EDEXCEL A-Level Business - Theme 1 Test Questions with Complete Solutions

Added Value - Added value is the value of the finished output over and above the cost of achieving it i.e. the cost of inputs and transformations. Value can be added by manufacturing, branding, technology and a unique selling point. Calculated as: Selling price - cost of inputs - cost of transformation Advertising - A promotional method that involves the use of media to communicate with existing and potential consumers. Media used may be wide ranging from magazines and television to billboards and posters. Can be informative or persuasive but is designed to generate awareness and desire. Aesthetics - The element of the design mix that considers the look and the feel of the product as well as how our senses respond to the product. Combined with cost and function in new product development. Autocratic Leadership - The leader makes all of the decisions and informs subordinates. Subordinates are closely supervised and given little autonomy or authority. Decision making is centralised. Bias - A preference to hold a viewpoint that does not take into account all of the alternatives within a population. A statistic is biased if it is weighted towards a specific subgroup of a population. Bias may be caused due to the self interest of those undertaking the research. Bonus - The payment of a discretionary lump sum to an employee, normally based on predetermined criteria. Bonuses are a financial incentive, they can be: -Personal - based on performance e.g. following a review -Company - based on company performance e.g. year end results -Seasonal - based on manager's decision e.g. a Christmas bonus. Bonuses are not guaranteed and should be viewed as "one offs", however once employees have received them they may grow to expect them. Boston Matrix - A model used to analyse a firm's product portfolio by considering market share in relation to market growth for each product. It helps inform future marketing decisions. Products are classified as: -Rising Stars -Cash Cow -Problem Child -Dog Boston Matrix Diagram - Brand - A feature of a business or product that is recognised by customers and distinguishes it from competitors. Brand portrays an image to the customer and makes a promise as to what they can expect based on consistency and perception. Leads to brand loyalty whereby customers will continue to buy products from that firm.