Page 367 - Cambridge IGCSE Business Studies

Glossary

Loss-leader pricing setting the price of a small number of Niche marketing developing products for a small segment of
products at below cost to attract customers into the outlet in the the market.
hope that they will buy other products priced to earn profi t. Non-current (fi xed) assets resources owned by a business
Manager an individual who is in charge of a certain group which will be used for a period longer than one year, for
of tasks, or a certain area or department of a business, for example buildings and machinery.
example Factory Manager. Non-current liabilities debts of the business which will be
Market all customers and consumers who are interested in payable after more than one year.

buying a product and have the financial resources to do so. Non-fi nancial rewards methods used to motivate workers that

Market-orientated products are developed based on consumer do not involve giving any fi nancial reward.
demand as identified by market research. Objective a statement of a specifi c target to be achieved. Th ey

Market research the process of collecting, recording and should be SMART.
analysing data about the customers, competitors and market Off -the-job training training that takes place away from the
for a product.
workplace, for example at college, university or specialist
Market segment a part of the whole market in which consumers training provider’s premises.
have specifi c characteristics. On-the-job training training at the place of work, watching or
Market segmentation dividing the whole market into segments following an experienced worker.
by consumer characteristics and then targeting diff erent
Opportunity cost the benefit that could have been gained from

products to each segment. an alternative use of the same resource.
Market share the revenue of a business expressed as a Ordinary shareholders the owners of a limited company.
percentage of total market revenue.
Organisational structure the formal, internal, framework of a
Market skimming setting a high price for a new product
business that shows how it is managed and organised.
that is unique or very different from any other product on

Overdraft an agreement with the bank which allows a business

the market.
to spend more money than it has in its account up to an
Marketing budget the amount of money made available by

agreed limit. The loan has to be repaid within 12 months. 365
a business for its marketing activities during a particular
Owner’s equity the amount owed by the business to its owners;
period of time.
includes capital and retained profi ts.
Marketing mix four marketing decisions needed for the
Partnership a business formed by two or more people who will

effective marketing of a product.
usually share responsibility for the day-to-day running of the
Marketing strategy a plan to achieve the marketing objectives
business. Partners usually invest capital in the business and
using a given level of resources.
will share profi ts.
Mass marketing selling the same product to the whole market.
Penetration pricing setting a low price to attract customers to
Micro-fi nance small amounts of capital loaned to entrepreneurs buy a new product.

in countries where business finance is oft en diffi cult to
Performance-related pay a bonus scheme used to reward staff
obtain. These loans are usually repaid after a relatively short

for performing above the required standard.
period of time where the owners have unlimited liability for
Person specifi cation a list of the qualifi cations, skills,
any debts of the business.
experience and personal qualities looked for in a successful
Middlemen these are the intermediaries in the channels of
applicant.
distribution, for example wholesalers and retailers.

Personal selling sales staff communicate directly with the
Mixed economy an economy where the resources are owned
consumer to achieve a sale and form a long-term relationship
and controlled by both the private and public sectors.

between the firm and consumer.
Mortgage long-term loans used for the purchase of land or
Persuasive advertising communication with consumers
buildings.
aimed at getting them to buy a firm’s product rather than a

Motivation the factors that influence the behaviour of workers competitor’s product.
towards achieving set business goals.
Piece-rate payment to workers based on the number of

Motivators the factors that influence a person to increase units produced.
their eff orts.
Pressure group organisations of like-minded people who put
Multinational company an organisation that has operations in pressure on businesses and the government to change their
more than one country. policies to reach a predetermined objective.
Need a good or service which is essential to living. Price the amount paid by the customer to the supplier when

Net cash fl ow cash inflow minus cash outfl ow. buying a good or service.