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Business > 1.1 > Flashcards

1.1 Flashcards

1
Q

what is a market

A

the group of individuals and organizations that make up the pool of customers

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2
Q

what is market size

A

the total value of a market in terms of money spent or number of products

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3
Q

what is market growth

A

the % change in the size of a market compared to the previous year

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4
Q

how do you calculate % change

A

(difference/original) X100

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5
Q

what is a mass market

A

market that is aimed at the general population

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6
Q

what is a niche market

A

subset if the main market that addresses a specialist need

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7
Q

what is a dynamic market

A

one that is subject to rapid or continuous changes in supply & demand

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8
Q

list 5 reasons markets change

A

economic growth
trends
technology
competition
nature of product (luxary)

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9
Q

state the 3 ways firms compete

A

price
product range
customer service

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10
Q

what is offensive marketing

A

trying to increase sales or develop new markets

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11
Q

what is defensive marketing

A

reacting to competition & trying to maintain market share

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12
Q

what is innovation

A

improving a product which already exists

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13
Q

what are the advantages of innovation

A

gain a competitive advantage
add value so a higher price can be charged
encourages people to switch brand loyalty

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14
Q

what are the disadvantages of innovation

A

high research and development costs
high risk of failure
existing products may be cannibalised
disruption to business operations

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15
Q

what is online retailing

A

selling items through the internet

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16
Q

what are the advantages of online retailing

A

open 24/7
reach international markets easily
low overhead (no rent costs)
stock can easily be withdrawn or updated
flexible for customers and the business

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17
Q

what are the disadvantages of online retailing

A

high number of returns
issues with online security
very competitive market
hard to drive traffic to sites
owners need IT skills
competitors can easily see competition

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18
Q

what are risks of having a business

A

insufficient demand due to poor market research or saturated market
external shocks such as economic factors
poor execution due to poor management

19
Q

what are rewards of having a business

A

increased sales
profits and growth
return on investment
customer loyalty
brand recognition

20
Q

what are calculated risks

A

a risk which has been carefully considered and the costs and benefits have been weighed up

21
Q

what is a business plan

A

a plan created to assess new ideas, set business goals and find a strategy

22
Q

how can a business reduce risk financially

A

raise finance from investors
manage cash flow
avoid bankruptcy

23
Q

how can a business reduce risk managerially

A

recruit experienced staff
motivate workers
effective communication

24
Q

how can a business reduce risk through marketing

A

target customers effectively
forecast sales
develop a promotion strategy

25
Q

how can a business reduce risk operationally

A

invest money effectively
manage supplies
manage overheads and costs

26
Q

define uncertainty

A

when a business doesn’t know what is likely to happen in the future and can not measure and predict outcomes

27
Q

identify 2 ways to reduce risk when starting a business

A

have a detailed business plan
match your business idea to available finance

28
Q

identify 2 ways to reduce risk when expanding a business

A

finance growth without taking on debt
carry out detailed research on new opportunities

29
Q

identify 2 ways to reduce risk when expanding internationally

A

research the legal, political and economic situation
select the most appropriate methos to enter the international market

30
Q

what is big data

A

the process of collecting and analysing large data sets from traditional and digital sources to identify trends and patterns that can be used in decision making

31
Q

what are the limitations to big data

A
  • data is unstructured and difficult to analyse
  • a lot of the data is very recent making it hard to see long term trends
  • customers may be concerned about privacy and not allow data to be collected
  • loss and theft of data will damage a businesses reputation
32
Q

state 5 ways businesses use big data

A
  • location
  • retail e-commerce data
  • user interactions
  • target specific customers
  • innovate
33
Q

what is sampling

A

involves selecting a way to ask for information from a representative group of customers

34
Q

what are the problems with sampling

A
  • careful sample selection is needed to ensure results are truly representative
  • bias
  • margin of error
35
Q

how are customers bias in market research

A
  • people wanting to agree and be positive to look nice
  • answering questions in the way they think is socially acceptable
  • answers are given that the survey is looking for (leading questions)
  • confirmation bias, people want to agree with those around them
36
Q

what is market orientation

A

decisions taken based around information about customer needs and wants rather than what the business thinks is right for the customer

37
Q

what is product orientation

A

the business develops a product based on what they are good at making rather than what the customer wants

38
Q

what is quantitative data

A

number and statistics
can create graphs
find trends

39
Q

what is qualitative data

A

opinions and in depth reviews
hard to analyse

40
Q

state some examples of primary research

A

questionnaires
interviews
observation
loyalty cards
focus groups
test marketing

41
Q

state some examples of secondary research

A

annual reports
internal data
government sources
trade journals
market research companies

42
Q

what is brand extension

A

innovating/changing some elements of a product in order to extent the product life cycle

43
Q

what is market mapping

A

illustrates the range of positions that a product can take based on 2 dimensions that are important to customers (e.g. price and quality)

44
Q

what are the advantages and disadvantages of market mapping

A

+/ spots gaps in the market
useful to analyse competitors
encourages market research
-/ gaps in the market doesn’t mean demand
dependent on reliability of market research

Business (22 decks)

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