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IB BUSINESS MANAGEMENT DEFINITIONS AND SOLVED QUESTIONS
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IB BUSINESS MANAGEMENT DEFINITIONS AND SOLVED QUESTIONS
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IB BUSINESS MANAGEMENTDEFINITIONS AND SOLVED
QUESTIONS
Net Cash flow - Cash inflow - Cash outflow; change in cash balance from the beginning to the end
of a given period.
Working capital - The value of a business's current assets not financed by current liabilities
(current assets - current liabilities).
assets - tangible or intangible property with a monetary value owned by an organization
Depreciation - The decrease in value of fixed assets over time: the depreciation within the reporting
period is listed as an expenses in the profit & loss account and the cumulative depreciation of fixed
assets is recorded in the balance sheet
liquidity - The ability of a firm to be able to pay its short-term debts
Opening Cash Balance - Cash held by the business at the start of the month
Closing Cash Balance - Cash held at the end of the month becomes next month's opening
balance
Measurement of liquidity - Quick ratio & Current ratio
Current ratio : Current assets / Current liabilities
Payback Period - The amount of time it is expected to take for an investment to return the
initial cash outflow.
Investment - The outlay of assets (often cash) to generate future revenues.
,Brand awareness - Measures the extent to which a particular brand is recognised amongst
potential customers or the general public. It is usually measured as a percentage.
Brand loyalty - The faithfulness of consumers to a particular brand as shown by their repeat
purchases irrespective of the marketing pressure from competing brands.
Brand value The premium that accrues to a brand from customers who are willing to pay
- extra for it.
Packaging - Packaging in marketing concerns itself with the presentation of a product to a
consumer.
Channel of distribution The chain of intermediaries a product passes through from producer
- to consumer
Agent - Business with authority to act on behalf of another firm; e.g. to market its products
Broker - A wholesaler who does not take title to goods and whose function is to bring buyers and
sellers together and assist in negotiation
Supply chain management - The process of managing the network of businesses that are
involved in the provision of products to the final consumer
Direct marketing - Any promotional activity that involves making direct contact with existing or
potential customers, such as door-to-door selling, personal selling and direct mail
Distribution - The process of getting products/services to customers at the right time and in the
most cost-effective way; it is the PLACE in the marketing mix
Distributors - Are independent businesses that act as intermediaries by specialising in the
trade of products made by certain manufacturers
, Intermediaries - Agents or firms that act as a "middle man" in the chain of distribution
between the producers and consumers of a product e.g. wholesalers
Retailers - The sellers of products to the general public (i.e. final consumers)
Wholesalers - Businesses that purchase large quantities of products from a manufacturer and
then separate or 'break' the bulk purchases into smaller units for resale to retailers
Promotion - The use of advertising, sales promotion, personal selling, direct mail, trade fairs,
sponsorship and public relations to inform consumers and persuade consumers to buy
Above-the-Line Promotion - A form of promotion that is undertaken by a business by paying for
communication with consumers; e.g. advertising
Below-the-Line Promotion - Promotion that is not a directly paid-for means of communication but
based on short-term incentives to purchase
Sponsorship - A promotional technique which involves a business funding, supporting or
donating resources for an event or organisation in return for prominent publicity e.g. a
sponsors name being displayed on a football team's uniforms.
Word of Mouth (WOM) - The spreading of good or bad messages about a firm, its products or its
customer service. Many people argue that this is the most cost-effective form of promotion
Guerrilla marketing - an advertisement strategy concept designed for businesses to promote their
products or services in an unconventional way
Human Resources Department - the department responsible for employment-related matters, such
as the hiring process, payroll, benefits, and labor relations
Workforce plan - Establishing the number and skills of the workforce required by the business,
considering internal objectives and external factors.
Workforce audit - A check on the skills and qualifications of all existing employees
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