PART 2 BUSINESS STUDIES -DEFINITIONS (CLASS 12)CBSE

 This worksheet gives you the definition in business studies PART 2 class 12

1. Meaning of Business Finance

The money required to carry out business activities is known as business finance. Finances are needed to operate a business, as well as to carry out day to day activities of the business. 

2. Capital Structure

It is one of the most important decisions under financial management to decide the pattern or the proportion of various sources that should be used for raising the funds.

Capital structure is the proportion of debt and equity that is used to finance business operations. It is calculated as debt-equity ratio.

i.e. [Debt/Equity]
Or
The proportion of debt out of total capital i.e. [Debt/Debt + Equity]

3. Financial management refers to the acquisition and then the efficient utilization of finance. It includes the distribution and disposal of the surplus for the smooth working of a company. Financial management is nothing but maximisation of wealth.

4. Financial market is a market which facilitates creation of assets and exchange of securities to provide short, medium and long term business finance. It mobilizes funds between savers and investors. It locates funds into the most productive investment opportunities.

There are two types of Financial Markets:
a. Money Market
b. Capital Market

5. MONEY MARKET: It is a market which deals in short term securities and whose maturity period is less than one year.
6. Capital Market: It is a market which deals in medium and long term securities with a maturity period of more than one year.
7. Marketing is defined as "a human activity aimed at satisfying needs and desires through an exchange process." --- Philip Kotler
8. Marketer - A marketer is anyone who makes an extra effort to identify the needs of the consumers and offer the product or service as well as persuade them in order to buy in the process of exchange.
Sellers, as marketers, are the ones who provide satisfaction. They make products/services available and sell them to customers in order to meet their needs and desires

9. Marketing management is the administration of marketing functions.

It is considered as the process of organizing, directing as well as controlling the activities associated with marketing goods and services in order to meet the needs of customers and achieve organizational goals.

“Marketing management is defined as the art and science of selecting target markets and acquiring, retaining, and growing customers by creating, delivering, and communicating superior customer service.” --- Philip Kotler 

10. Marketing: It refers to a broad range of activities, of which selling is only one component. Before making a sale, a marketer must plan the type, design, and price of the product, as well as select the distribution channels and the appropriate promotional mix for the target market.

11. Selling: refers to the sale of a product or service through advertising, promotion, and salesmanship. The product's title is transferred from seller to buyer. The primary goal of selling is to turn a product into cash.

12. Product - A product, in the eyes of the customer, is a collection of utilities that is purchased because of its ability to meet a specific need.

13. Branding is the process of creating a corporate brand identity for consumers and imprinting that brand identity on their minds, which necessitates brand positioning and brand management. -Amazon's Jeff Bezos

14. Brand: A name, term, sign, design, or some combination of the above used to identify and differentiate the seller's products from those of competitors.
15. Marketing Mix

A large number of factors influence marketing decisions; these are classified as ‘non-controllable factors' and ‘controllable factors.' Controllable factors are those that can be influenced at the firm level. Environmental variables are factors that influence a decision but are not controllable at the firm level. In order to be successful, a company must make sound decisions after analyzing controllable factors and keeping environmental factors in mind. Marketing Mix refers to the set of marketing tools that a company employs to achieve its marketing objectives in the target market. The success of a market offer is determined by how well these ingredients are combined to provide superior value to customers while also meeting sales and profit goals.

16. Consumer protection refers to safeguarding consumers from manufacturers or sellers that engage in anti-consumer trade activities.

The Consumer Protection Act of 2019 aims to safeguard and promote consumers' interests by resolving their complaints in a timely and cost-effective manner. It came into force on July 20th 2020.
17. Consumer- A consumer is defined as someone who buys or receives consumer goods or services against a payment. It includes anyone who benefits from such services, but it excludes anyone who uses such services for financial gain.

Under the Consumer Protection Act 2019, a consumer is a person who buys any goods or avails services for a consideration, which has been paid or promised, or partly paid and partly promised, or under any scheme of deferred payment.
18. An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. The process of setting up a business is known as entrepreneurship. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures.
19. Entrepreneurship is one of the resources economists categorize as integral to production, the other three being land/natural resources, labor, and capital. An entrepreneur combines the first three of these to manufacture goods or provide services. Entrepreneurship is highly risky but also can be highly rewarding, as it serves to generate economic wealth, growth, and innovation.
20. Entrepreneurship development is the means of enhancing the knowledge and skill of entrepreneurs through several classroom coaching and programs, and training. ... This entrepreneur development process helps new firms or ventures get better in achieving their goals, improve business and the nation's economy.