business unit 1

• Enterprise


  The action taken by individuals to start a business
• SME


  Small to medium sized enterprises that employ fewer than 250 employes and turnover less than £50 million.
• Enterpreneur


  An individual who sets up and runs a new business and takes on the risks associated with the business.
• Primary sector


  produces all the raw materials
• Secondary sector


  Converts (manufacturers) the raw materials into the final products ready to sell.
• Percentage change


  New value- old value / old value x100
• Stakeholders


  any individuals and organisations who are affected by the decisions and actions of a business.
• Type of stakeholders


  Owners

  Managers

  Employees

  customers

  suppliers

  government

  community

  competition

  financiers

  pressure groups
• Shareholder


  invested money into the business
• Business plan


  a written document that describes a business, its objectives and its strategies, the market it is in and its financial forecasts
• Benefits of a business plan

  - Helps entreprenuer to focus on their goals

  -Provides template to measure progress

  -Outlines everything which needs to be done

  -Helps assess the feasibility of the business idea
• Drawbacks of a business plan

  -Based on forecasts and estimates which could be inaccurate

  -Takes time to carry out research and write out the plan

  -Can cost money to research

  -Entrepreneur can lack expertise
• What is a Market?

  A place where buyers and sellers come together to exchange goods and services
• competitive market


  When there are a large number of buyers and sellers where no single buyer or selller can affect the price of goods being sold.
• local market


  The business selling to a small geographical area
• Global market


  Selling markets across the world
• Mass market


  A large market where customers have similar needs and characteristics
• Niche market


  Targets smaller segments of a larger market where customers have specific needs and wants
• Trade market


  Selling to other businesses
• Consumer markets


  Selling goods and services directly to private customers
• Seasonal market


  Sales peak at certain times of the year
• Market segmentation definition


  Identiifying and targeting groups of people with similar needs and developing products of services for each of them.
• 3 types of market segmentation

  1. Demographic (age,social class, gender, income)

  2.Psychographic (personalit, emotional based behaviour)

  3.Geographic (regions of the ccountry, global marketing often require different products for different countries.)
• Deciding on a suitable segment

  1. Recognisable

  2. Critical mass

  3. Targetable
• Advantages of market segmentation to Customers

  -more variety

  -fits specific needs

  -easier to find what your looking for

  -customers are aware of new features
• disadvantages of market segmentation to Customers

  -higher prices

  -excluded from other products

  -confusion as to what products are aimed at them

  -excluded if needs are not recognised.
• Advantages of market segmentation to business

  -Bigger target market

  -brand loyalty

  -experts in segment

  -charge higher prices
• disadvantages of market segmentation to buisness

  -Time consuming

  -higher costs

  -detailed market research

  -stock and storage problems
• Market


  A place where buyers and sellers meet to exchange goods and services
• Market analysis


  The process of gathering information about anything that has/will affect conditions in the market in which a business operates.
• Market data


  information that can help marketing decisions. It includes market share, changes in demand and trends
• Market size


  total quantity of demand in a market or during a specific time period.
• Market share


  Proportion of sales a business has achieved as a percentage over time
• Market trends


  changes and developments in the buying and selling of products and services in a market
• Market size calculation


  The total number of sales in a market
• Market share calculation


  Sales of business / total market size x 100
• Consumer protection


  laws aimed at making sure that businesses act failry towards customers and consumers.
• sale and supply of goods act


  States that goods must be of satisfactory quality e.g. a safe hairdyer
• Trade Descriptions Act


  a law whereby a good or service must do what the advertising claims
• Enviromental protection


  Laws that exist to protect enviromen from pollution