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Business theme 1 > 1.1 > Flashcards

1.1 Flashcards

1
Q

niche market

A

a subset of the main market that targets a specialist need

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2
Q

mass market

A

market aimed at the general population

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3
Q

benefits of a mass market

A
  • large scale production, economies of scale and lower averag unit costs
  • large volume of sales = high revenue
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4
Q

drawbacks of a mass market

A
  • lots of competition
  • homogenous products need to be differentiatd
  • high production volume not flexible to demand changes
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5
Q

benefits of a niche market

A
  • charge premium prices
  • easier to target customers with high differentiated products
  • small scale production can be flexible to follow trends
  • less competition
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6
Q

drawbacks of a niche market

A

-very risky as demand may not be constant
- high unit costs as no economies of scale
- limited potential for sales growth

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7
Q

branding

A

a feature of a business or product thats recognised by customers and distinguishes it from competition

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8
Q

Benefits of branding

A
  • brand loyalty
  • brand extension (customers of an established brand are more likely to try new products from the same brand)
  • brand value
  • brand personality
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9
Q

What is market size and how is it calculated

A

the overall size of the market

Volume of sales

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10
Q

What is market growth and how is it calculated

A

% change in size of the market or sales of a firm within a market

new-old/old x100

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11
Q

What is market share and how is it calculated

A

% of a market that is taken by a business/product

sales of x/total sales in a market x100

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12
Q

Dynamic market

A

one thats subject to rapid and continual change and can be due to:
- consumer preferences
- impact of tech
- competition

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13
Q

Online retailing

A

Business that only exists online

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14
Q

Benefits of online retailing

A
  • lower overheads
  • more accessible as open 24/7
  • easier to take global
  • no need for staff to take orders
  • stock can be easily withdrawn or updated
  • easy to set up
  • opurtunities for fast growth
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15
Q

Drawbacks of online retailing

A
  • returns are 2x rate of physical stores
  • very competitive prices
  • issues with online security put off older customers
  • very competitive market
  • owners need IT skills
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16
Q

What is process inovation

A

making operations of a business more efficient and faster

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17
Q

What is process innovation

A

developing new products

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18
Q

Innovation

A

new ideas that can be used in production or turned into products

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19
Q

benefits of innovation

A
  • development of a USP leads to competitive advantage
  • ability to charge premium prices due to better quality
  • improves efficiency of process
  • reputation as being innovative
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20
Q

Drawbacks of innovation

A

heavy time and resource commitment with no guarantee of success

21
Q

What is direct competition

A

when 2 ormore businesses sell similar products that appeal to the same group

22
Q

What is indirect competition

A

when 2 or more businesses sell different products but are competing

23
Q

What is risk

A

When the potential outcomes of a descision are known

24
Q

What is uncertainty

A

The market in which businesses operate are subject to external influences

25
Q

What is market orientation

A

the most important factor when providing products is the consumer

26
Q

Benefits of market orientation

A
  • less returns
  • better reputation
    -meet customer expectations
  • create barriers to entry
  • easy to adapt to dynamic markets
27
Q

Drawbacks of market orientation

A
  • expensive
    -time consuming
  • may focus on aspects that arent important to customers
28
Q

What is product orientation

A

When the product is the most important factor when providing products for a market

29
Q

Benefits of product orientation

A
  • internal efficiency
  • lower production costs
30
Q

Drawbacks of product orientation

A
  • Hard sell: employ people to convince customers they should buy the product
  • more vulnerable to customers
31
Q

What is market research

A

process of gathering data on consumers/ the market

32
Q

primary market research (+ examples)

A

original data gathered by the researcher first hand

observations, questionnaires, focus groups, test marketing

33
Q

secondary market research (+ examples)

A

Data that already exists and has been prevously collected for a different purpose

goverment departments, google, trade associations, market research

34
Q

benefits of primary market research

A
  • specific to research objectives
  • kept private
  • more detailed insights
35
Q

Drawbacks of of primary market research

A
  • time consuming
  • costly to obtain
  • risk of survey bias
  • sampling may not be representative
36
Q

benefits of secondary market research

A
  • free and easy to obtain
  • good source of market insights
  • quick to access and use
37
Q

drawbacks of secondary market research

A
  • quickly become out of date
  • not tailored to business needs
  • specialists reports often expensive
38
Q

Quantitative data

A

numerical data e.g. graphs, statistics and data

39
Q

Qualititative data

A

Detail rich data e.g. interviews, focus groups and observations

40
Q

Benefits of quantitative data

A
  • easy to analyse
  • provides insights into relevent trends
  • easy to compare
41
Q

Benefits of qualitative data

A
  • focuses on understanding customer needs
  • can highlight issues that need addressing
42
Q

Drawbacks of quantitative data

A
  • focuses on data rather than explaining why
  • desnt show causation or reason
  • may lack reliability if sample isnt valid
43
Q

Drawbacks of qualitative data

A
  • expensive to collect or analyse
  • based around opinions
44
Q

What is market segmentation

A

An identifiable group of individuals where consumers share one characteristic or need

45
Q

Examples of types of segmentation

A
  • income segmentation
    -geographical
  • demographic
  • behavioural
46
Q

benefits of market segmentation

A
  • focus resources on parts of a market where the business can succeed
  • allows business to grow in fast moving segments
    -helps new product development
47
Q

drawbacks of market segmentation

A
  • can be imprecise
  • doesnt gurantee you can reach customers in it
48
Q
A

Business theme 1 (1 decks)

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