Business key terms

The extent to which people are in paid work in an economy; an employment rate expresses this as a proportion of a defined population.

A financial obligation owed by a business, such as a loan or an unpaid supplier’s invoice.

A person’s way of living, including their activities, interests and values.

Protection that limits shareholders’ financial responsibility for company debts to their investment in its shares.

The ability of a business to meet its short-term debts and expenses using money that is readily available.

Money borrowed and repaid over an agreed period, usually with interest.

Money borrowed by a business that must be repaid over an agreed period, usually with interest.

The individuals and organisations that live or operate in the area around a business.

The planning and management of the movement and storage of materials and goods, from suppliers through to the final customer.

The amount by which total costs exceed revenue.

A product deliberately sold below its cost to attract customers who may also buy other, profitable products.

A person responsible for organising business activities and directing employees to achieve business objectives.

The difference between actual or planned sales output and break-even output; it shows how far sales can fall before the business begins making a loss.

An arrangement through which buyers and sellers exchange goods or services. It can operate locally, nationally or internationally and does not need a physical meeting place.

Conditions affecting sales in a market, including customer demand, competition and customers’ sensitivity to prices.

Information about the market in which a business operates, such as its size, growth, competitors’ market shares and average incomes.

The increase in total sales across a market over time.

The business activities involved in identifying and satisfying customer needs and encouraging purchases.

Information collected through market research about customers and their responses to products, prices and promotion.

The combination of product, price, place and promotion that a business uses to meet customer needs and achieve its objectives.

A specific goal that a business wants its marketing activities to achieve, such as increasing awareness or attracting repeat purchases.

A plan for reaching target customers and achieving marketing objectives, implemented through a coordinated marketing mix.

A diagram that positions products or businesses against two characteristics so that their market positions can be compared.

How a product or business is perceived in relation to competing products or businesses.

The range of potential customers a business can access with its products.

Collecting information about customers’ needs, wants and preferences to help a business make decisions about its products and marketing.

A situation in which most potential customers who want a product already have it, leaving limited opportunities for further sales growth.

A group of customers within a market who share particular characteristics or similar needs.

Dividing a market into groups of customers with shared characteristics or similar needs, so a business can target them more effectively.

A business’s sales as a percentage of total sales in its market over the same period.