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Principles of Business, Marketing and Finance Final Exam Review
Business:
1. Imports- bring something in from abroad
2. Exports-to send goods for sale or exchange to other countries
3. Trade Surplus-more exports than imports
4. Trade Deficit-more imports than exports
5. Tariff-a tax levied by a government on imports or occasionally exports for purposes of protection,
support of the balance of payments, or the raising of revenue
6. Quota-a prescribed number or quantity, as of items to be manufactured, imported, or exported,
7. Embargo-restriction on trade: a government order restricting or prohibiting commerce,
especially trade in a given commodity or with a particular nation
8. Producers- manufacturer of goods
9. Intermediaries-sell goods and services of producers to consumers and other businesses
10. Service business-carries out activities that are consumed by its customers
11. Sole proprietorship-Individuals who want to work and make decisions independently
12. Partnership-partnership is owned and controlled by two or more people
13. Corporation-Separate legal entity owned by one or more shareholders and managed by a board of
directors
14. Franchise-the right or license granted by a company to an individual to sell its products or service
in a specific area.
15. Mission statement-short specific reason why the business exists and what it wants to achieve
16. SMART goals- Specific, Measurable, Attainable, Realistic, Time-bound
17. Policies-guidelines used in making consistent decisions
18. Procedures-descriptions of the way work is to be done
19. Responsibility-the obligation to complete specific work
20. Authority-right to make decisions about how responsibilities should be accomplished
Marketing:
1. Difference between a customer and a consumer
A. Customer – one who purchases a product or service
B. Consumer – one who uses a product or service
2. The Marketing Concept- states that businesses must satisfy customer’s wants and needs
in order to make a profit.
3. What is a market? – all potential customers who share common wants and needs, and
have the willingness and ability to buy.
4. Marketing mix (Four P’s of Marketing)
A. Product – strategies include what product to make, how to package it, what brand
name to use, and what image to project
B. Place – strategies deal with how and where a product will be distributed
C. Price – strategies should reflect what customers are willing and able to pay
D. Promotion –strategies deal with how potential customers will be told about the
new product, what the message will be, when and where it will be delivered, and
with what inducements to buy.
5. Customer profile- demographic information about a selected, targeted customer to
develop a clear picture of a target market.
6. Target market –focusing all marketing mix decisions on the specific group of people you
want to reach.
7. Market segmentation -Dividing the total market into smaller groups of people who share
specific needs and characteristics
8. Demographics –refers to statistics that describe a population in terms of personal
characteristics; age, gender, ethnicity, income, education
9. Psychographics –involves studies of consumers based on social and psychological
characteristics such as values, interests and beliefs
10. Geographics – segmenting a group of people based on where they live; local, regional,
national, global
Finance:
1. Compound interest –interest building upon interest
2. Sinking fund – saving to pay cash for something in the future instead of taking a loan
3. Key to building wealth – spending less than you make, being debt free and staying
disciplined
4. Three reasons to save Money- Build wealth, Emergency fund, Purchases
5. Debit vs. Credit card – describe the difference
6. Budget – personal budget should be prepared on a monthly basis
7. Rate of return = the amount expressed as a % of investment earned by an investor
8. Interest rate – the amount expressed as a % of principle charged by a lender to purchase
an item
9. Bankruptcy – will stay on your credit report for 10 years, affects your credit score, could
affect getting a job or promotion
10. Debt consolidation – Combining debt into one payment for a longer period of time and
higher interest rate
11. Crisis living – living pay check to pay check, bouncing checks, incurring fees due to
overdrafts in bank account, payday loans, using credit cards to make ends meet
12. Disposable income –money left over after taxes; typically the amount of your paycheck,
used for needs
13. Discretionary income –money left after paying for necessities, bills, etc. Used for Wants
14. Financing – taking a loan for money to pay for something. Most of the time financing is
for large purchases when you want to buy something that you did not save up for.
15. Fastest growing age group filing for bankruptcy – under 25