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Introduction to Business
Exploring Business Canadian Edition by Karen Collins & Jackie Shemko 2010
277
Business
Undergraduate 1
10/07/2012
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Term
business
 Definition
An activity that provides goods or services to consumers for the purpose of making a profit.
Term
profit
 Definition
The difference between the revnue that a company brings in from selling goods and services and the costs of generating that revnue.
Term
management
 Definition
The process of planning, organizing, staffing, directing, and controlling a company's resources so that is can achieve its goals.
Term
operations manager
 Definition
The person who designs and oversees the process that converts resources into goods or services.
Term
marketing
 Definition
All the organizational activities involved in identifying customers' nees and in designing, pricing, promoting, and delivering products to meet those needs.
Term
accountant
 Definition
A finanancial advisor responsible for measuring, summarizing, and communicating financial and managerial information.
Term
finance
 Definition
Activities involved in planning for, obtaining, and managing a company's funds.
Term
economics
 Definition
The study of how scarce resources are used to produce outputs - goods and services - that are distributed among people.
Term
resources
 Definition
Inputs used to produce outputs
Term
factors of production
 Definition
Resources consisting of and, labour, capital (money, buildings, equipment), and entrepreneurial skills combined to produce goods and services.
Term
economic system
 Definition
The means by which a society makes decisions about allocating resources to produce and distribute products.
Term
communism
 Definition
An economic system featuring the highest level of government control over the allocation and distribution of resources.
Term
socialism
 Definition
An economic system that falls between communism and capitalism in terms of government control over the allocation and distribution of resources.
Term
free market system
 Definition
An economic system in which most businesses are owned and operated by individuals.
Term
capitalism
 Definition
An economic system featuring the lowest level of government control over the allocation and distribution of resources.
Term
mixed market economy
 Definition
An economic system that relies on both markets and government to allocate resources.
Term
privatization
 Definition
The process of converting government-owned businesses to private ownership.
Term
demand
 Definition
The quantity of a product that buyers are willing to purchase at various prices.
Term
demand  curve
 Definition
A graph showing the quantity of a product that will be bought at certain prices.
Term
supply
 Definition
The quantity of a product that sellers are willing to sell at various prices.
Term
supply curve
 Definition
A graph showing the quantity of a product that will be offered for sale at certain prices.
Term
equilibrium price
 Definition
The price at which buyers are silling to buy exactly the amount that sellers are willing to sell.
Term
perfect competition
 Definition
 Market in which many consumers buy standardized products from numerous small businesses.
Term
monopolistic competition
 Definition
A market in which many sellers supply differentiated products.
Term
oligopoly
 Definition
A market in which a few sellers supply a large portion of all the products sold in the market-place.
Term
monopoly
 Definition
A market in which there is only one seller supplying products.
Term
natural monopoly
 Definition
A monopoly in which the fixed costs of entering the market are so high that it isn't profitable for a second firm to enter and compete.
Term
legal monopoly
 Definition
A monopoly in which one seller supplies a product or technology to which it holds a patent.
Term
GDP
 Definition
The measure of the market value of all goods and services produced by a nation's economy in a given year.
Term
business cycle
 Definition
The pattern of expansion and contraction in an economy. Proserity, recession, recovery, depression.
Term
Three main economic goals:
 Definition
Growth, high employment, and price stability.
Term
recession
 Definition
An economic slowdown measured by a decline in GDP.
Term
depression
 Definition
A severe, long-lasting recession
Term
full employment
 Definition
A condition under which about 95 percent of those who want to work are employed.
Term
unemployment rate
 Definition
The percentage of the total labour force that is currently unemployed and actively seeking work.
Term
four external factors of business
 Definition
Economy, consumer trends, government and corporate citizenship.
Term
factors of production
 Definition
Land, labour, capital and entreprenurial skills
Term
Economic measures
 Definition
GDP change, unemployment rate, price stability (inflation vs deflation), and consumer price index.
Term
microeconomics
 Definition
The study of individuals and business economic choices
Term
macroeconomics
 Definition
Study of economy as a whole.
Term
legal monopoly
 Definition
A monopoly in which one seller supplies a procut or technology to which it holds a patent.
Term
price stability
 Definition
Conditions under which the prices for products remain fairly constant.
Term
inflation
 Definition
A rise in the overall price level.
Term
deflation
 Definition
A decrease in the overall price level.
Term
consumer price index
 Definition
The index that measures inflation by mearsuing the prices of goods purchased by a typical consumer against a base period.
Term
economic indicator
 Definition
A statistic that provides information about trends in the economy.
Term
lagging economic indicator
 Definition
Statistical data that measure economic trends after the overall economy has changed.
Term
leading economic indicator
 Definition
Statistical data that predict the status of the economy three to twelve months in the future.
Term
consumer confidence index
 Definition
A measure of optimism that consumers express about the economy as they go about their everyday lives.
Term
monetary policy
 Definition
Efforts exerted by governments to regulate the nation's money supply.
Term
fiscal policy
 Definition
Governmental use of taxation and spending to influence economic conidtions.
Term
national debt
 Definition
The total amount of money owed by the federal government.
Term
main particpants of business
 Definition
owners, employees and cutsomers.
Term
How do economists answer the three key economics questions?
 Definition
What goods and services should be produced to meet sonumer needs? How should they be produced, and who should produe them? Who should receive goods and services?
Term
entrepreneur
 Definition
An individual who identifies a business opportunity and asssumes the risk of creating and running a business to take advantage of it.
Term
goods-producing sector
 Definition
All businesses whose primary purpose is to produce tangible goods.
Term
service-producing sector
 Definition
All businesses whose primary purpose is to provide a service rather that make tangible goods.
Term
business plan
 Definition
A formal document describing a proposed business concept, the management team, goods or services, competition, product development process, production methods, marketing model, and financial projections.
Term
franchise
 Definition
A form of business ownership in which a franchisor (a seller) grants a franchisee (a buyer) the right to use a brand name and to sell its products or services.
Term
executive summary
 Definition
An overview emphasizing the key points of a business plan that should get the reader exited about the prospects of the business.
Term
mission statement
 Definition
A statement describing an organization's purpose or mission - its reason for existence - and telling stakeholders what the organization is committed to doing.
Term
core values
 Definition
A statement of fundamental beliefs describing what is appropriate and important in conducting organizational activities and providing a guide for the bahaviour of organization members.
Term
competitive advantage
 Definition
An advantage that a business has over its competitors. It can be based on offering customers a unique product, service, or experience, or by offering a more competitive price due to unique business efficiencies not shared by its competitors.
Term
product - service - experience value equation
 Definition
An analysis of how the product, service or experience that a business offers to its target market provides customers with better value than they currently receive in the market.
Term
why businesses fail
 Definition
bad business idea, cash problems, managerial inexperience or incompetence, lack of customer focus
Term
What does it take to start a business?
 Definition
Talent, determination, hard work, persisitence, research and planning.
Term
Advantages to starting a small business.
 Definition
Independence, the potential for financial rewards, the possibility of an improved lifestyle, learning opportunities, creative freedom and personal satisfaction.
Term
Disadvantages to starting a small business
 Definition
Financial risk, increased stress, substantial time commitment, the necessity of performing some unpleasant tasks and the risk of failure.
Term
management
 Definition
The process of planning for, organizing, directing, and controlling a company's resources so that it can achieve its goals.
Term
manager
 Definition
An individual in an organization who is responsible for making a group of people more effective and efficient.
Term
leader
 Definition
Anyone who, regarless of his or her position, inspires other to follow
Term
planning
 Definition
The process of setting goals and determining the best way to achieve them.
Term
strategic planning
 Definition
The process of establishing an overall plan or course of action for an organization.
Term
SWOT analysis
 Definition
An approach used to assess a company's fit with its environment by analyzing its strengths, weakenesses, opportunities and threats.
Term
goals
 Definition
Major accomplishments that a company wants to achieve over a long period of time.
Term
objectives
 Definition
Intermediate - term performance targets that direct the activities of an organization toward the attainment of a goal.
Term
tactical plans
 Definition
Short-term plans that specify the activities and resources needed to implement a company's strategic plan.
Term
operational plans
 Definition
Detailed action steps to be taken by individuals or groups to implement tactical plans.
Term
contigency planning
 Definition
The process of identifying courses of action to be taken in the event a business is adversly affected by a change.
Term
crisis management
 Definition
Action plans that outline steps to be taken by a company in case of a crisis.
Term
exit planning
 Definition
The process of identifying how a business will wind down should it not succedd or, alternatively, if the ownder shooses to move on to other pursuits.
Term
organizing
 Definition
The management process of allocating resources to achieve a company's plans.
Term
top managers
 Definition
Those at the top of the management heirarchy who are responsible for the health and performance of the organization.
Term
middle managers
 Definition
Those in the "middle" of the management hierarchy who resport to top management and oversee the activities of first-line managers.
Term
first-line managers
 Definition
Those at the bottom of the management hierarchy whho supervise employees and coordinate their activities.
Term
organizational structure
 Definition
An organiztaional arrangement of jobs that is most appropriate for the company at a specific point in time.
Term
restructuring
 Definition
The process of altering an existing organizational structure ot become more competitive under changing conditions.
Term
specialization
 Definition
The process of organizing activities into clusters of related tasks that can be handled by specific individuals or groups.
Term
departmentalization
 Definition
The process of grouping specialized jobs into meaningful units.
Term
divisional organization
 Definition
A form of organization that groups people into several smaller, self-contained units (or divisions) that are accountable for their own performance.
Term
product division
 Definition
An organizational struture made up of divisions based on product lines.
Term
customer division
 Definition
An organizational structure that groups employees into customer-based business segments.
Term
process division
 Definition
An organizational structure that groups people into operating units based on various stages in the productions process
Term
geographical division
 Definition
An organizational structure that groups people into divisions based on location.
Term
organization chart
 Definition
A diagram representing the inter-relationships of positions within an organization.
Term
reporting relationships
 Definition
Patterns of formal communication among members of an organization
Term
chain of command
 Definition
Authority of reporting relationships among people working at different levels of an organization
Term
matrix structure
 Definition
An organizational structure in which employees from various funtional areas form teams to combine their skills in working on a specific project.
Term
span of control
 Definition
The number of poeple reporting to a particluar manager
Term
delegation
 Definition
The process of entrusting work to subordinates
Term
centralization
 Definition
A decision-making process in which most decion making is concentrated at the top
Term
decentralization
 Definition
A decision-making process in which most decision making is spread throughout the organization
Term
directing
 Definition
The maangement process that provides focus and direction to others and encourages them to achieve organizational goals.
Term
leadership style
 Definition
the particular approach used by a manager to interact with and influence others
Term
autocratic leadership style
 Definition
A managment style identified with managers who tend to make decisions without soliciting input from subordinates.
Term
democratic leadership style
 Definition
A management style used by managers who generally seek input from subordinates while retaining the authority to make the final decision.
Term
laissez-faire leadership style
 Definition
A managment style used by those who follow a "hands-off" approach and provide relatively little direction to subordinates.
Term
transactional leaders
 Definition
Managers who exercise authority based on their rank in the organiization and focus their attention on identifying mistakes.
Term
transformational leaders
 Definition
Managers who mentor and develop subordinates and stimulate them to look beyond personal interests to those of the group.
Term
controlling
 Definition
The management processo of comparing actual to planned performance and taking corrective actions when necessary.
Term
technical skills
 Definition
Skills needed to perform specific tasks
Term
interpersonal skills
 Definition
Skills used to get along with and motivate other people
Term
conceptual skills
 Definition
Skills used to reason abstractly and alalyze complex situations
Term
time-management skills
 Definition
Skills used to manage time effectively
Term
decision-making skills
 Definition
Skills used in defining a problem, analyzing possible solutions, and selecting the best outcome.
Term
soel proprietorship
 Definition
A business owned by onely one person
Term
unlimited liability
 Definition
A legal condition under which an owner or investor is personally liable for all debts of a business
Term
partnership
 Definition
A business owned jointly by two or more people
Term
limited partnership
 Definition
A partnership made up of a single general partner (who runs the business and is reponsible for its liabilities) and any number of limited partners
Term
corporation
 Definition
A legal entity that is entirely separate from the aprties who own it and is responsble for its own debts
Term
shareholders
 Definition
Owners of a corporation
Term
stock
 Definition
A share of ownership in a coporation
Term
board of directors
 Definition
A group of people who are legally responsible for governign of corporation
Term
dividends
 Definition
A distribution of a portion of a corporation's income to shareholders in the form of cash payments.
Term
The four interrelated functions of management
 Definition
Plan, organize, direct and control resources to achieve specific goals.
Term
the process by which a company develops and implements a strategic plan
 Definition
strategic planning, mission statement, core values, SWOT analysis, set goals and objectives (performance targets), develop tactical plans and operational plans to implement objectives.
Term
The different options for organizing a business
 Definition
specialization, departmentalization, functional organization, divisional organization, geographical division
Term
the process by which a manager monitors operations and assesses performance
 Definition
establish standards, measure performance, compare actual performance with standards and identify any deviations, determine the reason for deviatioins, and take corrective action if needed
Term
product
 Definition
Something that can be marketed to customers because it provides a benefit and satisfies a need.
Term
industry
 Definition
A group of businesses that compete with one anotehr to market products that are the same or similar
Term
market
 Definition
A group of buyers or potential buyers who share a common need that can be met by a certain product.
Term
market segment
 Definition
A group of potential customers with common characteristics that influence their buying decisions.
Term
niche
 Definition
A narrowly defined group of potential customers with a fairly specific set of needs.
Term
market share
 Definition
A company's portion of the market that it has targeted.
Term
operations management
 Definition
Management of the process that transforms resources into products.
Term
project team
 Definition
Individuals from different functional areas assigned to work together throughout the product development process.
Term
product development process
 Definition
evaluate opportunities and select the best product idea, get feedback to refine the product concept, make sure the product performs and appeals to consumers, design with manufacturing in mind, build and test prototypes, ramp up production and run market tests, launch the product
Term
product concept
 Definition
A description of what a new product will look like and how it will work
Term
prototype
 Definition
A physical model of a new product
Term
ramp-up stage
 Definition
The stage in the product development process during which employees are trained in necessary production processes and new products are tested.
Term
patent
 Definition
A grant of the exclusive right to produce or sell a product, process, or invention. It is new, it is not obvious, it has utility.
Term
What are tangible services vs intangible services?
 Definition
Tangible products are things that can be touched or handled, such as automobiles and appliances. Service companies provide intangible products, such as banking, entertainment, or education.
Term
make-to-order
 Definition
A production method in which products are made according to customer specifications.
Term
mass production/make to stock strategy
 Definition
A production method in which high volumes of products are made at low cost and held in inventory in anticipation of future demand.
Term
mass customization
 Definition
A production method in which fairly high volumes of customized products are made at fairly low prices.
Term
capacity
 Definition
The maximum number of products that a facility can produce over a given period of time under normal working conditions.
Term
layout
 Definition
The arrangement of equipment, machinery, and people to make a production process as efficient as possible.
Term
process layout
 Definition
A layout that groups together workers or departments who perform similar tasks.
Term
product layout
 Definition
A layout in which produts are produced by epople, equipment, or departments arranged in an assembly line.
Term
cellular layout
 Definition
A layout in which teams of workers perform all the tasks involved in building a component, a group of related components, or a finished product.
Term
fixed-position layout
 Definition
A layout in which workers are moved to the product, which stays in one place.
Term
materials management
 Definition
All decisions pertaining to the purchase of input, the inventory of components and finished products, and the scheduling of production processes
Term
purchasing
 Definition
The process of acquiring materials and services to be used in production.
Term
electronic data interchange
 Definition
The computerized exchange of business transaction documents.
Term
inventory control
 Definition
Management of inventory to ensure that a company has enough inventory to keep operations flowing smoothly, but not so much tath money is being wasted in holding it.
Term
just-in-time production
 Definition
A system for reducing inventories and costs by requiring suppliers to deliver materials just in time to go into the production process.
Term
material requirements planning
 Definition
Technique of using a computerized program to calculate the quantity of materials needed for production and to schedule inventory ordering.
Term
 manufacturing resource planning
 Definition
A system for coordinating a firm's material requirements planning activites with the activities of its other functional areas.
Term
master production schedule
 Definition
A timetable that specifies which and how many products will be produced and when.
Term
Gantt chart
 Definition
A graphical tool for determining the status of projects.
Term
PERT chart
 Definition
A tool for diagramming the activities required to produce a product, specifying the time required to perform each activity in the process, and organizing activities in the most efficient sequence.
Term
CAD
 Definition
A system using computer technology to create models representing the design of a product.
Term
CAM - computer aided manufacturing
 Definition
A system using computer technology to control production processes and equipment.
Term
CIM - computer integrated manufacturing
 Definition
A system in shcih the capabilites of a CAD/CAM system are integrated with otehr computer - based functions
Term
product
 Definition
Something that can be marketed to customers because it provides a benefit and satisfies a need.
Term
Analyze ethical issues, social responsibility and government legislation that affect Canadian businesses
 Definition

  Business ethics is the application of ethical behaviour in a business context. It means obeying laws, being hones, doning o harm to others, competing fairly, and declining to put your own interest abouve those of your company, its owners, and its workers. Trustworthy companies are better at attracting and keeping customers, talented employees, and capital.

  Corporate social responsiblity deals with actions that affect a variety of parties in a company's environment. A socially responsible company shows concern for its stakeholders. If too many groups seea  company as a poor corporate citizen, it will have a harder time attracting qualified employees, finding investors, and selling its products. Good corporate citizens, on the other hand, are more successful in all these areas.

  The government influences economic activity through two approaches: monetary policy and fiscal policy. Through monetary policy, the government exerts its power to regulate the money supply and interest rate levels. Through fiscal policy, it uses its power to tax and spend.
Term

Differentiate between the various forms of Canadian business ownership.

 Definition

sole proprietorship - a business owned by only one person; unlimited liability

partnership(or general partnership) - A business owned jointly by two or more people; unlimited liability

limited partnership - a partnership made up of a single general partner (who runs the business and is responsible for its liabilities) and any number of limited partners; unlimited liability

corporation - a legal entity that is entirely separate from the parties who own it and is responsible for its own debts; limited liability
Term

Discuss the application of operations management to companies in the manufacturing sector and in the service sector.

 Definition

  The primary function of both manufacturers and service providers is to satisfy customers needs.

  Operations managers in manufacturing set out to transform resources into finished goods. They must produce a quality product in an efficient manner. They plan production by determining how goods will be produced, where production will take place, and how manufacturing facilities will be laid out. They schedule and monitor the activities that make up that process. They oversee the purchasing of raw materials and the handling of inventories and maintain quality control.

  Operations managers for the service sectorprovide intangible products that are often customized to satisfy the specific needs of a customer. Many services are bought and consumed at the same time and there is direct contact and interaction with customers. Operational efficiency is just as important.
Term
Discuss the importance of entrepreneurship and small business in Canada's economy.
 Definition
The vast majority of the 2.4 million business establishments in Canada are SMEs. These businesses generate roughly 50 percent of Canada's GDP. SMEs create jobs, spark innovation, and provide opportunities for many people to achieve financial success and independence. In addtion, SMEs complement the economic activity of large organizations by providing them with components, services and distribution of their products.
Term
Explain the functions of the Bank of Canada and the methods used to accomplish these functions.
 Definition
The Bank of Canada acts as the federal government's financial advisor and is responsible for promoting the economic and financial well-being of Canada. The Bank of Canada is empowered to take various actions that decrease or increase the money supply and raise or lower short-term interest rates, making it harder or easier to borrow money. It will use contractionary policy to decrease the money supply and raise interest rates if it believes inflation is a problem. To counter a recession, the Bank uses expansionary policy to increase the money supply and reduce interest rates.
Term
industry
 Definition
A group of businesses that compete with one another to market products that are the same or similar.
Term
market
 Definition
A group of buyers or potential buyers who share a common need that can be met by a certain product.
Term
market segment
 Definition
A group of potential customers with common characteristics that influence their buying decisions.
Term
niche
 Definition
A narowly defined group of potential customers with a fairly specific set of needs.
Term
market share
 Definition
A company's portion of the market that it has targeted.
Term
operations management (OM)
 Definition
Management of the process that transforms resources into products.
Term
product development
 Definition

 Effective product development results in goods and services that can be sold at a profit. In addition, it results in high-quality products that not only satisfy consumer needs, but that also can be developed in a timely and cost-efficient manner.  Representatives from different functional areas work together as a project team throughout the development process.

  The product devlopment process is a series of activities by which a product idea is transformed into a final product. There are seven steps: evaluate opportunities and select the best product idea, get feedback to refine the product concept, make sure the product performs and appeals to consumers, design with manufacturing in mind, build and test prototypes, ramp up production and run market tests, and launch the product.
Term
project team
 Definition
Individuals from different functional areas assigned to work together throughout the product development process.
Term
product development process
 Definition
The series of activities by which a product idea is transformed into a final product.
Term
product concept
 Definition
A description of what a new prodcut will look like and how it will work.
Term
prototype
 Definition
A physical model of a new product.
Term
ramp-up stage
 Definition
The stage in the product development process during which employees are trained in necessary production processes and new products are tested.
Term
patent
 Definition
A grant of the exclusive right to produce or sell a product, process, or invention.
Term
make -to - order strategy
 Definition
A production method in which products are made according to customer specifications.
Term
mass customization
 Definition
A prodcution method in which fairly high volumes of customized products are made at fairly low prices.
Term
capacity
 Definition
The maximum number of products that a facility can produce over ag iven period of time under normal working conditions.
Term
layout
 Definition
The arrangement of equipment, machinery, and people to make a production process as efficient as possible.
Term
process layout
 Definition
A layout that groups together workers or departments who perform similar tasks.
Term
product layout
 Definition
A layout in which products are produced by people, equipment, or departments arranged in an assembly line.
Term
cellular layout
 Definition
A layout in which teams of workers perform all the tasks involved in building a component, a group of related components, or a finished product.
Term
fixed-position layout
 Definition
A layout in which workers are moved to the produt, which stays in one place.
Term
materials management
 Definition
All decisions pertaining to the purchase of inputs, the inventory of components and finished product, and the scheduling of production processes.
Term
purchasing
 Definition
The process of acquiring materials and services to be used in production.
Term
electronic data interchange
 Definition
The computerized exchange of business transaction documents.
Term
inventory control
 Definition
Management of inventory to ensure that a company has enough inventory to keep operations flowing smoothly, but not so much that money is being wasted in holding it.
Term
manufacturing resource planning (MRP II)
 Definition
A system for coordinating a firm's material requirements planning activities with the activities of its other functional areas.
Term
Master Prodution Schedule (MPS)
 Definition
A timetable that speicifies which and how many products will be producted and when.
Term
computer-aided design
 Definition
A system using computer technology to create models representing athe design of a product.
Term
computer-aided manufacturing
 Definition
A system using computer technology to control production processes and equipment.
Term
quality
 Definition
The ability of a product to satisfy customer needs.
Term
total quality management
 Definition
All the steps taken by a company to ensure that its products satisfy customer needs.
Term
quality circle
 Definition
Employees who perform similar jobs and work as a team to identify quality, efficiency, and other work-related problems, to propose solutions, and to work with management in implementing their recommendations.
Term
continuous improvement
 Definition
A company's commitment  to making constant impromvements in the design, production, and delivery of its products.
Term
statistical process control (SPC)
 Definition
A technique for monitoring production quality by testing sample outputs to ensure that they meet specifications
Term
benchmarking
 Definition
The practice of comparing a company's own performance with that of a company that excels in the same activity
Term
outsourcing
 Definition
The practice of using outside vendors to manufacture all or part of a company's actual products.
Term
marketing
 Definition
A set of business practices designed to plan for and present an organization's products or services in ways that build effective customer relationships.
Term
marketing concept
 Definition
The basic philosophy of satisfying customer needs while meeting organizational goals.
Term
marketing strategy
 Definition
A plan for selecting a target market and creating, pricing, promoting, and distributing products that satisfy customers.
Term
target market
 Definition
The specific group of customers who should be interested in your product, have access to it, and have themeans to buy it.
Term
industrial market
 Definition
Buyers who want a product for use in making other products.
Term
market segment
 Definition
A group of potential customers with common characteristics thta influence their buying decisions
Term
demographic segmentation
 Definition
The process of dividing the market into groups based on such variables as age and income
Term
geographic segmentation
 Definition
The process of dividing a market according to such variables as climate, region, and population density.
Term
behavioural segmentation
 Definition
The process of dividing consumers by behavioural variables, such as attitude toward the product, user status, or usage rate.
Term
psychographic segmentation
 Definition
The process of classifying consumers on the basis of individual lifestyles as reflected in people's interestes, activities, attitudes, and values
Term
marketing mix
 Definition
The combination of product, price, place, and promotion (Often called the four Ps) used to market products.
Term
marketing research
 Definition
The process of collecting and analyzing data that is relevant to a specific marketing situation
Term
secondary data
 Definition
Information used in marketing decisions that has already been collected for other purposes.
Term
primary data
 Definition
Newly collected marketing information that addresses specific questions about the target market.
Term
focus group
 Definition
A group of individuals brought together for the purpose of asking them questions about a product or marketing strategy
Term
brand
 Definition
A word, letter, sound, or symbol that differentiates a product from similar products on the market
Term
trademark
 Definition
A word, symbol, or other mark used to identify and legally protect a product from being copied.
Term
private branding
 Definition
A product made by a manufacturer and sold to a retailer who in turn resells it under its own name.
Term
generic branding
 Definition
A product with no branding information attached to it except a description of its contents.
Term
manufacturer branding
 Definition
A branding strategy in which a manufacturer sells one or more products under its own brand names
Term
brand equity
 Definition
The value of a brand generated by a favourable consumer experience with a product
Term
brand loyalty
 Definition
Consumer preference for a particular brand that develops over time based on satisfaction with a company's products
Term
packaging
 Definition
The container that holds a product and can influence a consumer's decision to buy or pass it up
Term
labelling
 Definition
Information on the package of a product that identifies the product and provides details about the package contents
Term
skimming pricing
 Definition
A pricing strategy in which a seller generates early profits by starting off charging the highest price that customers will pay
Term
penetration pricing
 Definition
A pricing strategy in which the seller charges a low price on a new product to discourage competition and gain market share
Term
cost-based pricing
 Definition
A pricing strategy that bases the selling price of a product on its cost plus a reasonable profit
Term
demand-based pricing
 Definition
A pricing strategy that bases the price of a product on how much people are willing to pay for it
Term
target costing
 Definition
A pricing strategy that determines how much to invest in a product by figuring out how much customers will pay and by subtracting an amount for profit
Term
prestige pricing
 Definition
The practice of setting a price artificially high to foster the impression that it is a product of high quality
Term
odd-even pricing
 Definition
The practice of pricing products a few cents (or dollars) under an even number
Term
distribution
 Definition
All the activities involved in getting the right quantity of a product ot the right customer at the right time and at a reasonalbe cost
Term
intermediary
 Definition
A wholesaler or retailer who helps move products from their original source to the end user
Term
retailers
 Definition
Intermediaries who buy goods from producers and sell them to consumers
Term
wholesalers (distributors)
 Definition
Intermediaries who buy goods from suppliers and sell them to businesses that will eithere resell or use them
Term
profit margin
 Definition
The amount that a company earns on each unit sold
Term
physical distribution
 Definition
Activities needed to get a product from where it was manufactured to the customer
Term
storage warehouse
 Definition
A building used for the temporary storage of goods
Term
distribution centre
 Definition
A location where products are received from multiple suppliers, stored temporarily, and then shipped to their final destinations
Term
materials handling
 Definition
the process of physically moving or carrying goods during production, warehousing, and distribution
Term
just-in-time production
 Definition
A system for reducing inventories and costs by requiring suppliers to deliver materials just in time to go into the production process
Term
supply chain
 Definition
The flow that begins with the purchase of raw materials and ends in the sale of a finished product to an end user
Term
supply chain management (SCM)
 Definition
The process of integrating all the activities in the supply chain.
Term
radio frequency identification (RFID)
 Definition
A technology involving the use of small tags and readers to transmit and collect information about the location and status of inventory in the supply chain
Term
customer value triad
 Definition
Three factors that customers consider in determining the value of a product, quality, service, and price
Term
promotion mix
 Definition
Various ways to communicate with customers, including advertising, personal selling, sales promotion, and publicity
Term
advertising
 Definition
Paid, non-personal communication designed to create an awareness of a product or company
Term
personal selling
 Definition
One-on-one communication with customers or potential customers
Term
sales promotion
 Definition
A sales approach in which a company provides an incentive for potential customers to buy something
Term
publicity
 Definition
A form of promotion that focuses on getting a company mentioned in anewspaper, on TV, or in some other news media
Term
public relations
 Definition
Communication activities undertaken by companies to garner favourable publicity for themselves and their products
Term
customer relationship management
 Definition
A strategy for retaining customers by gathering information about them, understanding them, and treating them well.
Term
product life cycle
 Definition
Four stages that a product goes through over its life; introduction, growth, maturity, and decline
Term
external marketing environment
 Definition
Factors external to the firm that present threats and opportunities and require shifts in marketing plans.
Term
consumer behaviour
 Definition
The decision process that individuals go through when purchasing or using products
Term
advertising agency
 Definition
A marketing sonculting firm that develops and executes promotional campaigns for clients
Term
What is an industry?
 Definition
A group of businesses that compete with one another to market products that are the same or similar.
Term
What is a niche?
 Definition
A narrowly defined group of potential customers with a fairly specific set of needs.
Term
segmenting market
 Definition
Groups of potential customers with common characteristics that influence their buying decisions. Standard characteristics include: demographics (age, sex, income), geography (region, climate, city size), and psychographics (lifestyle, activities, interests).
Term
a good
 Definition
A product. Something you can actually touch.
Term
a service
 Definition
Intangible, but it still has value.
Term
direct competition
 Definition
Same customer and same good. Across the street.
Term
indirect competition
 Definition
substitution product. similar service. ex:  dry cleaner vs a wrinkle free shirt
Term
What is entrepreneurship and how do you define it?
 Definition
Entrepreneurs are innovators who start companies to create new or improved products. They strive to meet a need that is not currently being met, and their goal is to grow the business and eventually expand into other markets. An entrepreneur is an individual who identifies a business opportunity and assumes the risk of creating and running a business to take advantage of it.
Term
The functional areas of business are:
 Definition
management, operations, marketing, accounting and finance
Term
external forces that influence business activities:
 Definition
economy, government, consumer trends and public pressure
Term
Compare the value of each of the modes of starting a business.
 Definition
  • Start from scratch: advantages: maximum control over all business decisions; no past history to taint customer perceptions of the business. disadvantages: no track record upon which to base business projections; financing may be difficult to secure as the business is unproven

 

  • Buy an existing business. advantages: the business has a track record upon which to base projections for the future, the business has existing employees, suppliers, and customers, the existing owner may be willing to provide financing to the purchaser. disadvantages: difficult to place an accurate value on the business, the business may have problems that the previous owners did not disclose, previous owners may set up a competing venture

 

  • Buy a franchise. advantages: franchises can provide a proven "frmula" upon which the owner can rely, experts from the franchisor's head office can assist the new business owner with all issues relaed to the start-up and ongoing operations of the business. disadvantages: the franchisor's "formula" must be followed, even if the business owner does not agree with it, franchises can be expensive to buy and typically require that the franhisee make a significant up-front investment
Term

the three styles of management:

 

 Definition
autocratic, democratic and laissez faire
Term
IP commercialization
 Definition

1 - own manufacture

2 - sell the patent

3 - give limited rights to others

4 - license
Term
What is intellectual property?
 Definition

creations of the mind: inventions, literary and artistic works, symbols, names, images, and designs used in commerce.

IP rights are negative rights in that they give the holder the right to PREVENT others from using the IP in an infringing way.
Term
What are the most common types of intellectual property?
 Definition
patents, trade-secrets, trade-marks, industrial designs, and copyright
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