionnaire.
A group of people who participate in a discussion as part of
Focus group 1 1.1.2
market research to give feedback about a product or service
Government Government publications that a business can use such as the
1 1.1.2
data census of the population
Where the opinion of the interviewer interferes with the
Interview bias 1 1.1.2
judgements of the interviewee
Market When a businesses products/services are based around the
1 1.1.2
orientation needs and wants of the customer.
A document that contains information, stats, research and facts
Market reports 1 1.1.2
on a chosen field

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 Gathering, presenting and analysing information about
Market research 1 1.1.2
products/customers
Market Dividiing a whole market into particular customer groups that
1 1.1.2
segmentation have similar characteristics
Market An identifiable group of individuals/a part of the market where
1 1.1.2
segments consumers share one or more characteristic or need
Observations Where market researchers watch the behaviour of customers 1 1.1.2
Primary market Obtaining data first hand by the business to match the specific
1 1.1.2
research needs of the business. It can also be known as field research
When a business prioritises a products design quality or
Product
performance rather than meeting customer preferences to guide 1 1.1.2
orientation
production and marketing decisions
Qualitative Market research collected relating to the opinions and beliefs of
1 1.1.2
research consumers . Data not presented numerically.
Quantitative Numerical information gathered and can be presented and
1 1.1.2
research data analysed using graphs, charts, table etc
Respondent When respondents respond inaccurately to a question for some
1 1.1.2
bias reason
A small group of people who must represent a proportion of a
Sample 1 1.1.2
total market when carrying out market research
Secondary Data collected by another business or organisation but used by
1 1.1.2
market research the business in question. Also known as desk research
Dividing the market into groups of people with similar attributes
Segmentation 1 1.1.2
or common characteristics
Social A platform such as Facebook, X and YouTube to market a
1 1.1.2
networking businesses products/services
Survey A method of (primary) research used to collect information 1 1.1.2
Trialling the product in a small area or to a limited number of
Test marketing 1 1.1.2
users to assess the suitability of a product
Trade Specialist magazines that look at current trends in the business
1 1.1.2
publications world
The increase in value that a business creates when producing a
Added value product/service. The difference between the price the customer 1 1.1.3
pays and the total cost of inputs needed to create a product
Competitive A feature of a business and/or its products that enable it to
1 1.1.3
advantage compete effectively with rival producers/products.
Making products or services different or distinct from competing
Differentiation 1 1.1.3
products/creating a USP
A form of market positioning. It is the use of a 2-dimensional
Market mapping diagram that plots products or services in a market using two 1 1.1.3
key variables. It is used to spot a gap in the market
Market An effort to influence consumer perception of a brand or product,
1 1.1.3
positioning relative to the perception of competing brands or products
Product The act of distinguishing a product/service from competitors to
1 1.1.3
differentiation make it more attractive to a particular target market
Complementary Products consumed/used together, so they are purchased
1 1.2.1
goods together
Consumer
The money earned/received from work/investments 1 1.2.1
income
The quantity of goods/services that a consumer is willing to buy
Demand 1 1.2.1
at a given price and at a given time
The structure of the population such as age, gender and
Demographics 1 1.2.1
geographical distribution
External shocks Factors beyond the control of a business 1 1.2.1
When demand rises or falls at particular times of the year
Seasonality 1 1.2.1
according to seasonal factors
Goods that can be bought as an alternative to others, but
Substitutes 1 1.2.1
perform the same function

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Government A payment given to producers, usually to encourage production
1 1.2.2
subsidies of a certain good
Taxes imposed by the government on spending e.g. VAT and
Indirect taxes 1 1.2.2
Excise duties. Responsibility for payment lies with the business.
The amount that producers are willing/able to produce at a given
Supply 1 1.2.2
price/over a given period of time
Equilibrium The price where supply and demand are equal. Also known as
1 1.2.3
price market clearing price
Non price Factors other than price e.g. Change in consumer incomes,
1 1.2.3
factors advertising and seasonality
Shortage in
Where demand exceeds supply 1 1.2.3
markets
Surplus in
Where supply exceeds demand 1 1.2.3
markets
Goods that consumers like to buy if they can afford them eg air
Luxury 1 1.2.4
travel and fashion items
Basic goods that consumers need to buy eg food, electricty and
Necessity 1 1.2.4
water
Price elastic Demand is responsive to a change in price 1 1.2.4
Price elasticity
Measures the responsiveness of demand to a change in price.
of demand 1 1.2.4
Always negative due to laws of demand.
(PED)
Demand for the product is less responsive proportionately to a
Price Inelastic 1 1.2.4
change in price
Income
Measures the responsiveness of changes in demand to changes
elasticity of 1 1.2.5
in consumer income
demand (YED)
When incomes increase there is a decrease in demand eg
Inferior good 1 1.2.5
budget goods
A plan for using the right blend of product, price, promotion, and
Marketing mix 1 1.3
place in order to maximise sales
Changing patterns in consumer behaviour reflected in changing
Social trends demands e.g. increased use of social media/being 1 1.3
environmentally friendly
Aesthetics Relates to the appearance of a product 1 1.3.1
Cost (design When the business focusses on being economically viable,
1 1.3.1
mix) therefore they aim to minimise costs
Design for Producing products using materials that have been discarded as
1 1.3.1
recycling waste and recycled
When materials used in the initial product are utilised again in
Design for reuse 1 1.3.1
the future beyond their initial intended use.
Design for
Reducing the quantity of resources that are discarded in the
waste 1 1.3.1
production process
minimisation
The combination of factors needed in designing a product and
Design Mix 1 1.3.1
include Aesthetics, Function, Economic Manufacture
When a business buys materials that are produced with fair
Ethical sourcing 1 1.3.1
working conditions/pay and minimum impact on the environment
Function Relates to the quality and reliability of a product. 1 1.3.1
A marketing strategy in which a new name, term, symbol, design
or combination is created for an established brand with the
Re Branding 1 1.3.1
intention of developing a new, differentiated identity in the minds
of consumers, investors, and/or competitors.
Resource
The using up of natural resources 1 1.3.1
depletion
A paid form of communication, used by a business to raise
Advertising customer awareness of its products, services and brands, to 1 1.3.2
persuade purchases to be made

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Customer Repeat purchases with the same business/favour it over
1 1.3.2
loyalty competitors in the same market.
Digital
The electronic transfer of data 1 1.3.2
communications
Direct marketing Where a business mail out leaflets or letters to households 1 1.3.2
Emotional The creation of brands that perhaps appeal to customers’
1 1.3.2
branding emotional nature, rather than their logical side.
Manufacture/cor Brands created by the producers of goods and services eg
1 1.3.2
porate branding Kellogg’s cornflakes (bear the producers name)
Products that are manufactured for wholesalers or retailers by
Own brand 1 1.3.2
other businesses e.g. Tesco Beans
Personal selling Direct communication between a salesperson and the customer 1 1.3.2
Charging a higher price than competitors because of customer
Premium price 1 1.3.2
loyalty that has been built up over a period of time
Product
Products that only contain the name of the product category
branding/Generi 1 1.3.2
rather than the company or product name e.g. Carrots
c branding
The way a business creates demand/awareness for their
Promotion 1 1.3.2
product/service.
An organisations attempt to communicate with interested
Public relations parties, usually through unpaid media such as press 1 1.3.2
conferences
Sales
Methods of promoting products in the short term to boost sales 1 1.3.2
promotions
Websites and applications that enable users to participate in
Social media 1 1.3.2
social networking.
A company giving a product or money to support another
Sponsorship 1 1.3.2
business or person
USP A feature that differentiates a product from its competitors 1 1.3.2
Encouraging customers to share information/adverts through
Viral marketing 1 1.3.2
existing social media platforms e.g. Facebook
Competitive When a business sets a price similar to competitors selling
1 1.3.3
pricing similar/rival products
A cost-based method for setting the prices of goods and
Cost plus
services and is calculated by adding a mark-up percentage to 1 1.3.3
pricing
the cost of the product
Setting a low price initially and accepting limited short-term
Penetration
profits/losses in order to build market share before switching to a 1 1.3.3
pricing
more profitable price
Predatory Setting a low-price forcing rivals out of the market. This is illegal
1 1.3.3
pricing in the UK
Price
A website that compares the price of a particular product or
comparison 1 1.3.3
service in different stores or from different businesses
websites
Setting a high price at the launch of a product, to gain the money
Price skimming back from R&D and to take advantage of those wanting to be 1 1.3.3
the first people to purchase.
A method used by a business when deciding the price at which
Pricing strategy 1 1.3.3
a product is sold for
Psychological Tactics that are designed to appeal to a customer’s emotional
1 1.3.3
pricing response to prices
Methods used by businesses to get their products from
Channels of
manufacture to consumer. It can include intermediaries such as 1 1.3.4
distribution
wholesalers and retailers.
Getting products to the right place for customers and at the right
Distribution 1 1.3.4
time
Distribution The methods by which a product gets from the manufacturer to
1 1.3.4
channels the consumer

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Distribution
A plan to get a product or service to the customer 1 1.3.4
strategy
Four stage
Manufacturer/producer to wholesaler to retailer, then consumer.
distribution 1 1.3.4
Examples include groceries and confectionery
channel
Online
distribution/E- The use of electronic systems to sell goods and services 1 1.3.4
commerce
Where the product can be purchased and is also the process of
Place 1 1.3.4
making a product or service available to the consumer
Product A tangible item offered for sale 1 1.3.4
The non-physical, intangible parts of our economy, as apposed
Service 1 1.3.4
to goods, which we can touch
Three stage
Manufacturer/producer to retailer, then consumer. Examples
distribution 1 1.3.4
include electrical goods and cars.
channel
Two stage
A direct marketing approach with no intermediary levels e.g.
distribution 1 1.3.4
Manufacturer/producer to consumer
channel
A method used to analyse the product portfolio of a business
Boston matrix 1 1.3.5
that contains stars, Cash cow, question mark and dog
Business to When a business promotes the sale of products/services to
1 1.3.5
business (B2B) other businesses for use in their operations
Business to Where a company targets to sell its products to individual
1 1.3.5
customer (B2C) customers
A preference for a product or brand based on experience and/or
Consumer
an emotional attachment, which inclines buyers to repeat 1 1.3.5
loyalty
purchases and away from rivals
Extension A plan that is aimed at preventing the decline stage of a
1 1.3.5
strategy product/service’s sales in the medium-to-long term
Marketing A goal the business aims to achieve through its marketing
1 1.3.5
objective activities
Marketing The methods used/plan/way chosen to achieve marketing
1 1.3.5
strategy objectives
Portfolio When business considers each of its products in the context of
1 1.3.5
analysis its market position
Product life The stages that a product goes through from introduction to
1 1.3.5
cycle decline
The collection/range/ list of items/products produced/sold/
Product portfolio 1 1.3.5
offered by a business
Collective Negotiation of wages/conditions of employment between
1 1.4.1
bargaining employee representatives / trade unions and the employer
Referred to informally as firing or sacking. It is the termination of
Dismissal 1 1.4.1
employment by an employer against the will of the employee.
Employer/emplo The way in which a company’s management and its employees
1 1.4.1
yee relations behave towards each other
Individual
approach When employers develop relationships with employees at an
1 1.4.1
(employer/ee individual level
relations)
Multiskilling The process of increasing the skills of employees 1 1.4.1
Part-time Workers that generally work a few hours or a few days a week.
1 1.4.1
employees Fewer hours than a full-time employee.
When a business needs to reduce the size of its workforce or
Redundancy 1 1.4.1
even close. Redundancy can be voluntary
A cost to businesses in terms of recruitment, training,
Staff as a cost 1 1.4.1
remuneration, welfare and even severance

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 Employers recognise the input of employees as an important
business resource. They contribute to the value of output,
Staff as an
whether this is through providing added value to a product by 1 1.4.1
asset
supporting the manufacturing process or through effective
customer service
Temporary work The job position is generally for a limited period of time 1 1.4.1
A workforce representative that act to protect and improve the
Trade unions 1 1.4.1
economic and working conditions for their members.
External When the business looks to fill the vacancy from outside of the
1 1.4.2
recruitment business.
Induction Introductory training given to employees coering its background,
1 1.4.2
training policies, health and safety procedures
Internal Selecting employees who already work within the business to fill
1 1.4.2
recruitment job vacancies
Off the job When employees are given training away from their normal job
1 1.4.2
training environment, often in a classroom
On-the-job
Learning/gaining/developing skills whilst at work doing the job 1 1.4.2
training
Recruitment The process of finding and selecting workers. 1 1.4.2
The developing of a person, to enhance skills and knowledge.
Training 1 1.4.2
Training can be on-the-job or off-the-job
An organisational structure where business decisions are made
Centralised
at the top of the hierarchy by senior management/or at the 1 1.4.3
structure
headquarters of a business
Chain of
The way authority and power is organised in an organisation 1 1.4.3
command
Decentralised When a business allows branches to take more control/make
1 1.4.3
structure their own decisions
Flat
One with few layers and a wider span of control for each
organisational 1 1.4.3
manager
structure
The order or levels of responsibility in an organisation, from the
Hierarchy 1 1.4.3
lowest to the highest
Matrix
Organises employees from different disciplines or divisions into
organisational 1 1.4.3
projects/teams
structure
A diagram that shows who is answerable to whom in an
Organisation
organisation. It can also show vertical and horizontal 1 1.4.3
structure
communication links
The number of employees/subordinates that a manager is
Span of control 1 1.4.3
responsible for
Tall
One with many layers and a narrow span of control for each
organisational 1 1.4.3
manager
structure
A sum of money added to an employee’s wages/salary as a
Bonus 1 1.4.4
reward for performance when they reach or exceed their targets
A payment to a worker based on a percentage of the value of
Commission 1 1.4.4
sales.
Employees opinions/feedback are sought when making
Consultation 1 1.4.4
business decisions
Delegation Authority to pass down from superior to subordinate 1 1.4.4
Giving official authority to employees to make decisions and to
Empowerment 1 1.4.4
control their own work activities
Monetary rewards used to help improve staff motivation and
Financial
achievement. They can include Piecework, commission, 1 1.4.4
incentives
bonuses, profit sharing and performance related pay

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 Employees have choice over how/when they work by agreement
Flexible
with the company. E.g. zero hours contracts, homeworking, part- 1 1.4.4
workforce
time
Herzberg’s two A theory of motivation that is split into two categories: Motivators
1 1.4.4
factor theory and Hygiene factors
Job Giving an employee more work to do of a similar nature,
1 1.4.4
enlargement horizontally extending their work role
Giving employees greater responsibility and recognition by
Job enrichment 1 1.4.4
vertically extending their work role
Job rotation The changing of jobs or tasks 1 1.4.4
Maslow's
hierarchy of The order of people’s needs, starting with basic human needs 1 1.4.4
needs
Emphasises the importance of the ways in which people interact
Mayo's human
and how they are treated. Motivation can improve when 1 1.4.4
relations theory
employees feel more involved
Motivation The reason for people's actions, willingness and goals. 1 1.4.4
Non-financial
methods of Non-monetary rewards 1 1.4.4
motivation
Ways of encouraging employees without the use of monetary
Non-financial rewards e.g Delegation, consultation, empowerment, team
1 1.4.4
techniques working, flexible working, job enrichment, job rotation and job
enlargement
Performance- A financial reward to employees whose work is considered to
1 1.4.4
related pay have reached a required standard
A payment system where employees are paid an agreed rate for
Piece rate 1 1.4.4
every item produced
A form of financial incentive given to employees, where part of
Profit sharing 1 1.4.4
the profit of the business is shared amongst the employees.
Taylor’s Suggested a job could be broken down into constituent parts, so
scientific that the most efficient way of working could be calculated. He 1 1.4.4
management believes workers are motivated by money
Team working Organising people into working groups that have a common aim 1 1.4.4
Working The physical surroundings and the atmosphere of the
1 1.4.4
conditions workplace, and the way staff are treated by managers
Autocratic A leadership style where the decision-making is best kept with
1 1.4.5
leadership managers, who will direct subordinates with little consultation
A type of leadership style in which members of the group take a
Democratic participative role in the decision-making process. Group
1 1.4.5
leadership members are encouraged to share ideas and communication is
two ways
A leadership style where employees are encouraged to make
Laissez-faire 1 1.4.5
their own decisions within certain limits
Having a vision, sharing that vision with others and providing
Leadership 1 1.4.5
direction.
Management The day-to-day organisation of the business, including staffing. 1 1.4.5
Paternalistic Leaders that are in control, but take the welfare of employees
1 1.4.5
leaders into account when making decisions
Someone who organises a business venture by combining the
Entrepreneur other factors of production, namely land, labour and capital. 1 1.5.1
They task risks to set up a business in hope of profit/reward
Entrepreneurshi The activity of setting up a business, taking on risks, normally in
1 1.5.1
p the hope of making a profit
Something an entrepreneur can essentially plan for. Probabilities
Risk 1 1.5.1
of outcomes are known or at least understood or considered.
Entrepreneurial Qualities or traits demonstrated by an individual starting up and
1 1.5.2
characteristics running a business

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Entrepreneurial
Factors that drive a person to start a business 1 1.5.2
motive
Ethical stance In support of a moral belief that they believe in 1 1.5.2
Home working Setting up a business from home 1 1.5.2
Independence A desire to be their own boss 1 1.5.2
Profit Satisficing Making enough profit to satisfy the needs of the business owner 1 1.5.2
Social
entrepreneurshi Setting up a business and showing concern for the local area 1 1.5.2
p
Business A goal/target set by the business in the short/medium term to
1 1.5.3
objective help achieve its aim/mission
Minimising costs/expenses/waste when producing a product or
Cost efficiency 1 1.5.3
service
Customer Is a measurement of how satisfied a customer is with their
1 1.5.3
satisfaction purchase
Employee Facilities and benefits provided by a business to meet the well-
1 1.5.3
welfare being of the employee
Profit When the difference between sales revenue and cost is at its
1 1.5.3
maximisation greatest
Sales An attempt to sell as much as possible in a given time period (or
1 1.5.3
maximisation to generate as much sales revenue as possible)
Social
A goal to benefit/improve the community 1 1.5.3
objectives
A short-term business objective that aims to keep the business
Survival 1 1.5.3
running.
A business is buys the right to trade using the
Franchise brand/logo/business model of an existing firm in return for a 1 1.5.4
fee/royalty
A type of business where a business operator (franchisor) allows
Franchising 1 1.5.4
others (franchisee) to trade under its name (for a fee)
Lifestyle A business set up with the aim of making no more than a set
1 1.5.4
business level of income from which to enjoy a particular lifestyle
A type of business ownership/organisation owned by two or
Partnership 1 1.5.4
more people
A small to medium sized business, usually run by the family that
Private limited
owns it. Shares are sold to friends, family, and business 1 1.5.4
company
associates and it has limited liability.
Public limited A business with limited liability whose shares are publicly traded
1 1.5.4
company on the stock market
A business that has aim/objectives which benefits society and is
Social
not for profit/its profits are reinvested into the 1 1.5.4
enterprise
business/community
A business that that is owned by one person who has unlimited
Sole trader 1 1.5.4
liability
Stock market When a business sell shares publicly on the stock exchange for
1 1.5.4
flotation the first time
Opportunity cost The next best alternative forgone when making a decision. 1 1.5.5
A situation where having more of one thing leads to having less
Trade-off 1 1.5.5
of something else
Leader A person who inspires and motivates others to meet objectives 1 1.5.6
Salaries A fixed regular payment to an employee 1
A payment made to the employee from the employer, usually
Wages 1
paid on an hourly or daily basis

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