1.1.1 Primary Research: First hand research which
has not been published. Collected from
questionnaires, interviews, surveys, etc.
1.1.2 Secondary Research - Research that has already been
published. e.g.from a website, newspaper, reports, etc.
1.1.3 Quantitative Data - Factual
information, e.g. Statistics
1.1.4 Qualitative Data - opinions
and views, e.g. how
1.1.5 A business conducts market research to help identify gaps in
the market and business opportunities.
1.2 Marketing is about responding to consumers'
needs. It is important to find out what these
needs are before launching a new product.
1.3 A market is any place where buyers and sellers
meet to trade or purchase products
1.4 Market Segments - different groups of customers
who share similar characteristics and buying habits
1.5.1 A competitive market has many
businesses trying to win the same
1.5.2 Price: If there are several retailers, each retailer will
lower the price in an attempt to win customers.
1.5.3 Product range: In order to attract and satisfy customers, companies
need to produce products that are superior to their competitors.
1.5.4 Customer service: Retailers that provide customers
with a helpful and friendly service will win their loyalty.
2 Structuring a business
2.1 One method of organisation is to set up departments
covering the four main areas of business activity:
2.1.2 Human resources
2.2 Managers need to organise their staff and
keep them motivated
2.3 Key terms:
2.3.1 Hierarchy - refers to the management levels
within an organisation.
2.3.2 Line managers - are responsible for
overseeing the work of other staff.
2.3.3 Subordinates - report to other staff higher up the hierarchy.
Subordinates are accountable to their line manager for their actions.
2.3.4 Authority - refers to the power managers
have to direct subordinates and make
2.3.5 Delegation - when managers entrust tasks
or decisions to subordinates.
2.3.6 span of control - measures the number of
subordinates reporting directly to a manager.
2.3.7 chain of command - the path of authority along which
instructions are passed, from the CEO downwards
2.4 Types of organistaions/ Structures
2.4.1 Tall organisations have many levels of hierarchy. The span of control
is narrow and there are opportunities for promotion. Lines of
communication are long, making the firm unresponsive to change.
2.4.2 In centralised organisations, the majority of decisions are taken by
senior managers and then passed down the organisational hierarchy.
2.4.3 Flat organisations have few levels of hierarchy. Lines of
communication are short, making the firm responsive to
change. A wide span of control means that tasks must be
delegated and managers can feel overstretched.
2.4.4 Decentralised organisations delegate authority down the chain of
command, thus reducing the speed of decision making.
3.1 Companies need to motivate workers in order to get
them to work harder for them
3.2 Ways to motivate:
3.2.1 Job enrichment : staff are given more interesting
and challenging tasks.
3.2.2 Empowerment : staff are given the authority to make
decisions about how they do their job.
3.2.3 Putting groups of workers in a team who are responsible
together for completing a certain task.
3.2.4 Fringe benefits: are payments in kind, eg a company car
or staff discounts.
3.2.5 Increase Pay slightly
3.2.6 Performance related pay: staff get a bonus
for meeting a target set by their manager.
3.3 Maslows' Hierarchy of needs (above) Explains why people work and if they are given these
things it will motivate them in other ways than pay rise
4.1 A stakeholder is anyone with an interest in a business. Stakeholders are individuals, groups or
organisations that are affected by the activity of the business.
4.2.1 Owners who are interested in how much profit the business makes.
4.2.2 Customers who want the business to produce quality
products at reasonable prices.
4.2.3 Managers who are concerned about their salary.
4.2.4 Workers who want to earn high wages and keep their jobs.
4.2.5 Lenders who want to be repaid on time and in full.
4.3 Internal stakeholders are groups within a business - eg owners and workers.
External stakeholders are groups outside a business - eg the community.
5.1 Working ethically means acting in ways that are
both fair and honest.
5.2 Ethical firms also carefully consider the implications of what they are
doing and the effect it might have on the community and the environment.
5.3 Ethical behaviour requires firms to act in ways that
stakeholders consider to be both fair and honest
5.4 Many owners believe that acting ethically increases costs and so
reduces profits. e.g. child labour reduces costs but is unethical.
5.5 Pressure groups are organisations set up to try to influence what
we think about the business and its environment.
5.6 A pressure group can challenge and even change the
behaviour of a business by: