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Theme 1 business > 1.1/1.2 > Flashcards

1.1/1.2 Flashcards

1
Q

Market

A

Buyers and sellers trade a particular type of product in a particular place

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2
Q

Mass market

A

Aimed at a large group of buyers . Wide appeal of different segments

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3
Q

Niche market

A

Aimed at smaller, more specific group of buyers. Specialised products

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4
Q

Benefits and drawback of mass market

A

+ more consumers to sell to
+higher sales volume
+ economies of scale

-Need a lot of capital to create sales volume
-need large production process set up
- may need to spend more on branding

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5
Q

Benefits and drawbacks of a niche market

A

+ less competition
+ specialised products may suit customer needs more
+ Charge higher prices
- more risky
-smaller number and narrow range of customers
-changes in the market can lead to sales being lost quickly 7

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6
Q

Market size

A

Total value of sales in a market over a certain time period
Or total number of consumers

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7
Q

Market share

A

The proportion of the total market a Business holds
Total sales of business / total sales in the market

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8
Q

Brand

A

Clear and obvious logo or statement that is recognisable.

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9
Q

Dynamic market

A

Change and evolve rapidly

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10
Q

Benefits of online Retailing

A
  • business costs are lower as no need to have a physical shop
    -available 24/7
  • easy to compare prices
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11
Q

Limitations of online retailing

A

Some consumers like to see products before they buy them (can tackle this buy including free returns)
- need to ensure customers personal details are protected which can be expensive to maintain and can damage reputation if not done properly

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12
Q

Direct competition

A

When two or more businesses sell similar products that appeal to the same group of people by many competing businesses.

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13
Q

Indirect competition

A

When two or more businesses sell products that are different but are competing for the same customers

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14
Q

Product 4ps

A
  • firms need ensure their product is at a good quality
  • is distinctive
    -Unique appeal/USP
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15
Q

Promotion 4ps

A
  • lots of promotional campaigns to get their products noticed
    -Informs consumers about business’s products
    -Branding methods e.g celebrities
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16
Q

pricing 4ps

A

-firms in competitive markets often use competitive pricing strategies
- selling a product cheaper than rivals
-prices are cheaper in competitive markets

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17
Q

Place 4ps

A

-easy to access
-e.g online apps

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18
Q

Risk

A

Probabilities of different outcomes are known

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19
Q

Uncertainty

A

Unexpected events- they could happen but hard to predict when

20
Q

Product orientation

A

Product is designed based on the performance, design and quality of product not the consumers wants and needs

21
Q

Market orientation

A

Product is designed based on consumer tastes and preferences
-based on demand for a product so can charge higher prices as they are meeting customer needs more

22
Q

Market research

A

The collection and analysis of market information.

23
Q

Importance of market research

A
  • finds out customer needs and wants and anticipate future needs
    -predict how much demand there will be
    -learn about consumer behaviour e.g online or in person shopping
    -what price consumers will pay
    -identify competitors
24
Q

Examples of primary and secondary research

A

Primary- focus groups, surveys, interviews
Secondary- government publications, internet sources, market reports

25
Q

Benefits and drawbacks of primary research

A

-specific
-exclusive to the business competitors cannot benefit

  • labour intensive
    -expensive
    -slow
26
Q

Benefits and drawbacks of secondary research

A

+easier
+faster
+cheaper

-not specific
-out of date

27
Q

Use of technology for market research

A

-range of websites : conduct short surveys on them or analyse the activities of people using the site e.g how many times have they revisited the website
- loyalty cards sends info back to data base about consumer preferences

28
Q

Segmentation

A

Dividing the market into groups of buyers

29
Q

Different ways to segment the market

A

Demographic e.g age , geographic , income, behavioural e.g amount of use, lifestyle, hobbies

30
Q

Benefits of market mapping

A
  • shows closest competitors
    -spot gaps in the market
31
Q

Limitations of market mapping

A
  • too simplistic
    -opinions can be biased
32
Q

Competitive advantage

A

A condition which allows a firm to generate more sales or to be more profitable than its rivals.

33
Q

Ways to gain a competitive advantage

A
  • lower costs, enables businesses to charge lower prices
    -product innovation, be first in the market
    -advertising
    -product differentiation
    -reliability and quality
    -customer service
    -convenience
34
Q

Added value

A

Price product sold for - cost to make the product

35
Q

Factors that affect demand

A

Substitutes- demand for a brand can be changed by a price of a substitute
Complementary goods
Consumer income
Fashion, consumer tastes
Advertising and branding
Demographics- population changes
Seasonal changes
External shocks

36
Q

Factors that affect supply

A

Costs of production
Indirect taxes
Subsidies- increase supply
New tech- increase supply
Weather conditions
External shocks

37
Q

Which way does the rise in demand shift the line?

A

To the right

38
Q

Which way does a fall in demand shift the demand line ?

A

To the left

39
Q

Which way does a rise in supply shift the supply line ?

A

To the right

40
Q

Which way does a fall in supply shift the supply line ?

A

To the left

41
Q

Price elasticity of demand (eq)

A

%change in quantity demanded / %change in price

42
Q

What if the price elasticity is above 1 ?

A

The product is elastic

43
Q

What if the PED is below 1?

A

The product is inelastic

44
Q

Factors affecting price elasticity

A
  • Necessity- milk etc are inelastic
    -loyalty to a product makes a product less elastic
  • time- product becomes more elastic over time as internet makes it easy to find alternatives
    -proportion of income
45
Q

Income elasticity (eq)

A

% change in quantity demanded / change in income

Theme 1 business (2 decks)

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