Business Activity & Sectors (Unit 1.1 & 1.2)
What is the purpose of business activity?
To combine factors of production to satisfy customer needs by producing goods or services.
Give one characteristic of a successful entrepreneur.
Risk‑taking, initiative, creativity, determination, leadership
What is marketing?
Identifying and satisfying customer needs profitably.
What is primary research?
Research collected first‑hand by the business.
Name the 4Ps.
Product, Price, Place, Promotion.
Name the three economic sectors.
Primary, secondary, tertiary
Why is a business plan important?
Helps reduce risk and secure finance.
What is market share?
A firm’s sales as a percentage of total market sales.
Give one example of secondary research.
Market reports, government data, newspapers, existing studies
What is a product life cycle?
The stages a product passes through from introduction to decline.
What is added value?
The difference between the selling price and the cost of materials bought to make the product
Name one internal method of business growth.
Developing new products or entering new markets.
Define mass market.
A market selling to a large, broad group of customers with similar needs.
Why is sampling used?
Saves time and cost compared to surveying the whole population.
What is penetration pricing?
Setting a low price to enter a new market quickly.
Give one reason why added value is important.
It helps a business cover overheads and make profit.
What is horizontal integration?
Merging with or taking over a competitor in the same industry and stage of production.
Give one advantage of niche marketing.
Less competition; can charge higher prices.
Give one factor that reduces the accuracy of market research.
Poorly worded questions, outdated data, unrepresentative sample.
Give one advantage of e‑commerce to customers.
Convenience; ability to shop anytime.
What is opportunity cost?
The next best alternative given up when making a choice
Give one problem linked to business growth.
Diseconomies of scale, communication issues, loss of control, cash flow strain.
Give one reason consumer spending patterns may change.
Changes in income, tastes, technology, demographics, competition.
Give one advantage and one disadvantage of questionnaires.
Advantage: Cheap and quick. Disadvantage: Low response rate or inaccurate answers
Recommend a distribution channel for fresh vegetables and justify it.
Direct to consumer — ensures freshness and reduces time