1.1 Flashcards

1
Q

Define- mass market

A

Huge markets where the business sell to a general, non-specific audience

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2
Q

Niche market

A

A small segment of a larger market where specialist products and services are required

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3
Q

Whats the difference between Market size and market share

A

Market size can be represented by a total volume of products sold or value of product. On the other hand, market share represents the portion of a market controlled by a particular company or product.

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4
Q

Define - Dynamic markets

A

A market that is in a rapidly changing business enviroment

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5
Q

Define - competetive markets

A

A market consisting of a large number of firms producing identical products which means that no single consumer or producer has the power to influence the market

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6
Q

Whats the difference between risk and uncertaintity

A

Risks are factors that are not expected but can be quatified.
Uncerntainty - factors that cause a lack of certaintity of future events therefore being unable to predict what will happen to a business in terms of profit or growth

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7
Q

advantages + disadvantages of being in a niche market

A

advantages: less competition, clear focus (target particular customers), can often charge a higher price, Profit margins often higher, customers tend to be more loyal, Competetive advantage by created a USP
Disadvantages: Lack of ecconomies of scale, risk of over dependence on a single market or product, likely to attract competition if successful, vulnerable in market changes

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8
Q

Advantages and disadvantages of mass markets

A

Advantages: Make use of economies of scale, Mass marketing is straightforward as everyone is equally targeted, large volume of sales means high revenues which can be spent on RandD
Disadvantages: lots of competition, homogenous (similar) products need to be differentiated through marketing which is expensive, High volume production not flexible to demand changes.

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9
Q

Define + explain the difference between product and market orientation.

A

Product orientation is when a business focuses on their own internal factors before worrying about chanages in the market. Alternatively, market orientation is when a business places consumers views and behavioures first when making decisions.

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10
Q

Explain the difference between Primary and secondary research

A

Primary research is conducted by a business for the first time whereas secondary research is when a business uses research previously conducted from some other purpose.

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11
Q

Explain the difference between qualitative and quantitative market research

A

Qualitative market research is mostly opinion bases ‘why’ a consumer behaves a certain way whilst quantitative is factual often numerative data that aims to be statistically representative of the whole market.

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12
Q

Explain 3 ways ICT is used to support market research

A

Company websites gather data on consumer/browsers intrests
Social media offers info on consumers response to products
Data Technology- Vast quantities of data examined to present patterns that can explain how consumers actually behave.

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13
Q

Define market segmentation

A

When a business spilts the market into different segments to target a specific segment of consumers of whom will share similar wants and needs.

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14
Q

What is meant by the term market mapping?

A

The process of using a graph to plot competitors and their products to understand competitor behaviour and spot a gap in the market.

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15
Q

Explain the term competetive advantage

A

An advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits + service to justify higher prices. Must be sustainable.

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16
Q

Define and explain product differentiation

A

What makes a businesses product or service stand out to your target audience. It is how a business ditinguishes itself from competitors
Not always the same as a USP
Examples of successful product differentiation include:
In 2014 Hyundai Cars in Singapore introduced a three year warranty on all new cars when the industry standard was one year
Green & Black use Fairtrade cocoa AND sugar in the production of their chocolate

17
Q

What is added value?

A

The difference between the price that is charged to the customer and the cost required to create the product or service

18
Q

Define Market growth

A

The rate at which a market’s size is increasing. This is usually expressed as a percentage per annum. Market growth comparisons are a primary barometer of the progress of a business.

19
Q

3 pros and cons of online retailing

A

Pros
Shop always open
Shop can reach international markets
Low overheads as no need for a shop premesis
Cons
Many customers prefer buying in person
Issues with sending goods back may put customers off
Problems with fraud/spam/viruses

20
Q

Chanages in Markets are due to.. (PESTEL)

A

Political- Changes in legislation
Economic - economic growth
Social- society changes/ demographic change
Technological - innovattive products
Envirmonental
Legal

21
Q

What do businesses need to be to be able to adapt to market changes (4things)

A

Flexible
Conduct market research (be aware of changes in customer tastes/competition
Invest- product develeopment
Developing a niche market

22
Q

Advantages and disadvantages of market oriented

A

Advantages
Meet customer needs
Be more competitive
Anticipate market changes
Adapt quickly to changes
Disadvantages
Continuous market research
Training employees
Competition may also be market orientated

23
Q

Advantages and disadvantages of product orientation

A

Advantages-
Product sells itself
High quality
Focus of production capabilities
Disadvantages-
Competitors maybe market orientated and so meet needs better
High research and development costs
Missed opportunities

24
Q

Define Marketing

A

The management process responsible for identifying, anticipating and satisfying customer requirements profitably.

25
Reasons branding is used
Differentiate your product from the competition Create customer loyalty Product recognition Create brand image Premium pricing Add value
26
What is the degree of competition and why does competition occur
The number and strength of other businesses selling products or services within your market sector Competition occurs when two or more organisations act independently to aim to supply a product at the same target market.
27
Define direct and indirect competition
Direct - The competitors who produce the same type of goods as their rivals and try to compete with them on the basis of price, quality ect Indirect- Competitors who offer those goods and services to customers that can be used as a substitute thus cutting down the sales of other products.
28
How competition affects consumers (high and low amount)
High comp- Good value for money Lots of choice Low comp- Low choice High prices
29
How competion affects businesses (high and low amount)
High comp- Incentive to innovate and get better Focus to become more efficient Low comp- Can dominate the market Can set low prices
30
Pros and cons of primary research
pros Directly relevant to business Up-to-date info from the marketplace Competitors dont have access to findings Cons- Time consuming and expensive Results may be misleading if sample size is too small
31
Pros and cons of secondary research
Pros Often no costs Often quick and easy to collect Wide range of secondary data is availabpe especially on internet Cons Data may be unreliable or not up-to-date May not be relevant to business
32
Pros and cons of using ICT to carry out market research
Internet surveys more flexible than questionnaires Higher response rate Engage customers Global reach of internet means its cheap and fast methord to reach wide audience cons- Participants need to be choses carefully if info is to be valid Cannot always control who participates in the research
33
6 ways of segmenting a market
Demographic (eg gender) Geographic Behavioural, based on usage or attitude to product Lifestyle Physcographic (personality types) Religion/ethnicity
34
6 categories of income for market segmentation
A- upper class B- middle class C1-lower middle class C2- Skilled lower class D-Working class E- Unskilled/unemployed
35
4 pros and cons of market segmentation
Pros- Easier to researcg the needs of segment Design a product to meet needs Focus advertisment to the segment Identify a profitable segment Cons- Difficulty in identifying the most important segment for the business Faliure to meet needs of customers not included in your segment Will have to adapt to changes within that segment Potentially limiting money to be made
36
4 purposes/ benefits of market mapping
Can help businesses make decisions about new or existing brands Businesses can identify who their main competitors are and how similar/ different their brands are from their rivals Can help reposition the brand Can help identify gaps in the market
37
4ways to differentiate your business
Through reputation Through customer service Through value for money Through product features
38
3 ways a business can add value
Design (differentiation advantage) Production- achieving quality and efficiency adds value Marketing - creating an image that makes the product more desirable (brand differentiation advantage)
39
3 benefits of adding value
Charge a higher price - increase profit Protection against competitors offering lower prices Customer loyalty