Key terms

• Advertising media


  Various places where advertisements may be found such as television, newspapers or the internet
• Aim (Business)

  The long term objective of the business. Its aim might be to become the biggest business in its sector
• Backward vertical integration


  Occurs when the suppliers of a business are taken over by that business
• Bank loans

  Long to medium term loans that can be used to buy producer goods. The goods become the property of the business immediately but failure to repay the loan to the bank could lead to the business being closed down
• Batch production


  Found when a small number of identical products are made at once. Batches can be made as often as required
• Blogs


  Provide information and allow discussion on the internet with other users producing their own entries or posts
• Break-even


  Occurs where the total amount of money taken in by a business is the same as the amount of money paid out. Neither a profit nor a loss is made where total revenue equals total cost
• Business angels


  Wealthy individuals who invest their private capital into start-up businesses in return for a share in the business
• Business plan


  Helps in decision making by showing the aims and objectives of a business and the strategies and requirements needed to achieve these. It also provides information to banks and other possible providers of finance to persuade these to grant loans and other monies to the business
• Cash


  Money held by the business or in its bank accounts
• Chain of command


  The path along which orders pass within a business from the management to the shop floor
• Commercial services


  Services that provide mainly to businesses such as transport and warehousing but they may also be available to individuals such as insurance and banking
• Cash-flow forecast


  Cash-flow involves the difference between the inflow and outflow of cash in a business. In a cash-flow forecast businesses predict what they expect to happen to their cash-flow in the future
• Competitive environment


  Where there are a number of businesses attempting to persuade consumers to buy their products. Such competition will be based on such factors as price, design and quality
• Competitive pricing


  A pricing strategy which involves the producer offering goods for sale at a price at or below that set by competitors
• Consumer goods


  Those which are produced for the final consumer
• Consumer panels


  Recruited by research companies to represent the views of consumers in a particular sector. They will be asked to comment on such things as product design and taste or on the branding and advertising of products
• Consumers


  The final users of goods and services. They are at the end of the distribution channel
• Contribution


  The amount taken from the cost of selling every good used towards paying the fixed costs of producing that good
• Contribution per good


  Selling price minus the cost of the good
• Co-operatives


  Generally seen as social enterprise businesses owned by the employees or, most commonly, their customers
• Cost


  The amount of money used to buy a good or service
• Cost plus pricing


  A pricing strategy which involves the producer adding a sum of money (the profit per good) to the cost of producing goods to determine the selling price of the good or service
• Curriculum vitae (CV)


  Written by a person looking for employment. It outlines that individuals personal details, qualifications, experience and interests in the hope that these impress a possible employer
• Customer service


  Involves the interaction between the business and the customer in which the business understands consumer needs before, during and after the sale of a good or service. Positive reactions to service can provide benefits for the businesses in relation to reputation and future sales
• Digital adverts

  Use internet technologies to provide a range of advertising including using e-mail, social media messages and banner advertisements on mobile phones and websites
• Distribution


  Involves materials being transported or moved to the producer or the final product being moved to the consumer
• Distribution channels


  Involve the routes which goods follow between the manufacturer and the consumer. The route may be direct between the two but the interaction of middlemen is more likely
• Diversification


  Allows a business to enter a different market in addition to the one they are already involved. This enables the business to spread its risks should the original business fail
• Durable goods


  Consumer goods which are not used at once and do not have to be bought frequently because they last for a long time
• 1. commerce


  Involves the buying and selling of goods and service via the internet
• Entrepreneur


  A person who sets up a business by taking on the financial risks in the hope of making a profit
• Ethics (Business)


  Involve a business doing what is morally right for its stakeholders
• Extension strategies


  Involve a number of methods businesses might use to prolong the life cycle of their products. These will be related to marketing mix strategies
• External growth


  Involves increasing the size of a business by buying other businesses
• Feedback


  The response by a customer following the purchase of a good or service. This will be used by the producer to improve what has been produced
• Fixed cost


  Always stays the same no matter how many goods are produced
• Flat (horizontal) structures


  Involve organisational charts where there are few or no levels of middle management between staff and executives
• Flexible hours


  A working practice in which workers are no longer in their offices between two set times. Many can now work a full day within a range of hours set by the employer
• Flow (mass) production


  A method of production where goods are produced continuously usually on a production line