IB Business and Management – Flashcards
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marketing
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management process involved in identifying, anticipating, and satisfying customers profitably
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product orientation
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businesses focus on the production process and the products itself
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market orientation
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businesses that continually identify, review, and analyze consumers needs
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asset-based marketing
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a business develops goods and services that make the best use of its strengths
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desk research
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involves the use of secondary data
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secondary data
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information which already exists in some form
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field research
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collecting primary data; must be collected by the researcher
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primary data
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data that does not already exist
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niche marketing
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aims at a tiny segment of the market
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repositioning
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occurs when there is a shift in consumer demand
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marketing mix
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elements of a firm's marketing strategies which are designed to meet the needs of customers
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the 4 p's of the marketing mix
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product, price, promotion, place
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extension strategies
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used to hopefully delay the decline in sales
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product portfolio (mix)
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the amount of products that a firm is selling at a given time
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price sensitivity
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how demand will be affected by price
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price elasticity of demand (PED)
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sensitivity of quantity demanded to changes in price
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above the line promotion
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using TV and newspapers
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below the line promotion
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direct method of promoting
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informative advertising
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designed to increase consumer awareness of the product
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persuasive advertising
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influence people to purchase a product by stressing that it is more desirable than others; often used to promote a company instead of a product
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corporate advertising
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promoting a company instead of a product
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channel of distribution
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route taken by a product as it passes from the producer to the consumer
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three pricing methods
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cost-based pricing, market oriented pricing, competition-based pricing
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cost-based pricing
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set with intent to cover costs
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market oriented pricing
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set with the market in mind
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competition-based pricing
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prices are influenced by competitors
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contribution pricing
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method of pricing takes into account that different products might need to be priced using different criteria
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penetration pricing
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used when trying to gain a foothold in the market
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destroyer pricing
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eliminate the opposition
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the uses of marketing research
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descriptive reasons, predictive reasons, explanatory reasons, exploratory reasons
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descriptive reasons
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identify what is happening in its market
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predictive reasons
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predict what is likely to happen in the future
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explanatory reasons
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explain a variety of matter related to its marketing; to find out why things are happening
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exploratory reasons
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investigating new possibilities in a market
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targeting the market
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selecting a particular group to concentrate on
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ways to target the market
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undifferentiated marketing, differentiated marketing, concentrated marketing
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undifferentiated marketing
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aimed usually at the whole market; expensive
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differentiated marketing
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involves different products to different groups or changing the means of promotion
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concentrated marketing
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specific section of the market specific product
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business position products
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benefits, unique selling proposition (USP), product attribute, product origin, product classification
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unique selling proposition (USP)
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what sets the product apart from competitors
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product life cycle
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development, introduction, growth, maturity, saturation, decline
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boston matrix
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high market share and high market growth- star high market share and low market growth- cash cow low market share and high market growth- problem child low market share and low market growth- dog
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wholesaler
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link between producers and retailers
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retailers
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can deal with a wholesaler, or directly with the producer of the product
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agents
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link between those providing a good or service and those wishing to buy them
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methods to entering international markets
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exporting, franchising, licensing, joint ventures, direct investment, mergers or takeover
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ansoff matrix
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measures the growth of a business existing market and existing product- market penetration existing market and new product- product development new market and existing product- market development new market and new product- diversification
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factors of production
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land, labor, capital, enterprise
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land
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natural resources can be used from the land, rent
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labor
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the workforce of a business
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capital
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artificial resource made by labor
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enterprise
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entrepreneur develops a business idea, hires and organizes the other three resources to carry out the activity
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two groups of goods
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durable goods, non-durable goods
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durable goods
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goods that won't expire
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non-durable goods
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goods that will expire
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classification of business activity
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primary, secondary, tertiary
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primary
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take natural resources from earth
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secondary
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manufacturing, processing and construction
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tertiary
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services
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franchiser
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the parent company
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franchisee
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sells the product
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stakeholder
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anybody that has an interest in the business
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interdependence
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managers/employees/suppliers/consumers all depend on each other
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management buy-out
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management buys out the owner with personal funds or bank loans or perhaps venture capitalists
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venture capitalist buy-out
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might be called a leveraged buy-out; many occur when restructuring, family demise, avoiding bankruptcy
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management buy-in
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outside management team takes over a business
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mission statement
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short statement that lists broad objectives, or an overall theme for the entire business
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basic economic problem/scarcity
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not enough resources to fulfill the needs and wants of society
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opportunity cost
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the benefit lost from the next best alternative; what you have to give up, to get what you want or need the most
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corporate culture
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the values, beliefs, and norms that are shared by people and groups in an organization
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strategy
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the pattern of decisions and actions that are taken by the business to achieve its goals and objectives
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planning
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planning is the process of deciding, in advance, what is done and how it is to be done
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competitive advantage
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internal analysis; might examine the strengths of the business which give it a competitive advantage over rivals, such as the skills of its workforce
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contendency plan
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back up plan if the first attempt fails or problems occur; to fix the crisis
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outsource
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when a business gives some of its work to other producers to help prevent interruptions in production
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three questions to answer when dealing with the basic economic problem
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what should be produced? how should it be produced? For whom should it be produced?
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three types of economies
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market, planned, mixed
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three types of decisions
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strategic, tactical, operational
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strategic
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general direction and overall policy of a business; long-term (the outcome will not be know for more than 1 year); higher risk (because of uncertainty); upper level management (owners) make these types of decisions
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tactical
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calculated; outcome is more predictable than a strategic decision; short-term; less risk; middle level management (store managers) will make these decisions
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operational
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administrative; short-term decisions that are made often within the course of a day; low risk; made by all types of employees
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methods of finance for an expanding business
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private funds, partners/shareholders, bank loans, asset leasing and hire purchase, venture capital/business angels, merger capital, retained profits
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SWOT analysis
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S- strengths W- weaknesses O- opportunities T- threats strengths and weaknesses are internal factors of the company; opportunities and threats are external factors towards the company
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PEST analysis
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P- political E- economical S- social T- technical examines external and global factors more than internal factors
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downsizing
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creating a flatter organization structure normally cutting out middle management
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organizational chart
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illustrate the structure of the business
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chain of command
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order of levels of a management firm
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span of control
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number of people working under someone
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centralization
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when only top level managers have all authority
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delegation
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when lower lever managers would have total authority
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delegating
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handing out authority to someone working under you
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responsibility
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being accountable or being able to justify an action
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authority
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the ability to carry out a task
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human resources
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the people that work for a business
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job enlargement
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more responsibility in a similar nature
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job rotation
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changing jobs or tasks from time to time
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job enrichment
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vertical expansion in the production process
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multiskilling
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enhancing the skills of employees
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quality control circles
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small groups in the same work area that have scheduled meetings about problems and how to fix them
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empowerment
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delegating more power to employees
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workforce planning
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planning on how many employees will be needed in the future with regards to retirement, vacancies, expansion
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forecasting
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using relative information to predict how many jobs will be needed
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adapters
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solve problems by using existing or slightly modified approaches
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innovators
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different and unexpected ways of solving problems; in reality, most business people have a combination of both approaches
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emotional intelligence
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the ability of a person to sense and understand their own and others emotions and to apply that understanding to achieve an outcome
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forms of business structure
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entrepreneurial structure, pyramid structure, bureaucratic structure, matrix structure
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entrepreneurial structure
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decisions made centrally; small businesses or businesses with constant extreme deadlines
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pyramid structure
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decision making shared through business; levels of management
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bureaucratic structure
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individuals within teams (groups) have their own responsibilities; works well for projects or tasks, but slow in final decision making
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matrix structure
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a support system that focuses on the individual
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Maslow's hierarchy of needs
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can't have higher level, or class without the lower level; physiological needs, safety needs, feeling of love and belonging, esteem needs, self-actualization
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theory x
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Douglas McGregor; people are lazy
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theory y
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Douglas McGregor; people are internally motivated
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Herzberg's two-factor theory
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motivator and hygiene factors need to be met to prevent dissatisfaction
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organization behavior modification
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positive reinforcement, negative reinforcement, punishment
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positive reinforcement
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rewarded for good performance; something the employee likes is praised
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negative reinforcement
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something that the employee dislikes is taken away
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punishment
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something the employee likes is taken away or something the employee dislikes is given
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payment schemes
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time rates, annualized hours, piece rate, commission, fee, fringe benefit
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time rates
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salaries, wages, overtime
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annualized hours
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work so many hours a year
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piece rate
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the more you produce or make, the more money you get
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commission
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paid percentage of the revenue you bring in
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fee
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one time payment
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fringe benefit
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payments other than wages or salaries, other benefits
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any incentive scheme should consider these 5 principles
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principle of closure, control and monitoring, task variety, self regulation, interaction and cooperation
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formal/informal communication
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line, staff, lateral
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line
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has authority behind it
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staff
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persuasive but without authority
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lateral
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when people communicate within the same level
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communication networks
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circle, chain, wheel, connected
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circle
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departments can communicate with only two others
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chain
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one person passes information to others
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wheel
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a person, group or department that occupies a central position of communication
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connected
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good for brain storming and bouncing ideas around
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types of personalities
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type A, type B
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type A
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competitive; high need for achievement
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type B
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easy going
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types of people effective groups have
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idea person, energy person, logical thinker
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group development stages
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Tuckman and Jensen; start out form, storming, group norming, perform, break up
