McAuley GCSE Business - Unit 1 Setting up a Business

  1. Explain the difference between primary and secondary market research
    Primary gathers new data, secondary uses data that already exists.
  2. State 3 benefits of market research
    • More focused marketing
    • Can target customers better
    • helps a business be more competitive.
  3. How much should a firm spend on market research?
    Depends on how much it has, what it is trying to find out and the expected returns.
  4. Would you use primary or secondary research to test a new product? Why?
    Primary - the idea is new so there is no previous data.
  5. What are the 4 elements of the marketing mix?
    Price, Product, Place, Promotion
  6. State 3 factors that might influence how much is spent by a firm on advertising
    • the firms financial resources
    • its marketing objectives
    • which media is used in the advertising activity
  7. How might a firm react to a fall in sales?
    increase promotional activitives, cut prices, modify the product.
  8. What is a retailer?
    a business selling a final product
  9. State 2 types of retail outlets
    Department Store, Independent retailer, Supermarket, Chain store
  10. Identify 2 problems of selling via retailers?
    • no control over final price
    • no control over the way products are sold and promoted in the shops
  11. Distribution is one element of the marketing mix. Name 3 others
    Price, Product, Promotion
  12. State 1 problem of borrowing money
    Pay interest
  13. State one disadvantage of selling more shares to raise finance
    Have to bring in new owners, lose control
  14. What is the difference between a plc and an ltd?
    a plc can advertise and selling shares on the stock exchange whereas an ltd can only sell shares to people they invite.
  15. Who owns a business in the public sector?
    the government.
  16. One firms sales as a percentage of the whole market is know as what?
    Market Share
  17. How might the size of a market be measured?
    By the number of items sold (sales), by the value of items sold (revenue)
  18. The 4ps of marketing is known as what?
    The Marketing Mix
  19. State 3 situations when a firm might charge a high price
    • If the product is heavily branded
    • If the product is unique and new
    • It there is little competition
  20. State 3 reasons why a firm might increase its advertising
    • to prevent sales falling
    • to make customers aware of a new product
    • to match a competitors campaign.
  21. State 2 ways of promoting a product
    advertising, sales promotion, sales force
  22. State 2 ways of advertising a small local food shop
    local newspaper, internet, yellow pages
  23. Is rent a fixed cost or variable cost? Why?
    fixed, it does not change with output
  24. State 2 ways in which the government might influence a firms location
    • offering subsidies or tax cuts
    • controlling planning permission
  25. What factors might influence the location of a business apart from the government?
    costs, where the customers are, availability of labour
  26. State 2 benefits of improving quality
    • fewer rejects and less wastage
    • greater customer satisfaction
  27. State 2 ways of improving quality
    • Better supplies
    • Making employees more responsible for their own worrk
  28. Why is better quality more important nowadays?
    because of more competition and greater demands from customers.
  29. What is quality control?
    inspections of items to check that they are not faulty
  30. What is batch production?
    groups of items that move from one stage of production to the next
  31. Give 1 advantage and 1 disadvantage of batch production
    • Advantages - flexible production, high volume, product items in given quantities
    • Disadvantages - inflexible, may produce to much, expensive
  32. What is flow production?
    Items move continuously along the production process, with the item been produced in stages.
  33. Give 1 advantage and 1 disadvantage of flow production
    • Advantages - specialise is each stage of the production, items move continuously along the product stage, high volume, low unit costs.
    • Disadvantages - inflexible, problems in the production line may bring production to a stop
  34. What is job production?
    Production of items to a specialised or personalised request
  35. Give 1 advantage and 1 disadvantage of job production
    • Advantages - items can be produced to specific requirements, flexible production,
    • Disadvantages - expensive, time consuming,
  36. State 2 benefits of training
    • increases skills of staff
    • may motivate staff
  37. State 2 problems of training
    • Costs
    • Staff may leave once they have been trained
  38. State 3 types of training
    • Induction
    • On the Job Training
    • Off the Job Training
  39. What is on the job training?
    Employees are trained as they do the work
  40. State 1 advantage of internal recruitment
    Managers know the people already and are aware of strengths and past performance
  41. Distinguish between a job description and a job (or person) specification
    A job description sets out what the job entails, a job specification sets out the requirements needed by someone to do the job
  42. What is the difference between internal and external recruitment?
    Internal recruitment means recruiting from within the business, external recruitment means recruiting from outside the business
  43. State 2 ways in which a firm might recruit a new receptionist
    • Local Job Centre
    • Advertisement in local newspapers
  44. The organisation responsible for implementing health and safety at work is known as what?
    The Health and Safety Executive
  45. What is the name given to an organisation that protects employees interests?
    Trade Union
  46. State 3 actions that might be taken if the Health and Safety at Work Act is broken?
    • Impose a fine
    • Demand that behaviour is changed
    • Shut down the firm until it takes appropriate actions
  47. State 3 benefits of a motivated workforce
    • Better productivity
    • Better attendance
    • Greater willingness to cooperate
  48. State 3 possible forms of industrial action
    • Strike
    • Go Slow
    • Work to Rule
  49. State 2 factors that influence the level of stocks that a firm holds
    • Expected demand
    • Opportunity costs
  50. State 4 costs of holding stock
    • Warehousing
    • Security
    • Opportunity costs
    • Depriciation
  51. Give examples of types of stock
    raw materials, components, work in progress, finished goods, general supplies
  52. What is induction training?
    Introduces employees to the job, the organisation and their colleagues.
  53. State 4 items that may be on a persons application form for a job.
    • Previous experience
    • Qualification
    • Age
    • Sills
  54. State 2 factors which are important in conducting an effective interview
    • giving the interviewee the opportunity to talk
    • ensuring that there are no unwanted interruptions
  55. State 2 benefits of training
    • May lead to higher productivity
    • Employees may be more highly motivated and more willing to stay at the business
  56. State 3 reasons why a firm might not train staff
    • May not need to
    • Fear staff may be recruited by others
    • Cost
  57. State 3 factors that influence how much should be spent on training
    • Funds available
    • Skills available compared to skills required
    • Need to change attitudes and skills
  58. State 3 benefits of good communication in a business
    • May motivate staff,
    • Better decisions
    • Keep in touch with customers
  59. State 3 barriers of communication in a large business
    • Too many layers of hierarchy
    • Cultural differences
    • Conflicting Objectives
  60. State 3 consequences of poor communication in a firm
    • Poor decision making
    • Demotivated employees
    • Lack of direction
  61. What is a salary?
    A fixed sum per year, paid monthly to employees
  62. What is a Pension?
    A payment made to employees once they have retired
  63. What is piece rate pay?
    Payment by output, where someone is paid based on the amount they produce or sell of an item
  64. What is a Bonus?
    Additional payment on top of normal pay
  65. Who works in the tertiary sector: a miner or an accountant?
  66. Is the tertiary sector the largest or smallest sector in the UK?
  67. Tertiary business produce s_______ rather than goods.
  68. Who works in the secondary sector: a working in a factory or in a restaurant?
    A worker in a factory
  69. Ther service sector of the economy is called what?
    The tertiary sector
  70. Secondary businesses produce g_____ rather than services
  71. If the revenue from sales is greater that its costs, the firm is said to have made what?
    A profit
  72. Which of the following is a primary sector business: farm, school or car manufacturer?
  73. Name 2 other sectors in the economy apart from primary
    Secondary and Tertiary
  74. Is the primary sector in the UK relatively large or small?
  75. A firm makes a loss if the costs are greater than its r______
  76. What is meant by the National Minimum Wage?
    determines the least someone can be paid in a job
  77. What is the role of the Advertising Standards Authority?
    To ensure that advertisements are legal, decent, honest and truthful
  78. State 3 elements of a contract of employment
    • Terms and conditions of work and pay
    • Holiday entitlement
    • Notice Period for Dismissal
  79. How can technology help marketing?
    • To gather and keep information on customers
    • Use of websites and email
    • Electronic Point of Sale (EPOS)
  80. How could a firm raise finance for new technology?
    • Loans,
    • Profits
    • Overdraft
  81. How can technology help production?
    • Computer Aided Design (CAD)
    • Computer Aided Manufacturer (CAM)
    • Computer Integrated manufacturing (CIM)
    • Automatic Stock recording
  82. Why might employees resist new technology?
    • May lose jobs
    • May lack necessary skills
  83. State 3 stakeholder groups
    Employees, Managers, Local community, Owners, Shareholders, Investors, Customers, Government
  84. Are all stakeholders shareholders?
    No, someone does not have to have invested in the business to be a stakeholder
  85. What is the Internet?
    Worldwide network accessed through an online connection
  86. How can the internet help businesses?
    Can market and sell their products online, can use the internet to find information
  87. What factors might a manufacturer consider before selling directly via the internet?
    Reaction of existing retailers, impact on price, security for payment, intial design costs
  88. What are the advantages and disadvantages of e-commerce?
    • Advantages - relatively cheap to set up, do not need expensive locations, access to global markets
    • Disadvantages - customers cannot see the products directly, they may worry about security when they pay, they may be encouraged to shop around
  89. If a customer owes the business money, are they a debtor or a creditor?
  90. In a market, firms supply goods while customers d______ them
  91. Why might demand increase for a product?
    Better marketing, competitors leave the market, product becomes fashionable, firm enters new markets, change in the economy, prices are lowered.
  92. State 4 ways of making customers aware of a new product
    Advertising, Public Relations, Sales force, Sales promotions
Card Set
McAuley GCSE Business - Unit 1 Setting up a Business
Unit 1 - Setting up a Business Revision