GCSE OCR BUSINESS STUDIES PAPER 1

• Market segmentation


  splitting the market for a product into different parts, or segments.
• Target market


  group of customers at which a product or service is aimed, or targeted.
• 4 Ps of the marketing mix

  price, product, place and promotion; known as....?
• Price


  One of the 4 P's. This is the one which focuses the business on how much they are going to charge consumers.
• Competitor pricing


  when a price is set based on prices charged by competitor businesses for a similar product.
• Cost-plus pricing


  pricing method that adds a percentage of profit to the total costs of making a product. This gives the selling price.
• Penetration pricing


  when a price is set lower than the competitor businesses. Often used by new businesses to break into a market. This should only be seen as a short-term strategy.
• Skimming


  where a new product is more advanced than that of competitors; a price is set high as some customers are willing to pay higher prices to own the newest technology. Sometimes called 'creaming'.
• Promotional pricing


  prices are reduced to give products a boost or to sell off old stock. Most commonly seen as 'sales' in shops.
• Product


  One of the 4 P's. This is the one where the business develops the item (or service) they are planning on selling.
• Design


  Changing an existing product slightly to meet customer needs.
• Innovation


  improvement on an original idea, which will often involve using new processes or new technologies.
• Invention


  the introduction of a totally new product or feature.
• Research and development (R&D)


  used to help introduce both new and existing products. The research may be testing products in a laboratory or conducting market research by interviewing customers.
• Product life cycle


  the life of a product, usually shown as a graph divided up into four stages: introduction, growth, maturity and decline.
• Introduction (Product Life Cycle Stage)

  when a product or service is first on sale.
• Growth (Product Life Cycle Stage)


  when sales are growing strongly as the new product or service becomes known.
• Maturity (Product Life Cycle Stage)


  when sales are at their highest level.
• Decline (Product Life Cycle Stage)


  when sales are falling as the product or service is seen by customers as being old and they switch to newer products and services.
• Place


  One of the 4 P's. This one is regarding where you'd choose to sell the product and how you get it to customers.
• Physical distribution


  the distribution of goods using a physical presence such as a shop or office.
• Digital distribution


  movement of goods to a customer through the use of a website or app. This is content in which consumers do not receive a physical product, but receive it digitally as a download.
• E-commerce


  the buying and selling of goods over the internet
• Promotion


  One of the 4 P's. This one is concerned with how you tell the customers about your product and convince them to purchase.
• Point of sale promotions


  Promotions that happen in-store. These include price reductions, loss leaders, competitions and free samples.
• Loss leader


  An item priced at or below cost to draw customers into a store or to drive sales in complimentary goods (e.g. printers and printer ink).
• Advertising campaign


  a series of advertisements, often using different advertising media.
• Advertising media


  the methods by which a business can advertise a product. Includes newspapers, TV, social media and radio.
• Market data


  information that can help marketing decisions. It includes data on such things as market share, changes in demand and the effect of promotions.
• Market share


  the percentage of total sales of a product that a business has made. If a business sells 20,000 products and the total market for that product is 50,000, then the business has a market share of 40 per cent.
• Human resources


  means the workers employed by a business
• Human Resources Function


  Deals with human resources needs of the business, e.g. what types of workers and looks after the welfare of employees. (Sometimes known as the Personnel Department)
• Selection


  the process of choosing between applicants for a job.
• Job description


  lists the main duties and responsibilities of the worker.
• Person specification


  lists the qualities, qualifications and knowledge that a person should have to do a particular job.
• Internal recruitment


  a job vacancy is filled by employing someone who is already an employee of the business.
• External recruitment


  when a job vacancy is filled by employing someone from outside the business.
• Skills gap


  the business is short of workers of a particular type / ability.
• Skills shortage


  the businesses cannot recruit workers with the skills they need, so may have to train them.
• Internal methods of recruitment

  include notice boards, word of mouth, company website and emails to staff.