How To Expand Business By Improving Your Memory Power
THE LANGUAGE OF BUSINESS
If there is one area of modern life that employs enough jargon to make your brain burst, it is the world of business. This jargon – the specialised language and terminology used to describe the systems and concepts central to the business world – cannot be avoided in business studies exams. It’s just got to be learned.
The trouble is, the language of business is forever changing as the media invent phrases to sum up new trends or practices. One of these is the term “white knight” – which I recall being used when the classic British china company Wedgwood was saved from a takeover by the London Rubber Company (the famous condom manufacturer) by another company. This second company arrived like a “knight in shining armour” with a counter-offer for Wedgwood, and saved the blushes of ladies sipping from their Wedgwood china at many a refined tea party.
Different companies may use use commonly understood business terms in their own ways, and you’ll often find that they use different terminology for the same thing. For instance, some companies talk about contribution costing while others talk about marginal costing; both are referring to the same financial strategy.
WHAT DOES IT MEAN?
Of course, there is no point committing either of those terms to memory without also providing yourself with a prompt as to their meaning. Anyone can scatter jargon liberally through their exam answers, but the key to success is proving that you can use it appropriately and with secure understanding.
Thankfully, many business terms are invented to reflect established or emerging practices in a colourful and memorable way, often using images and associations. Well known examples are bull markets and bear markets. It’s easy to work out which is which: a bull market is a period when stock market prices are rising and enthusiastic speculators charge in like raging bulls, mad to buy up shares in the expectation of huge profits; a bear market is the opposite – a time of pessimism and falling prices when everyone wants to sell shares so that they can buy them back later at a lower price. I always think of a grumpy “bear with a sore head”
Not all business jargon is quite so visual, of course, but there is usually a clear logical link between a term and its meaning. Let’s go back to the financial terms “contribution costing” and “marginal costing”. Put simply, contribution costing is the value of a product based only on its variable cost, so only taking into account the contribution it makes to the overheads of the business; marginal costing is the same, because it reflects the contribution the product makes to the business’s profit margin. When committing these concepts to memory, you are still using associations – verbal instead of visual ones in this case – to fix term and meaning firmly together in your brain.
TIME TO TALK TERMS
Here are some suggestions for how to memorise terms from a key area of business: marketing. Have a go at applying the same principle of association to any of the terminology you will need for your exam.
This is a method of analysing the position of a company’s products in terms of their market share, growth and how they support each other’s development. It is a sophisticated system of analysis, which really is the boss’ s mate in terms of planning. To remember how this particular product portfolio system differs from others, focus on this idea of one product being the mate of another, that is helping it to grow or change. The four categories of product included in the matrix are:
This is a product with low market share in a market with low growth. Think of a really scruffy, old dog that’s definitely on its way out.
This is a product that has a high share of a declining market. The Boston matrix shows how a firm can use the cash generated from these brands to invest in newer products with greater potential for growth. Think of a rather thin and mangy cow that has banknotes stuck all over it.
This is a product with low market share in a rising market. Think of a moody child with a lot of growth ahead of it, but a real attitude problem.
This is a product with high market share in a rising market. Think of a shooting star soaring up into the night sky.
To remind yourself of the entire matrix, visualise the weird scene all together: the boss looks out of his or her window at a sick dog limping away as a bewildered looking cow tries to chew on all the banknotes stuck to itself, while a moody child snatches some of the money, the rest of which forms the glowing tail of a shooting star.
Now try applying the same techniques of association and imagination to the following marketing Terms
The practice of setting a price low enough to drive competitors out of the market or even out of business.
A household product which is expected to last for three years or more.
Above the line promotion
The advertising of a product through the media
Below the line promotion
The promotion of a product through sponsorship, competitions or special offers.