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business > 1.1 > Flashcards

1.1 Flashcards

1
Q

what is a market?

A

any place where buyers and sellers can meet e.g. amazon.co.uk or a shopping mall

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2
Q

what is the aim of marketing?

A

to help identify, anticipate and satisfy consumer needs and wants profitably

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3
Q

what is market research?

A

the process of systematically gathering data from consumers which can be used to influence the business decisions

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4
Q

what are mass markets

A

products are aimed at broad market segments

Mass marketing occurs when businesses sell their products to most of the available market

Production usually happens on a large scale

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5
Q

what is a niche market?

A

products are aimed at a subset of the larger market e.g. gluten free products

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6
Q

characteristics of mass markets

A

Products are less unique as they are aimed at broad market segments

Low average costs due large scale production economies of scale

Low prices lead to greater affordability and higher sales volumes

Low prices lead to lower profit margin

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7
Q

characteristics of niche markets

A

Products are more specialized and unique as they are aimed at narrow market segments

High average costs due to small scale production

They do not benefit from economies of scale

High prices make products less affordable and lead to lower sales volumes

High prices can allow businesses to earn higher profit margin

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8
Q

sales revenue formula?

A

Sales revenue = price x quantity sold

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9
Q

market share formula?

A

(sales of a business / total sales in a market) x 100

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10
Q

what is a brand

A

name, image, or logo which helps one product/service stand out from its competitors

Branding is one of the key ways in which businesses achieve product differentiation

Brands add value, often making the product/service more desirable to consumers

Adding value is the process by which firms increase the price that the consumer is willing to pay

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11
Q

what is a dynamic market?

A

a market that is subject to rapid or continuous changes

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12
Q

advantages of online retailing

A

Provides business access to more consumers, including internationally

Enables longer trading hours as the business is open 24/7

Cheaper to run as it lowers fixed and variable costs compared to bricks and mortar retailers

Businesses can collect data by tracking consumer behaviour which helps with primary market research

Consumers can receive offers that they are more likely to benefit from
Consumers can shop at a time that suits them

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13
Q

disadvantages of online retailing

A

There may be high costs for website development, maintenance, and promotion

Online retailing is dominated by larger businesses that are more well-known

High levels of competition mean that it will be expensive to make a website stand out

There is a lack of personal contact with customers

Consumers may find it difficult to get the desired level of customer service

Consumers may find it difficult to return unwanted products

Online purchasing opens consumers up to credit card fraud

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14
Q

what changes can cause a market to become dynamic?

A

Changing consumer tastes and preferences

Changing demographics

The amount of competition
Changing legislation

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15
Q

what is product innovation

A

Product innovation involves the adaptation or improvement of existing products

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16
Q

what is process innovation

A

Process innovation involves the adaptation or improvement of existing processes

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17
Q

what are some ways a business can adapt to change?

A

Create flexible business structures, especially in terms of operations and people management

Meet customer needs, by carrying out market research and communicating with customers

Invest in staff training, new products and processes

Innovate so as to gain the first mover advantage

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18
Q

what is direct competition?

A

occurs when the business is targeting customers with the same product as a competitor

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19
Q

what is indirect competition?

A

occurs when firms sell different products but compete with each other for the customers disposable income e.g. cinema and theatre companies are in indirect competition

20
Q

how does competition benefit the customer?

A

Businesses offer lower prices

Businesses produce better quality products

Businesses provide better customer service

21
Q

what is product orientation?

A

n approach to marketing that focuses on the characteristics of the product rather than the needs of the consumer

The emphasis will be on creating a product first and then finding a market

The business has a belief that the product is superior i.e. it will sell itself

22
Q

what is one problem with product orientation?

A

over time your business may move further and further away from what the market is looking for, thus increasing the risk of business failure

23
Q

what is market orientation?

A

an approach to marketing that focuses on the needs of consumers and uses this information to design products that meet customer needs

Consumers are at the centre of marketing decisions

Products will be developed which respond to consumer needs

24
Q

what is the result of market orientation? (its positive)

A

the firm will benefit from increased demand, increased profits, and a valued brand image as its products become more desirable

25
Q

what is market research?

A

the objective collection, compilation and analysis of information about a market

26
Q

does does market research help businesses?

A

to reduce risk when launching new products or entering new markets
Anticipate future needs and wants of consumers (demand)
To identify competitors and gauge their potential strengths and weaknesses

27
Q

primary research method - surveys

A

asking respondants questions, and results are extrapolated to be true for the wider population

28
Q

primary research method - test marketing

A

free samples are provided to the target market to gauge their response to the product

28
Q

primary research method - observation

A

hiring someone to stand in a specific place and study consumer behaviour

29
Q

primary research method - focus groups

A

free discussion led by marketing specialist to collect detailed feedback on all aspects of the marketing mix

30
Q

advantages of primary market research

A

information gathered is focused on the needs of the business

information is more in depth

research is more up to date and can be used to ask specific questions

31
Q

disadvantages of primary market research

A

sample size may be too small (so unrepresentative of all customers leading to unreliable results )

bias may lead respondants to answer in a particular way

may need to hire a specialist market research agency (expensive and time consuming )

32
Q

what is secondary research

A

the collection, compilation andd analysis of data that already exists

33
Q

advantages of secondary market research

A

information is already available so is quicker

cheaper to collect leading to lower costs

suitable for small businesses

34
Q

disadvantages of secondary market research

A

may lack relevance

may be factually correct

can be expensive to purchase from a specialist

may be out of date

35
Q

what is market segmentation?

A

the process in which a single market is divided into sub markets, which represent slightly different sets of consumer characteristics, usually based on things like gender, income and lifestyle

36
Q

advantages of market segmentation

A

products can meed the needa of different types of consumers

less expensive and wasteful

increases loyalty if the consumer feels that their needs are being met (leads to repeat purchases)

37
Q

disadvantages of market segmentation

A

not everyone in a segment will behave in the same way

requires more detailed market research

a segment may tbe identified but be too small and unprofitable to cater for

38
Q

what is market mapping

A

a tool for identifying the position of a product in the market

twi dimensional diagram that shows characteristics of a product to that of its rivals

39
Q

limitations of market mapping

A

a gap in the market may not be profitable to fill (low quality high price )

may require primary researxh which can be expensive

only two ctiteria which might be too simple

markets are dynamic so may only provide insight at a specific point in time

39
Q

usefullness of market maps

A

market gaps can be identified (which may enable a business to come up with ideas for new products)

simple to construct and can offer a visual illustration

40
Q

what is a competitive advantage?

A

the features of a business and its products that are percieves as superior to its rivals by customers

41
Q

what is product differentiation

A

an attempt by a business to distinguish its products from those of competitors

may be tangible, or a perception that is created in the consumers mind

42
Q

how does product differentiation help a business

A

increases demand for products

increases brand loyalty

allows to charge higher prices

43
Q

what is added value

A

the value that a business adds to a product or service

/

the difference between the price the business paid for ingredients and the price the business charged to their customers (eg people are willing to pay moore for a potato if it was packaged as chips than they woukd for a bag of potatoes)

44
Q

what are some methods of adding value?

A

marketing and branding

function and features

customer service

customisation

packaging (exciting opening experience)

business (18 decks)

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