Edexcel -IAS Business Unit 1 Definitions

Term Definition
A Above-the-line promotion Advertising using media.

Adding value Enhancing product appeal (e.g., customer service).

Advertising Communication to encourage purchases.

Agent/broker An intermediary linking buyers and sellers.

Aims What a business tries to achieve in the long term.

Authority Right to command.

Autocratic leadership Leader makes all decisions.

B Below-the-line promotion Promotion not using media.

Bonus Extra pay for targets or recognition.

A 2x2 matrix model that analyses a product portfolio according to market growth rate and relative
Boston matrix market share.

Brand name A unique identifier (name/symbol) for a product to distinguish it from competitors.

Breaking-bulk Dividing large shipments into smaller ones.

C Centralisation Decisions made at the centre.

 Chain of command Power and authority structure.

Choices Deciding between alternative uses of resources in business.

Collective bargaining Negotiation on working conditions.

Commission Pay based on sales.

Competitive advantage An edge a business has over its rivals.

Competitive pricing Pricing based on rivals' prices.

Complementary goods Goods bought together (e.g., cars and petrol).

Consultation Getting employee input.

Consumer durables Goods that can be reused over time (e.g. cars).

Consumer panels Ongoing feedback from selected customers.

Cost plus pricing Cost + a percentage markup.

Credit crunch Difficulty in borrowing due to tight credit conditions.

Curriculum vitae (CV) Document with personal/job details.

D Decentralisation Decision-making moved lower.

Delayering Removing management layers.

Delegation Passing down authority.

Demand The quantity of a good consumers are willing to buy at a given price.

Demand curve A graph showing demand at various prices.

Democratic leadership Leader involves others.

 Design mix Key features considered in product design.

Direct selling Producers sell directly to consumers.

Discretionary expenditure Optional spending, not essential.

Disposable income Income left after tax and essential spending.

Distribution Movement of goods to consumers.

Distribution channel Path taken by product to consumer.

E E-commerce Using electronic systems to sell goods/services.

Emotional branding Using emotions to build a brand.

Empowerment Allowing employee decision-making.

Entrepreneurs Individuals who typically set up and run a business and take on the risks associated with it.

Equilibrium price Where supply and demand meet.

Ergonomics How people interact with their environment and tools.

Ethical sourcing Using materials/services that respect people and the environment.

EV (electric vehicle) Vehicle powered by electricity.

Excess demand Demand exceeds supply → shortage.

Excess supply Supply exceeds demand → surplus.

Extension strategies Methods used to prolong the life of a product.

External recruitment Hiring from outside.

F Flexible workforce Can adapt to changing demand.

Focus groups Group discussions led by researchers.

Formal organisation Official business structure.

G Generic brands Unbranded products with only category name.

H Hawthorne effect Workers improve when observed.

Hierarchy Level order in organisation.

Home workers Work from home.

Hygiene factors (Herzberg) Prevent dissatisfaction.

I Income elastic Demand increases more than income.

Income elasticity of demand Responsiveness of demand to income changes.

Income inelastic Demand increases less than income.

 Induction training Initial training for new employees.

Industrial action Worker disruption due to disagreements.

Inferior goods Demand falls as income rises.

Intermediaries Links between producers and consumers.

Internal recruitment Hiring from within.

Employees who use entrepreneurial skills within a business to develop initiatives without risking their
Intrapreneurs own money.

J Job description Outlines job tasks and responsibilities.

Job enlargement More work of similar nature.

Job enrichment Greater responsibility.

Job rotation Changing tasks periodically.

L Laissez-faire leadership Employees decide within limits.

Liquidation Selling off assets to pay debts.

M Manufacturer brands Brands by producers of goods.

Market A platform or system where buyers and sellers interact.

Market maps (perceptual maps) Diagrams comparing brands by two key attributes.
 Market orientated A business approach focused on customer needs.

Market positioning How a product is perceived in the minds of consumers.

Market research Gathering and analyzing data about consumers and markets.

Market segmentation Dividing a market into subgroups with similar characteristics.

Marketing mix The 4Ps: product, price, place, and promotion.

Marketing objectives Goals a business aims to achieve through its marketing.

Marketing strategy Plans to achieve specific marketing objectives.

Mark-up The added percentage to cost to gain profit.

Maslow’s hierarchy of needs Motivation from basic to self-actualisation.

Merchandising Promotion at point of sale.

Motivated Desire to achieve goals.

Motivators (Herzberg) Cause satisfaction.

Multiskilling Increasing worker skills.

N Normal goods Demand rises with income.

O Objectives Goals or targets set by a business to help achieve its long-term purpose.

Off-the-job training Training away from workplace.

 Online retailing (e-tailing) Selling via the internet.

On-the-job training Training at the workplace.

Opportunity cost The benefit lost from the next best alternative when a choice is made.

Organisational chart Diagram of job roles.

Outsourcing Using outside suppliers.

Own-label/distributor/private
brands Products sold under a retailer's brand.

P Paternalistic leadership Leader considers employee welfare.

Payment by results Pay for quantity/quality.

Penetration pricing Low price to enter market.

Performance-related pay (PRP) Pay for meeting targets.

Person specification Profile of ideal candidate.

Piece rates Pay per unit produced.

Point of sale Where a consumer buys a product.

Predatory pricing Very low price to eliminate competitors.

Price elastic demand Demand changes significantly with price changes.

Price elasticity of demand A measure of how demand responds to price changes.

Price inelastic demand Demand changes little with price changes.

Pricing strategy Methods used for product pricing.

Primary research Collecting new, original data (e.g., surveys, interviews).

 Product design The process of creating a new product.

Product differentiation Making a product stand out from competitors.

Product lines Groups of similar products.

Product orientated A focus on production and product features, not customer needs.

Product portfolio All the products a business is currently marketing.

Profit maximisation An attempt to make as much profit as possible in a given time period.

Profit satisficing Making enough profit to satisfy the needs of the business owner(s).

Profit sharing Share of company profits.

Promotion Attracting and retaining customers.

Psychological pricing Slightly below round price.

Public relations Managing firm’s communication with the public.

Q Qualitative research Focused on opinions and attitudes.

Quantitative research Focused on measurable data (e.g., statistics).

Quota sampling Sampling based on characteristics (e.g., age, gender).

R Random sampling Every member has an equal chance of selection.

Recycling Using discarded materials again.

 Repositioning Changing customer perception of a product.

Resource depletion Using up natural resources.

Respondents People who answer research questions.

Responsibility Duty to complete a task.

Retailer Sells in small quantities to consumers.

S Sales maximisation An attempt to sell as much as possible or generate maximum sales revenue in a given time period.

Sales promotions Short-term methods to boost sales.

Sample A smaller, representative group from the target population.

Scientific management Theory: best way to work.

Secondary research Using existing data (e.g., databases, reports).

Secured loan Loan backed by assets (e.g., house).

Self-actualisation Realising full potential.

Skimming/creaming High price at first, then lower.

Socio-economic groups Social class divisions (based on income, occupation, etc.).

Span of control People one is responsible for.

Sponsorship Financial contribution for publicity.

Stratified sampling Random sampling within subgroups of the population.

Subordinates People under senior's control.

Subsidy A government payment to encourage production.

 Substitute goods Alternatives that serve the same purpose (e.g., tea vs coffee).

Supply Quantity of a good producers are willing to sell at a given price.

Supply curve A graph showing supply at various prices.

T Target population The total group a business wants to study.

Teamworking Working in groups.

Total revenue (total expenditure) Price × quantity sold.

Trade unions Worker organisations for rights.

A compromise between two different alternatives, such as between reinvesting profits or paying
Trade-offs dividends.

Training Improving skills and knowledge.

U Unique selling point (USP) Feature that differentiates a product from rivals.

Unit costs Total cost ÷ output.

Unsecured loan Loan not backed by collateral.

V Viral marketing Encouraging sharing of promotional content.

W Waste minimisation Reducing discarded resources.

Wholesaler Sells in bulk to retailers.

Z Zero-hours contract No guaranteed hours.