Entrepreneur: an individual who undertakes to supply a good or service to the market for profit.
Leadership: the art or process of motivating employees to carry out tasks willingly and effectively Autocratic Leadership: Paternalistic Leadership: decisions are made entirely leader takes all the by the leader, without staff decisions, but takes a kindly participation, and orders are and supporting approach to expected to be followed employees. without question. Market orientation: Product orientation: prioritizing the customers’s prioritizing high quality and wants and needs when the business’s own developing products strengths when developing products. Primary research: research Secondary Research: of data that has been research of data that has collected specifically for the already been collected for purpose in question, either some other purpose. by the firm itself, or by a market research agency. Product differentiation: to Sample: a small group of offer different variations of people from a larger group a product, or market the (population), thought to same product in different represent the characteristics ways to different segments. of the population.
Interviewer bias: a situation in which the behavior of the interviewer leads to inaccurate data, e.g. because the interviewer seemed to encourage a particular response. Market share: the total sales of one firm in a market as a percentage of the total sales in the market. Niche marketing: the marketing of a product to a single, usually small segment of a market. Unique Selling Point: a characteristic of a product that makes it unique or different from competing products.
Democratic Leadership: decisions are made with participation of staff, although are ultimately made by the leader. Laissez-faire leadership: virtually all authority is delegated to employees, generally when employees are highly skilled and enthusiastic. Market research: the collection and analysis of data relating to the marketing of goods and services. Qualitative data: in-depth research into the causes of consumer behavior, attitudes, tastes, etc.
Statistical bias: a situation in which the characteristics of the sample do not represent those of the population, because more people with a particular characteristic were questioned. Sampling discrepancy: a Market size: the size of a situation in which the market in terms of sales, characteristics of the sample either number of units or do not represent the value of goods sold. characteristics of the population.
Market growth: the percentage increase in the size of a market, measured through the level of total sales, over a period of time. Mass marketing: the marketing of a product to all segments of a market in almost the same way. Overdraft: permission by the bank to let an account go into debit, up to a specified limit. Interest is charged daily on the amount of overdraft.
Market segmentation: the division of a market into groups of consumers with shared characteristics, like age, income, etc. Quantitative data: numerical data like market share, market size, etc. Market positioning: studying how consumers view or perceive a product in relation to competing products e.g. through market mapping.
Adding value: converting inputs into output that is of greater value to consumers e.g. raw materials into finished goods.
Test marketing: launching a product in a limited geographical area to asses consumer reaction to the product and identify problems with the product.
Stakeholder: someone who is affected, in monetary terms of otherwise, by the activities of a business e.g. consumers, employees, shareholders, those living near factories. Retained profit: profits Loan: money lent on made that are kept within condition that it is repaid, the business, instead of within a specific date, being distributed among the usually with interest. owners of the business.
Trade-off: the loss of one opportunity as a result of taking another opportunity e.g. choosing between business ideas or new products. Debenture: a type of Venture capitalist: a security issued for finance financier specializing in by a business to the public, funding new and whereby the buyer becomes innovative, but also high a lender to the company, risk, businesses in exchange and is paid a fixed amount for shares in the business, of interest annually over a in the hope that the period of time. business will grow over time. Market mapping: Leasing: hiring an asset e.g. identifying key variables in a a machine from a leasing product, plotting graphically company for a specific how competing products time, in exchange for are located in terms of paying rental charges. It is combining two variables, an alternative to buying the and identifying potential asset. gaps. Trade credit: credit given by Limited liability: being liable one company (e.g. a for business debts only to supplier) to another (e.g. a the extent of the amount buyer). invested in the company. This arises because the business is a separate legal entity. Psychological pricing: an Penetration pricing: approach to pricing that charging a low price for a reflects the psychological new product in a market impacts of pricing, and not with lots of competitors, in just the economics of the the hope of gaining a situation e.g. higher prices significant market share. = higher quality Price skimming: charging a Fixed costs: costs that do very high price for a new not change with the level of product to make large output in the short run e.g. profits, then lowering the rent price when competitors enter the market.
Ordinary shares: securities issued to the public, whereby buyers become part owners of the company, have voting rights when electing directors, and are paid dividends based on profits Leaseback: selling an asset, and immediately leasing it. This is used to raise finance for the business, while retaining use, but not ownership, of the asset.
Cost based pricing: pricing a product based on how much it cost to produce it, and adding a profit margin.
Penetration: the extent to which a product has been accepted by the total possible users, generally expressed as a percentage.
Variable costs: costs that change with the level of output, increasing when more output is produced e.g. raw materials, wages
Break even point: the level of output at which all costs are covered, and no profit or loss is made.
Competitive Advantage: an advantage gained over competitors by offering better value, either through lower prices, or something that justifies a higher price, like better advertising or
Margin of safety: the excess of the level of production over the break even level. It is the amount by which production can fall before a loss is made.
Contribution: the amount that a transaction generates (revenue – variable costs) to cover fixed costs and produce a profit.
