Stuvia-8050134-business-english-woordenlijst-topic-2-production-and-marketing-1e-jaar-bedrijfsmanagement.pdf

# Manufacturing and service industries This section details the distinct characteristics and sub-sectors within both manufacturing and service industries, providing a foundational understanding of their operations and terminology. ### 1.1 Manufacturing industries Manufacturing industries, also referred to as the manufacturing sector, are characterized by the production of materials and goods. This sector encompasses a wide array of specific industries [3](#page=3): * **Aerospace:** Production of planes and space vehicles [2](#page=2). * **Automobiles (Cars):** Manufacturing of vehicles [2](#page=2). * **Computer hardware:** Creation of computers, printers, and related physical components [2](#page=2). * **Construction:** Building of structures [2](#page=2). * **Defence (Defense):** Production of weapons [2](#page=2). * **Electronics:** Manufacturing of devices such as mobile phones [2](#page=2). * **Food processing:** Production of canned, frozen, and other processed food items [2](#page=2). * **Household goods:** Manufacturing of items like washing machines and refrigerators [2](#page=2). * **Pharmaceuticals:** Production of medicines [2](#page=2). * **Steel:** Production of a strong metal used in machinery and car manufacturing [2](#page=2). * **Textiles:** Production of cloth and clothing [2](#page=2). #### 1.1.1 Types of manufacturing industries Industries can be further categorized based on their scale and type of production: * **Emerging industries:** Industries in their initial stages of development [3](#page=3). * **Growth industries:** Industries experiencing rapid expansion [3](#page=3). * **Light industries:** Industries producing small consumer goods (Business-to-Consumer - B2C), such as food, textiles, and electronics [3](#page=3). * **Heavy industries:** Industries producing large, heavy articles and materials in bulk (Business-to-Business - B2B), including aerospace, shipbuilding, and mining [3](#page=3). #### 1.1.2 Manufacturing processes and terminology Key terms related to manufacturing processes include: * **Workshop:** A place where goods are manufactured or repaired [8](#page=8). * **Hand-made:** Products created by hand, not by machines [8](#page=8). * **Craft industry:** An industry focused on making products by hand by skilled craftspeople [8](#page=8). * **Labour-intensive:** A process that requires a significant amount of work [8](#page=8). * **Assembly line (production line):** A factory system where products move on a belt past workers or robots performing repetitive tasks [8](#page=8). * **Manufacturing plant (factory, works):** A building where goods are produced [8](#page=8). * **To churn out:** To produce large amounts of something [8](#page=8). * **Industrial robots:** Machines used in factories for repetitive production tasks [8](#page=8). * **Cost-effective:** Producing a large volume in relation to the cost [8](#page=8). * **Output:** The quantity or type of things a company produces [8](#page=8). * **Productivity:** A measure of output relative to the number of employees [8](#page=8). * **Capacity:** The maximum amount a company can produce [9](#page=9). * **Working at full capacity:** Producing the maximum possible amount [9](#page=9). * **Overcapacity (excess capacity, spare capacity, surplus capacity):** Having more production capacity than is required [9](#page=9). * **Overproduction:** Producing more goods than there is demand for [9](#page=9). * **Surplus (glut):** An excess amount of something left over after production [9](#page=9). * **Shortage:** When not enough goods are being produced [9](#page=9). > **Tip:** Understanding the distinction between capacity and overcapacity is crucial for analyzing a company's efficiency and market position. #### 1.1.3 Inputs in manufacturing Inputs are the resources used in a production process [9](#page=9): * **Raw materials:** Basic materials from which other things are made, such as plastic or steel [9](#page=9). * **Component (part):** An element of a larger whole [9](#page=9). * **Labour:** Workers and managers involved in production [9](#page=9). * **Capital:** Money invested in the business [9](#page=9). * **Knowledge:** Information and skills applied to production [9](#page=9). * **Work-in-progress (work in process):** Products that are not yet finished [9](#page=9). * **Goods:** Materials, components, or finished products intended for sale [9](#page=9). * **Finished goods:** Products that are completed and ready for sale [9](#page=9). * **Stocks (inventories):** All products or materials stored for future use or sale [9](#page=9). #### 1.1.4 Suppliers and outsourcing * **Manufacturing operation:** The process of making products in a factory [10](#page=10). * **Supplier (outside supplier):** A company that provides materials and components to another company [10](#page=10). * **Partner:** A company collaborating with another [10](#page=10). * **Subcontracting (outsourcing):** Hiring another company to perform part of the work or services [10](#page=10). * **In-house:** Work performed within the company [10](#page=10). #### 1.1.5 Just-in-time (JIT) and Lean Production * **Just-in-time (JIT):** A strategy to receive goods only when they are needed [10](#page=10). * **Lean production (lean manufacturing):** A method to minimize waste and maximize production efficiency [10](#page=10). * **Efficient:** Performing tasks quickly, cheaply, and without waste [10](#page=10). #### 1.1.6 Manufacturing defects and recalls * **Design defect (design fault, design flaw):** A mistake in a product's design that could make it dangerous [6](#page=6). * **To recall:** To ask customers to return a product with defects for correction [6](#page=6). ### 1.2 Service industries Service industries, also known as the service sector, provide intangible goods or services rather than physical products. This sector includes a diverse range of operations [2](#page=2): * **Call centres:** Handling customer orders and complaints via phone [2](#page=2). * **Catering:** Services offered by restaurants and bars [2](#page=2). * **Computer software:** Providing instructions for computers [2](#page=2). * **Financial services:** Banking, insurance, and investment services [2](#page=2). * **Healthcare:** Medical care and related services [2](#page=2). * **Leisure:** Activities such as cinemas and sports [2](#page=2). * **Media:** Production and distribution of books, newspapers, film, and television content [2](#page=2). * **Property (real estate):** Buying, selling, and managing buildings [2](#page=2). * **Retail:** Selling goods and services directly to consumers [2](#page=2). * **Telecommunications:** Phone and internet services [2](#page=2). * **Tourism:** Travel and holiday services [2](#page=2). #### 1.2.1 Key concepts in service industries * **Consumers:** Individuals who buy products and services for their own use [13](#page=13). * **Customers:** People who buy products and services [12](#page=12). * **Clients:** Individuals or organizations buying professional services (e.g., from accountants or lawyers) [12](#page=12). * **Users:** Anyone who uses a product or service [13](#page=13). * **End-users:** The final consumers who use a product or service for its intended purpose [13](#page=13). > **Tip:** The distinction between 'customer' and 'client' is often based on the nature of the service provided, with 'client' implying a professional relationship. ### 1.3 General Industry Terms Several terms apply to both manufacturing and service industries: * **Industry:** Refers to the production of materials and goods [3](#page=3). * **To industrialize:** To develop more factories and production in an area [3](#page=3). * **Diversified:** Having many different industries within an economy [3](#page=3). * **Economy:** The system of how a country or region produces, distributes, and consumes goods and services [3](#page=3). * **Market:** The people and organizations that buy or might buy a particular product or service [14](#page=14). * **Market growth:** An increase in the number of buyers for a product/service or in the number of products sold [14](#page=14). * **Market segment:** A group of potential customers with similar needs, age, education, etc. [14](#page=14). * **Market segmentation:** The process of dividing all potential customers into groups [14](#page=14). * **Market share:** A company's sales relative to the total sales in a particular market [14](#page=14). * **Market leader:** The company with the highest sales in a market [15](#page=15). * **Competitor (rival):** A company operating in the same market with similar offerings [15](#page=15). * **Competition:** The activity of trying to sell more and be more successful than other companies [15](#page=15). * **Key player:** One of the most important companies in a market [15](#page=15). * **Marketing:** The process of planning, designing, pricing, promoting, and distributing goods/services to satisfy customer needs profitably [15](#page=15). * **Marketing mix (the four Ps: Product, Price, Place, Promotion):** The combination of activities required for successful selling [16](#page=16). * **Market orientation:** A business strategy focused on meeting market needs [17](#page=17). --- # Product development and innovation This topic delves into the systematic processes of understanding market needs, creating new products, and fostering innovation while safeguarding intellectual creations. ### 2.1 Market research Market research is the process of discovering what customers truly desire. It involves gathering information to understand consumer needs and preferences [3](#page=3). #### 2.1.1 Methods of market research Various methods can be employed to conduct market research: * **Surveys:** A systematic way to collect information by asking individuals questions [3](#page=3). * **In-person survey:** Direct, face-to-face interaction with participants [3](#page=3). * **Telephone survey:** Conducting surveys by calling individuals [3](#page=3). * **Mail survey:** Sending surveys via post and receiving them back [3](#page=3). * **Online survey:** Administering surveys over the internet [3](#page=3). > **Tip:** Low response rates can be a challenge with some survey methods, meaning few people actually answer [4](#page=4). * **Focus group:** A market research technique where a group of people discusses their attitudes and feelings about a product, service, advertisement, or idea. A moderator leads the discussion [3](#page=3) [4](#page=4). * **Personal interview:** A one-on-one conversation to gather detailed information [3](#page=3). * **Observation:** Watching consumers in action, whether by videoing them in stores, observing them at work, or how they use a product at home [3](#page=3). * **Field trial:** Introducing a new product in select stores to gauge customer response under actual selling conditions [3](#page=3). #### 2.1.2 Sampling * **Sample:** A smaller group selected to represent a larger population in a study or survey [4](#page=4). * **The pool:** The group of individuals chosen for a survey or study [4](#page=4). ### 2.2 Product development and launch This section outlines the stages and roles involved in bringing a product to market. #### 2.2.1 Key roles and stages * **Developer:** A person responsible for creating or enhancing new products. This includes roles like software developers [4](#page=4). * **Designer:** A professional who creates the look and functionality of a product. Examples include car designers [4](#page=4). * **Researcher:** An individual who investigates a topic to discover new information [4](#page=4). * **Laboratory:** A facility dedicated to scientific research or testing [4](#page=4). #### 2.2.2 Product versions and introduction * **Beta version:** The initial version of a product used for testing purposes; also known as a prototype [4](#page=4). * **Rollout:** The gradual introduction of a product into the market, often to test consumer reaction [4](#page=4). * **To release:** To officially make a product available to the public [4](#page=4). * **Product launch:** The specific moment when a product becomes officially available for purchase [4](#page=4). #### 2.2.3 Testing and quality assurance * **To try it out:** Synonymous with testing or trialling a product before its release to ensure it functions correctly [4](#page=4). * **Trial:** The process of testing the effectiveness of something, such as new drugs before release, or a product in development. This can also refer to clinical trials [4](#page=4). * **Bugs:** Problems or defects found within a product [4](#page=4). * **Design defect (design fault, design flaw):** A mistake in a product's design that could render it unsafe for consumers, such as a table with uneven legs [6](#page=6). * **To recall:** The action of asking customers to return a product due to design defects so the issue can be rectified [6](#page=6). * **Effective:** Describes something that functions well and achieves its intended purpose [6](#page=6). * **Producing on an industrial scale:** Manufacturing something in very large quantities [6](#page=6). ### 2.3 Innovation and invention Innovation and invention are key drivers of progress, supported by research and technology. #### 2.3.1 Concepts of innovation and invention * **Research and development (R&D):** The comprehensive set of activities a company undertakes to innovate [6](#page=6). * **Innovative:** Characterized by being new, original, and advanced [6](#page=6). * **Breakthrough:** A significant discovery or development; also known as an innovation [6](#page=6). #### 2.3.2 Technology and its advancement * **Technology:** The application of scientific knowledge to create tools and solutions [6](#page=6). * **Cutting edge (leading edge):** Refers to products that are superior to those of competitors [6](#page=6). * **State-of-the-art:** Utilizes the most advanced available techniques and resources [6](#page=6). * **Hi-tech:** Employs the most advanced and developed machinery and methods for product creation [7](#page=7). * **Low-tech:** Uses simpler or less advanced machinery and methods for product creation [7](#page=7). #### 2.3.3 Product lifecycle and obsolescence * **Obsolete:** No longer in use or necessary, typically because a newer, superior alternative has emerged [7](#page=7). * **Future-proof:** Designed to remain functional and relevant in the future without requiring modifications [7](#page=7). ### 2.4 Patents and intellectual property Protecting creations is vital for companies and individuals. #### 2.4.1 Forms of intellectual property * **Proprietary:** Information or knowledge that belongs exclusively to an individual or company [7](#page=7). * **Patent:** A legal right granting exclusive authority to make or sell an invention [7](#page=7). * **Licence (license):** Permission granted to use something legally. Companies may pay to use a design under a license [7](#page=7). * **Under licence:** Operating according to a granted permission [7](#page=7). * **To license (to):** The act of granting permission for use [7](#page=7). * **Royalty:** A payment made for the use of another's property, such as music or books [7](#page=7). * **Copyright:** The exclusive legal right of a creator to publish and reproduce their work [7](#page=7). * **Copyright infringement:** The unauthorized use of copyrighted material [7](#page=7). * **Piracy:** The overall activity of using texts, images, designs, or copying products without obtaining permission [7](#page=7). * **Illegal downloading:** Making an unauthorized copy of digital content, such as music, from an internet site [7](#page=7). * **Fake:** Not genuine or real [7](#page=7). * **Brand name:** The distinctive name given to a product by its manufacturer [7](#page=7). * **Trademark:** A symbol or name that is recognizable and used on a product [7](#page=7). * **Intellectual property:** The legal domain concerned with patents, copyrights, and trademarks [7](#page=7). --- # Business philosophies and market strategies This section explores contemporary business philosophies that challenge traditional mass production and market strategies that leverage diverse market segments and competitive analysis. ### 3.1 Business philosophies #### 3.1.1 Mass customization Mass customization is a production method that blends mass production with individualized product creation. It involves producing a large number of similar products that are then tailored to the specific requirements of each buyer. This approach contrasts with mass production, which focuses solely on producing high volumes of identical items, and custom-built products, which are made entirely to order. The key is to meet customer specifications, which are defined as the features a product must possess to satisfy the buyer. Standardization, the process of ensuring consistent quality, appearance, and function, is a foundational element that allows for efficient customization [10](#page=10) [11](#page=11). > **Tip:** Mass customization aims to achieve the cost efficiencies of mass production while offering the personalization desired by individual customers. #### 3.1.2 Wikinomics Wikinomics represents a paradigm shift in business by enabling mass collaboration through the internet. This philosophy involves large numbers of people working together online to solve problems and develop products. A key concept within wikinomics is the "prosumer," a consumer who actively participates in designing or customizing products for their own needs. Mass collaboration, characterized by independent contributions from many individuals to a single project (like Wikipedia), is a defining feature. This is further supported by peer collaboration, where individuals of equal standing work together, and co-creation, a process where companies and customers collaborate to develop products or solutions [11](#page=11). > **Example:** Wikipedia is a prime example of mass collaboration, where millions of users contribute to creating and editing content. ### 3.2 Market strategies #### 3.2.1 The long tail The "long tail" is a business model that diverges from the traditional focus on high-volume sales of a few popular items. Instead, it emphasizes selling low volumes of specialized products to a large number of niche customers. This strategy relies on the existence of a vast catalogue of items from which customers can choose. While traditional models benefited from economies of scale, where the cost per unit decreases with increased production the long tail model can thrive even without significant economies of scale, as the sheer diversity of niche products can collectively generate substantial revenue. Conversely, diseconomies of scale occur when producing too much leads to increased per-unit costs. The concept of the learning curve, or experience curve, suggests that as manufacturers produce more, they become more efficient, leading to cheaper products [11](#page=11) [12](#page=12). > **Tip:** Online platforms with vast inventories, such as e-commerce sites and streaming services, are well-suited to implementing the long tail strategy. #### 3.2.2 Benchmarking Benchmarking is a strategic self-assessment tool where companies compare their performance against industry leaders to identify areas for improvement. The goal is to identify "best practices," which are the most effective ways to perform a specific task. This process can involve significant collaboration and the sharing of information, though industrial secrets—confidential information providing a competitive advantage—must be protected. Benchmarking can drive ambitious goals, such as aiming "to halve" a particular metric, like the number of workers required [12](#page=12). > **Example:** A car manufacturer might benchmark its assembly line efficiency against a competitor known for its rapid production times to identify potential improvements. --- # Marketing, pricing, and distribution This topic delves into the fundamental components of bringing products and services to market, encompassing the strategic elements of marketing, how products are priced, and the methods by which they reach consumers [15](#page=15) [16](#page=16) [17](#page=17) [18](#page=18) [19](#page=19) [20](#page=20) [21](#page=21). ### 4.1 Marketing Marketing is defined as the process of planning, designing, pricing, promoting, and distributing goods and services with the ultimate goal of profitably satisfying customer needs. It involves identifying future needs, developing products, setting prices, informing customers, and making products available. A core concept is the marketing concept, which centers on meeting customer needs by offering products as solutions to their problems. Companies often have a dedicated marketing department responsible for these activities [15](#page=15). #### 4.1.1 The four Ps of marketing The marketing mix, also known as the four Ps, represents the key activities a company must successfully combine to achieve sales [16](#page=16). * **Product:** Deciding what to sell [16](#page=16). * **Price:** Determining the prices to charge for products and services [16](#page=16). * **Place:** Deciding how products will be distributed and where customers will purchase them [16](#page=16). * **Promotion:** Determining how products will be supported through advertising, special activities, and other communication efforts [16](#page=16). While traditionally four Ps, 'packaging' is sometimes considered a fifth P, referring to the materials used to protect and present a product before sale. A marketing plan outlines how a new product or service can be realized. A marketer is a person who works in marketing [16](#page=16). > **Tip:** Understanding the interplay of the four Ps is crucial for developing an effective marketing strategy. #### 4.1.2 Market orientation Market orientation signifies that all marketing activities are designed to meet market needs. Companies that are market-oriented, also known as market-led or market-driven, focus on fulfilling customer needs [17](#page=17). #### 4.1.3 Products and brands **Products** are the items offered for sale. They possess features, which are important characteristics and qualities that offer benefits to consumers. A product can be categorized as industrial goods (bought by other companies for their operations) or consumer goods (bought by individuals for personal use). Consumer durables are consumer goods with a long lifespan, such as cars, while fast-moving consumer goods (FMCG) are sold quickly and relatively cheaply, like food items [15](#page=15) [17](#page=17). > **Example:** A car is a consumer durable, whereas bread is a fast-moving consumer good (FMCG). **Brands** are names given to products by companies. The concept of branding involves creating brands and maintaining them in customers' minds through various marketing efforts. Brand awareness, or recognition, measures how well people know a particular brand. Brand image encompasses all the ideas people associate with a brand. Brand identity refers to the set of qualities that distinguish a brand from others [17](#page=17). * **Product positioning:** How a product is perceived by consumers relative to other products [17](#page=17). * **Product placement (PP):** Paying for products to be featured in media like films and TV shows [17](#page=17). * **Generic products:** Unbranded products sold at a lower price, identical to branded versions [18](#page=18). * **Own-brand products (own-label, store brands):** Products sold by a retailer under its own name, often at a lower price than manufacturer brands [18](#page=18). A company's total collection of products is its product mix or product portfolio. A product line or product range consists of products of a particular type. The product lifecycle describes the stages a product goes through from introduction to decline, along with its sales volume at each stage [16](#page=16). ### 4.2 Pricing Pricing strategies are fundamental to a company's profitability and market positioning [18](#page=18). #### 4.2.1 Pricing strategies * **Low-pricing:** A continuous strategy of charging low prices [18](#page=18). * **High pricing:** A continuous strategy of charging high prices [18](#page=18). * **Mid-priced:** Products that are neither very cheap nor very expensive [18](#page=18). #### 4.2.2 Pricing terminology * **To charge:** To ask a specific price for a product or service [18](#page=18). * **Loss-leader:** A product sold at a loss to attract customers [18](#page=18). * **List price (recommended retail price):** The price a retailer is advised to charge by the manufacturer [18](#page=18). * **To discount:** To reduce the price of a product or service [18](#page=18). * **To undercut:** To sell a product at a lower price than a competitor [18](#page=18). #### 4.2.3 Price-related terms * **Price boom:** Rapidly rising prices, benefiting sellers [18](#page=18). * **Price controls:** Government interventions to limit price increases [18](#page=18). * **Price cut:** A reduction in price [18](#page=18). * **Price hike:** An increase in price, often viewed negatively by buyers [18](#page=18). * **Price war:** Competing companies repeatedly reduce prices in response to each other [18](#page=18). * **Price tag:** A label indicating the price of an item [19](#page=19). #### 4.2.4 Market segments based on price and quality Products can be categorized along different market segments: * **Basic:** Minimal features, often low-priced [19](#page=19). * **Sophisticated:** Advanced features, often high-priced [19](#page=19). * **Exclusive:** Unique, high-quality, limited availability, very expensive [19](#page=19). * **Low-end/bottom-end:** Cheap, basic, low quality [19](#page=19). * **High-end/top-end:** Expensive, advanced, high quality [19](#page=19). * **Entry-level:** Designed for beginners or first-time users [19](#page=19). * **Premium:** Designed for experienced users or those with significant disposable income [19](#page=19). * **Mid-range:** Moderate quality and price, positioned between basic and sophisticated [19](#page=19). Companies may encourage consumers to **trade up** (move upmarket/upscale) to more sophisticated products or **trade down** (move downmarket/downscale) to simpler alternatives [19](#page=19). #### 4.2.5 Market types * **Mass market:** The market for goods produced in large quantities, such as family cars [19](#page=19). * **Niche:** A specific group of buyers with unique requirements that may be profitable for specialized companies, such as sports cars [19](#page=19). ### 4.3 Distribution Distribution refers to the methods and channels used to make products and services available to consumers [15](#page=15). #### 4.3.1 Distribution channels and intermediaries * **Wholesaler:** Sells goods in large quantities at low prices, typically to retailers [20](#page=20). * **Retailer:** Sells goods to the public in smaller quantities for personal use [20](#page=20). * **Dealer (reseller):** A wholesaler or retailer specializing in a particular product type [20](#page=20). * **Distributor (middleman):** Supplies products from producers to retailers or customers [20](#page=20). * **To cut out the middlemen:** Buying directly from the producer to save money [20](#page=20). * **Distribution channel:** The path taken by products from producer to end consumer [20](#page=20). #### 4.3.2 Types of shops Various retail outlets exist to serve different market needs: * **Shop (store, retail outlet):** A place where goods and services are sold [20](#page=20). * **Chain store:** A shop belonging to a group of identical shops [20](#page=20). * **Convenience store:** A small shop in a town with long opening hours [20](#page=20). * **Discounter:** A retailer offering very low prices [21](#page=21). * **Department store:** A very large shop, usually in a town centre [21](#page=21). * **Hypermarket:** A very large shop with a wide variety of goods, typically located outside town centres [21](#page=21). * **Supermarket:** A large shop, primarily selling food [21](#page=21). * **Shopping centre (mall):** An area or building containing multiple shops [21](#page=21). #### 4.3.3 Franchising A **franchise** is a business model where a company (the **franchisor**) allows others (the **franchisee**) to operate a store using its brand and business system [21](#page=21). #### 4.3.4 Direct marketing Direct marketing involves a company communicating directly with potential customers to promote products or services, often via mail, email, or phone [21](#page=21). * **Direct mail (junk mail):** Advertising sent via post or email, often unsolicited [21](#page=21). * **To target:** To focus efforts on a specific group [21](#page=21). * **Mailshot:** An advertisement sent to a large group by post [21](#page=21). * **Telemarketing:** Selling or advertising products by telephone [21](#page=21). * **Call centre:** An office handling customer support or sales calls [21](#page=21). * **Cold call:** An unsolicited sales call made without prior contact [21](#page=21). --- # E-commerce and online business E-commerce encompasses the digital marketplace for transactions, evolving through distinct phases and encompassing various business models [23](#page=23) [24](#page=24). ### 5.1 Models of e-commerce E-commerce can be categorized into several models based on the parties involved in the transaction: #### 5.1.1 Business-to-consumer (B2C) B2C e-commerce, also known as business-to-consumer e-commerce, involves the online sale of goods and services directly from a business to an end-consumer [24](#page=24). #### 5.1.2 Business-to-business (B2B) B2B e-commerce, or business-to-business e-commerce, refers to the online sale of goods and services from one business to another business. It is also known as e-procurement [24](#page=24). #### 5.1.3 Business-to-government (B2G) B2G e-commerce, or business-to-government e-commerce, involves the online sale of products and services from a company to a government entity [24](#page=24). ### 5.2 The evolution of the internet and selling The landscape of selling over the internet has evolved through distinct phases. #### 5.2.1 The dot-com era The initial phase of selling over the internet, characterized by rapid growth, culminated in the dot-com bust of 2001, which led to the bankruptcy of many internet-based businesses [24](#page=24). #### 5.2.2 Web 2.0 Web 2.0 represents the current, second phase of selling over the internet. This phase is characterized by increased interactivity and user-generated content, facilitated by: * **Social-networking sites:** Platforms like Facebook [24](#page=24). * **Video-sharing sites:** Platforms such as YouTube [24](#page=24). * **Blogs:** Online diaries maintained by individuals or organizations [24](#page=24). * **Collaborative sites:** Websites where users work together on projects, exemplified by Wikipedia [24](#page=24). ### 5.3 Operation of online businesses Several key terms and concepts are fundamental to understanding the operation of online businesses: #### 5.3.1 Hosting To host a website means to provide the necessary online space for it to be accessible to users [24](#page=24). #### 5.3.2 Commissions A commission is a percentage of money earned from sales [24](#page=24). #### 5.3.3 Auction sites and bidding * An auction site is an online platform where users can place bids on products to purchase them [24](#page=24). * A bid is an increasing offer made for an item [24](#page=24). * To bid means to place an offer [24](#page=24). * The highest bidder is the person who offers the most money for an item [25](#page=25). ### 5.4 Related business concepts Beyond the core e-commerce definitions, several related business terms are important: * **Shelf life:** This refers to the duration for which an item remains usable, fit for consumption, or saleable. Items can have a limited shelf life [25](#page=25). * **To merge:** This occurs when two companies combine to become a single entity [25](#page=25). * **A merger:** This is the outcome of two companies merging, essentially a fusion [25](#page=25). * **Acquisition:** This is when one company purchases another company [25](#page=25). > **Tip:** Understanding the distinctions between B2C, B2B, and B2G models is crucial for analyzing different market segments within e-commerce. > **Tip:** Web 2.0 concepts highlight the shift from static web pages to dynamic, interactive platforms, significantly impacting how businesses engage with consumers online. --- ## Common mistakes to avoid - Review all topics thoroughly before exams - Pay attention to formulas and key definitions - Practice with examples provided in each section - Don't memorize without understanding the underlying concepts

| Term | Definition | |------|------------| | Manufacturing sector | Industries involved in the production of goods from raw materials or components, transforming them into finished products. | | Service sector | Industries that provide intangible services rather than tangible goods, such as finance, healthcare, and tourism. | | Aerospace | The industry concerned with the design, development, manufacture, operation, and maintenance of aircraft and spacecraft. | | Automobiles | A self-propelled wheeled vehicle that does not run on rails and is used for the transport of people or goods. | | Computer hardware | The physical components of a computer system, such as the monitor, keyboard, and central processing unit (CPU). | | Pharmaceuticals | The branch of medicine and pharmacology concerned with the drugs used for medical treatment. | | Textiles | A type of material made when fibers or yarns are woven, knitted, or felted together, used for clothing and other items. | | Call centres | A department or company that handles customer service, sales, or other communications via telephone. | | Financial services | Professional services offered by a finance company or bank, including banking, investment management, and insurance. | | Healthcare | The maintenance and improvement of physical and mental health, especially through the provision of medical services. | | Leisure | Free time spent away from work or other duties, often engaged in for pleasure or recreation. | | Media | The main means of mass communication regarded collectively, such as television, radio, and newspapers. | | Property | Land or buildings, or other real estate, owned by a person or organization. | | Retail | The sale of goods to the public in relatively small quantities for use or consumption rather than for resale. | | Telecommunications | The transmission of information over significant distances by electronic means, such as telephone or internet. | | Tourism | The business of providing and arranging holidays and other periods of recreation. | | Industrialize | To develop industries in a country or region on a wide scale. | | Emerging industries | New industries that are in the early stages of development and growth. | | Growth industries | Industries that are expanding rapidly and are expected to continue to do so in the future. | | Light industries | Industries that produce small consumer goods, often for direct sale to consumers (B2C), such as food or electronics. | | Heavy industries | Industries that produce large, heavy articles and materials in bulk, often for other businesses (B2B), such as shipbuilding or mining. | | Diversified | Having many different types of industries or business activities. | | Economy | The state of a country or region in terms of the production and consumption of goods and services and the supply of money. | | Market research | The process of gathering information about the target market and consumers" needs and preferences. | | Survey | A method of collecting information from a sample of individuals by asking them questions. | | Focus group | A form of market research where a group of people is asked about their attitudes and feelings towards a product, service, or concept. | | Personal interview | A one-on-one conversation between an interviewer and a respondent to collect detailed information. | | Observation | The act of watching consumers in their natural environment to understand their behavior and product usage. | | Field trial | Placing a new product in selected stores or environments to test customer response under real-life selling conditions. | | Sample | A small group of individuals chosen to represent a larger population in a survey or study. | | Response rates | The percentage of people who participate in a survey or respond to a request for information. | | Developer | A person or company that makes or improves new products, especially in software or construction. | | Beta version | An early release of a product that is used for testing by a group of users before the final release. | | Rollout | The process of introducing a new product or service to the market gradually. | | Product launch | The official introduction of a new product into the market for sale. | | Bugs | Errors or faults in a computer program or system that prevent it from functioning correctly. | | Designer | A person who creates the look, feel, and functionality of a product. | | CAD/CAM | Computer-Aided Design (CAD) and Computer-Aided Manufacturing (CAM) use computers to assist in the design and production of products. | | Researcher | A person who conducts systematic investigation to establish facts or principles. | | Laboratory | A room or building equipped for scientific experiments, research, or teaching. | | Design defect | A flaw or mistake in the design of a product that could make it unsafe or unsuitable for its intended use. | | Recall | The act of requesting customers to return a product, usually due to a safety concern or defect. | | Research and development (R&D) | Activities undertaken by companies to innovate and introduce new products and services. | | Innovative | Featuring new methods; advanced and original. | | Breakthrough | A sudden, dramatic, and important discovery or development. | | Technology | The application of scientific knowledge for practical purposes, especially in industry. | | Cutting edge | The forefront of technological advancement; the most advanced stage of development. | | State-of-the-art | The most recent stage in the development of a particular product, technique, or piece of equipment. | | Hi-tech | Using or involving advanced technology. | | Low-tech | Using or involving simple or less advanced technology. | | Obsolete | No longer produced or used; out of date. | | Future-proof | Designed to remain effective or useful in the future. | | Proprietary | Relating to or denoting a trade name or patent. | | Patent | A government authority or license that gives an inventor the exclusive right to make, use, or sell an invention for a set period. | | Licence | A permit from an authority to own or use something, do a particular activity, or carry on a particular business. | | Royalty | A payment made to an owner of a patent, copyright, or resource for the use of it. | | Copyright | The exclusive legal right, given to an originator or an assignee to print, publish, perform, film, or record literary, artistic, or musical material, and to authorize others to do the same. | | Copyright infringement | The use of copyrighted material without permission from the copyright holder. | | Piracy | The unauthorized use or reproduction of patented or copyrighted material. | | Illegal downloading | The act of obtaining or sharing copyrighted digital material without legal permission. | | Fake | Not genuine; imitation or counterfeit. | | Brand name | The commercial name for a product or service. | | Trademark | A sign or name of a product legally registered and protected by law. | | Intellectual property | Creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. | | Product | An article or substance that is manufactured or refined for sale. | | Produce | Things that have been grown or made, especially in large quantities. | | Workshop | A room or building equipped for making or repairing things. | | Hand-made | Made by hand rather than by a machine. | | Craft industry | An industry in which products are made by hand by skilled workers. | | Labour-intensive | Requiring a large amount of work, especially manual labor, relative to the amount of capital used. | | Assembly line | A series of workers and machines in a factory along which a developing product moves as it is assembled. | | Manufacturing plant | A building or complex where goods are manufactured. | | To churn out | To produce something in large quantities, often in a routine or mechanical way. | | Industrial robots | Machines used in factories to perform repetitive or dangerous tasks in the production process. | | Cost-effective | Successful in producing the desired result without wasting time or money. | | Output | The amount of something produced by a person, machine, or factory. | | Productivity | The rate at which goods are produced or work is done. | | Capacity | The maximum amount that something can contain or produce. | | Working at full capacity | Operating at the maximum level of production or output possible. | | Overcapacity | A state where the production capacity of an industry or company exceeds the demand for its products. | | Overproduction | The production of more of something than is wanted or needed. | | Surplus | An excess of production or supply over demand. | | Shortage | A state or situation in which something needed cannot be obtained in sufficient amounts. | | Raw materials | Basic materials in the form found in nature, used to make products. | | Component | A part or element of a larger whole. | | Input | Anything put into a production process to be transformed into output. | | Labour | People considered collectively as a resource, especially in productive employment. | | Capital | Wealth in the form of money or other assets owned by a person or organization or available for a purpose such as starting a company or investing. | | Knowledge | Information, understanding, or skill acquired through experience or education. | | Work-in-progress | Products that are currently in the process of being manufactured but are not yet finished. | | Goods | Materials and components used to make products, or the products themselves produced for sale. | | Finished goods | Products that have been manufactured and are ready for sale. | | Stocks / Inventories | All the products or materials stored for later use or sale. | | Manufacturing operation | The process of making products in a factory. | | Supplier | A company that provides materials and components to another company. | | Partner | A company or organization that collaborates with another company. | | Subcontracting / Outsourcing | Hiring another company to perform specific tasks or services. | | In-house | Within the company; not contracted out. | | In stock | Available for immediate purchase or use. | | To finance | To provide funding for a person or enterprise. | | To store | To keep goods or materials in a warehouse or similar place for future use or sale. | | Warehouse | A large building where raw materials or manufactured goods are stored. | | To handle | To move or deal with something. | | Just-in-time | A production strategy where materials or goods are received only as they are needed in the production process. | | Lean production / Lean manufacturing | A method aimed at minimizing waste and maximizing efficiency in production. | | Efficient | Achieving maximum productivity with minimum wasted effort or expense. | | Mass production | The manufacture of large quantities of standardized products, often using assembly lines or automated technology. | | Mass customization | A production method where products are made in large quantities but tailored to individual customer specifications. | | Standard products | Products that are manufactured in a uniform way with few variations. | | Standardization | The process of implementing and developing technical standards based on the consensus of different parties. | | Custom built / Tailor-made products | Products that are built or made according to the specific order and requirements of a particular customer. | | Specifications | A detailed description of the design and materials needed to make something. | | Wikinomics | A theory describing the economic trends and principles of mass collaboration, open source, and crowdsourcing enabled by the internet. | | Prosumer | A consumer who also produces goods or services, often by participating in the design or customization of products. | | Mass collaboration | A form of collaboration where large numbers of people, often online, contribute independently to a single project. | | Peer collaboration | A form of collaboration where individuals of equal standing work together on a project. | | Co-creation | A collaborative process where companies and customers work together to develop new products or solutions. | | The long tail | A business model that focuses on selling small volumes of niche products to a large number of customers, rather than high volumes of popular items. | | Model | A representation of a system or process, or a way of doing things. | | Catalogue of items | A list of products or services available for sale, usually with descriptions and prices. | | Economies of scale | Cost advantages gained by increasing the scale of production. | | Diseconomies of scale | Disadvantages that arise when a company grows too large, leading to increased per-unit costs. | | Learning curve / Experience curve | The rate at which a person or organization gains skill or efficiency in performing a task through practice and experience. | | Benchmarking | A process of comparing a company's performance and practices with those of industry leaders to identify areas for improvement. | | Performance | The accomplishment of an action or task. | | Best practice | A method or technique that has consistently shown results superior to those achieved by other means. | | To halve | To reduce something by half. | | Collaboration | The action of working with someone to produce or create something. | | Industrial secret | Confidential information about a product or process that provides a competitive advantage. | | Customer | A person or organization that buys goods or services from a store or business. | | Client | A person or organization using the services of a lawyer or other professional person or company. | | Customer base | All the customers of a particular business. | | Client base | All the clients of a particular professional or company. | | Clientele | All the customers of a particular business or professional person, especially one who is regular. | | User | A person who uses or operates something, especially a computer or other machine. | | End-user | The final consumer who uses the product or service for its intended purpose. | | Consumer | A person who purchases goods and services for personal use. | | Buyer / Purchaser | A person or organization that buys something. | | Buying manager / Purchasing manager | A person in a company responsible for purchasing goods and services. | | Industrial buyer | An organization that buys goods or services to use in the production of its own goods or services. | | Seller | A person or organization that sells something. | | Vendor | A person or organization that sells goods or services. | | Street vendor | A person who sells goods in the street. | | Vending machine | A machine from which you can buy things by putting money into it. | | Market | A place or system where buyers and sellers meet to trade goods and services. | | Free market | An economic system where prices are determined by unrestricted competition between privately owned businesses. | | Market forces | Economic forces, like supply and demand, that determine prices and other market outcomes. | | Market pressures | The influence of consumer demand and competition on pricing and product development. | | Marketplace | A place where buyers and sellers meet; or the abstract environment for buying and selling. | | Market prices | The price at which goods or services are traded in a market. | | Market reforms | Changes made to an economy to make it more competitive and efficient. | | Market growth | An increase in the number of people who buy a particular product or service, or in the volume of sales. | | Market segment | A group of potential customers with similar needs, characteristics, or behaviors. | | Market segmentation | The process of dividing a broad consumer or business market into sub-groups of consumers (known as segments) based on some type of shared characteristic. | | Market share | The portion of a market controlled by a particular company or product, typically expressed as a percentage. | | Market leader | The company with the largest market share in a particular industry. | | Competitor / Rival | A company or individual that operates in the same market and offers similar products or services. | | Competition | The activity or condition of striving to gain or win something by defeating or holding off others. | | Key player | One of the most important companies or individuals in a particular market. | | Intense / Stiff / Fierce / Tough competition | Strong and active competition between companies. | | Low key competition | Competition that is not intense or aggressive. | | Marketing | The activity or business of promoting and selling products or services, including market research and advertising. | | To plan | To decide on and arrange in advance how something will be done. | | To design | To plan and make decisions about the appearance and structure of something before it is made. | | To price | To decide how much to charge for something. | | To promote | To further the progress of something; encourage or support. | | To distribute | To supply goods to stores and other businesses which then sell them to customers. | | Marketing concept | The idea that a company should focus on meeting customer needs and wants in order to achieve its own goals. | | Marketing department | The part of a company that is responsible for marketing activities. | | Features | A distinctive attribute or aspect of something. | | Benefit | An advantage or profit gained from something. | | Social marketing | The application of marketing principles to achieve social change. | | Product | A tangible item offered for sale. | | Price | The amount of money expected, required, or given in payment for something. | | Place | The location where a product is made available for sale or distribution. | | Promotion | Activities that increase awareness of a product or service and encourage sales. | | Packaging | The materials used to protect and present a product before it is sold. | | Marketing mix | The set of actions, or tactics, that a company uses to promote its brand or product in the market. | | To market a product | To carry out the activities involved in planning, promoting, and selling a product. | | Marketing plan | A document that outlines a company's marketing strategy for a specific period. | | Marketer | A person or company involved in marketing. | | Free marketeer | Someone who strongly believes in the principles of a free market economy. | | Black marketeer | A person who buys and sells goods illegally. | | Market orientation | A business philosophy that prioritizes understanding and meeting customer needs. | | Market-oriented / Market-led / Market-driven | Companies or products that focus on meeting customer needs and market demands. | | Product catalogue (catalog) | A list of a company’s products, often with descriptions and prices. | | Product mix / Product portfolio | A company’s collection of products, considered as a whole and in relation to each other. | | Product line / Product range | A group of products that are similar in type and marketed by the same company. | | Product lifecycle | The stages a product goes through from its introduction to the market until its decline. | | Product positioning | The way a product is perceived by consumers in relation to competing products. | | Product placement (PP) | The act of featuring a branded product in a film, television show, or other media. | | Industrial goods | Products purchased by other companies for use in their operations or to produce other goods. | | Consumer goods | Products purchased by individuals for their own use. | | Consumer durables | Consumer goods that are built to last and are used over a period of time, such as cars or appliances. | | Fast-moving consumer goods (FMCG) | Consumer goods that are sold quickly and relatively cheaply, such as food and toiletries. | | Brand | A name, term, design, symbol, or other feature that distinguishes an organization or product from its rivals in the eyes of the customer. | | Brand name | The unique name of a product given by its manufacturer. | | Make | The name of the manufacturer of a product. | | Model | A specific version or design of a product with particular features. | | Product category | A group of products that share similar characteristics or functions. | | Brand awareness / Brand recognition | The extent to which consumers are familiar with a particular brand. | | Brand image | The overall perception of a brand in the minds of consumers. | | Brand manager | A person responsible for managing a particular brand. | | Branding | The process of creating a unique name and image for a product in the consumers' perception. | | Branded | Having a brand name. | | Brand identity | The visible elements of a brand, such as color, design, and logo, that together identify and distinguish the brand in consumers’ minds. | | Generic product / Generic | A product that is not branded and is sold at a lower price, often as an alternative to a branded product. | | Own-brand product / Own-label product / Store brand | A product sold by a retailer under its own name, rather than the name of the manufacturer. | | Pricing | The process of determining the price for a product or service. | | Low-pricing | A strategy of consistently charging low prices for products. | | Low priced / Cheap | Costing little money. | | High pricing | A strategy of consistently charging high prices for products. | | High-priced / Expensive | Costing a lot of money. | | Mid-priced | Neither very cheap nor very expensive; in the middle range. | | To charge | To ask a particular amount of money for something. | | Loss-leader | A product sold at a loss to attract customers who will then buy other, more profitable products. | | List price / Recommended retail price | The price at which a manufacturer suggests a retailer should sell an item. | | To discount | To reduce the price of a product or service. | | Discount | A reduction in price. | | To undercut | To sell at a lower price than a competitor. | | Price boom | A period of rapid increase in prices. | | Price controls | Government regulations that limit the amount by which prices can increase. | | Price cut | A reduction in the price of a product or service. | | Price hike | An increase in price, often unexpected or unwelcome. | | Price war | A period of intense competition in which companies repeatedly lower prices to gain market share. | | Price tag | A label attached to goods, showing the price. | | Model | A specific version or design of a product. | | Basic | Having few or no features; fundamental. | | Sophisticated | Having, revealing, or involving a great deal of worldly experience and knowledge of fashion and culture. | | Exclusive | Limited to the person or people intended; restricted. | | Low-end / Bottom-end | Products that are cheap, basic, and of low quality. | | High-end / Top-end | Products that are expensive, advanced, and of high quality. | | Entry-level | Designed for beginners or first-time users. | | Premium | Of superior quality and condition; higher than average. | | Mid-range | Having moderate quality and price, positioned between basic and sophisticated. | | To trade up / To move upmarket | To buy something more sophisticated or of higher quality to replace a basic model. | | To trade down / To move downmarket | To buy something simpler or of lower quality to replace a more advanced model. | | To take something downmarket | To make something more accessible and affordable, often by reducing its perceived quality or features. | | To take something upmarket | To make something more exclusive and high-end, often by enhancing its perceived quality or features. | | Mass market | The market for products produced in large quantities and aimed at the general public. | | Niche | A specialized segment of the market for a particular kind of product or service. | | Wholesaler | A person or company that sells goods in large quantities at low prices, typically to retailers. | | Retailer | A person or company that sells goods to the public in relatively small quantities for use or consumption. | | Dealer | A person or company that buys and sells goods, especially in the motor trade or with a particular type of product. | | Distributor | A person or company that supplies products from producers to retailers or customers. | | To cut out the middlemen | To buy or sell directly from the producer, bypassing intermediaries. | | Distribution channel | The path or system through which goods and services are passed from producers to consumers. | | Shop / Store / Retail outlet / Sales outlet | A place where goods and services are sold. | | Chain store | A retail store that is part of a group of shops under the same ownership. | | Convenience store | A small shop, typically in a residential area, selling a limited range of everyday items. | | Discounter | A retailer that sells goods at low prices. | | Department store | A large retail establishment selling a wide variety of goods. | | Hypermarket | A very large store, usually on the outskirts of a town, selling a wide variety of goods. | | Supermarket | A large self-service retail store selling foods and household goods. | | Shopping centre / Shopping mall / Mall | A group of shops and services with the buildings and car parks around them. | | Franchise | A business model where a company grants a license to others to operate a business using its brand and system. | | Franchisee | A person or company that buys the rights to operate a franchise store. | | Franchisor | A company that owns the brand and business model and grants franchises to franchisees. | | Direct marketing | A strategy where companies communicate directly with potential customers to promote products or services. | | Mailing / Direct mail | Information sent to potential customers through the postal service. | | Junk mail | Unsolicited or unwanted advertising material sent through the post or email. | | To target | To aim or direct efforts towards a specific group or objective. | | Mailshot | A single mailing of advertising material to a large number of people. | | Telemarketing | The sale of goods or services by telephone. | | Call centre | An office where employees make or receive telephone calls for customers of one or more companies. | | Cold call | An unsolicited phone call made by a salesperson to potential customers who have not previously expressed interest. | | Advertising | The activity or profession of producing advertisements for commercial products or services. | | Advertisement / Advert / Ad | A notice or announcement in a public medium promoting a product, service, or event. | | Advertising medium | A channel or system used to deliver advertisements to the public. | | Classified advertisements | Small advertisements in a newspaper or magazine that are grouped together under headings. | | Open-air hoardings / Billboards | Large outdoor boards used for displaying advertisements. | | Neon signs | Signs that use brightly lit neon tubes for advertising. | | Special displays | Arranged items in shops designed to attract consumers' attention. | | TV commercial / Television advertisement / Commercial | A short advertisement broadcast on television to promote a product or service. | | Advertising campaign | A series of advertisements for a particular company, product, or service. | | To advertise | To tell people about a product or service in order to persuade them to buy it. | | Advertiser | A person or business that advertises. | | Advertising agency | An organization that designs and manages advertising campaigns for clients. | | Sponsorship | The action of sponsoring a sports team, event, or person, typically in return for advertising. | | To sponsor | To provide financial support for an event or organization in return for publicity. | | Salespeople / Salesmen / Saleswomen | Employees who sell their company’s products or services. | | Sales force | The entire team of salespeople employed by a company. | | Sales area / Sales territory | A specific geographical region assigned to a salesperson for selling products. | | Sales manager | The head of the sales force, responsible for managing the sales team. | | Promotion | All the activities designed to support the sale of a product or service. | | Loyalty card | A card issued by a retailer to reward frequent customers with discounts or points. | | Cross-promotion | A marketing strategy where two or more brands collaborate to promote each other's products or services. | | Product / celebrity endorsement | An advertisement where a famous person recommends a product. | | Product placement | The inclusion of branded products in media such as films or television shows. | | E-commerce | The buying and selling of goods and services over the internet. | | B2C e-commerce (business-to-consumer) | The online sale of goods and services from a business directly to an end consumer. | | B2B e-commerce (business-to-business) / E-procurement | The online sale of goods and services from one business to another. | | B2G e-commerce (business-to-government) | The online sale of products and services from a company to a government. | | Internet selling / Internet sellers | The activity of selling goods and services on the internet. | | Dot-com bust | The collapse of internet-based businesses in the early 2000s. | | Web 2.0 | The second phase of the internet, characterized by user-generated content, social networking, and interactivity. | | Social-networking sites | Websites that allow users to connect with friends and family, share information, and build communities. | | Video-sharing sites | Websites that allow users to upload, view, and share videos. | | Blog | An online diary or journal where individuals share their thoughts and experiences. | | Collaborative site / Mass collaboration | A website where multiple users work together on projects, such as Wikipedia. | | To host | To provide the online infrastructure and space for a website or application to function. | | Commission | A percentage of money paid to an agent or salesperson for a sale. | | Auction site | An online platform where users can bid on products to purchase them. | | Bid | An offer to pay a particular amount for something, especially at an auction. | | To bid | To offer to pay a particular amount for something. | | To put in a bid | To make an offer to buy something. | | Highest bidder | The person who offers the most money for an item at an auction. | | Shelf life | The length of time for which an item remains usable, fit for consumption, or saleable. | | To merge | When two or more companies combine to form a single new company. | | Merger | The process of combining two or more companies into one. | | Acquisition | The act of one company buying another company. |