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Business Studies > 1.1 (DONE) > Flashcards

1.1 (DONE) Flashcards

1
Q

What are three benefits of operating in mass markets?

A
  • Having more customers.
  • Benefiting from economies of scale (due to higher output levels).
  • Can build a strong market presence.
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2
Q

What are two disadvantages of operating in a mass market?

A
  • Higher levels of competition.

- Lower profit margins.

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3
Q

What are four benefits of operating in a niche market?

A
  • Less competition.
  • Higher profit margins.
  • Customer loyalty.
  • Increased chance of survival.
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4
Q

What are two disadvantages of operating in a niche market?

A
  • No economies of scale.

- Vulnerability because they are not spreading their risk.

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5
Q

What is a niche market?

A

A smaller market which hasn’t been explored.

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6
Q

What is a mass market?

A

A market aimed at the general population, consisting of fast moving goods.

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7
Q

What are three examples of mass market products? (3C’s)

A
  • Cereals.
  • Coca cola.
  • Crisps.
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8
Q

What is an example of a niche product?

A

Water sports clothing.

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9
Q

Define market share.

A

The proportion of total sales in a particular market for which one or more businesses or brands are responsible.

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10
Q

What two ways is market size estimated?

A

Value.

Volume.

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11
Q

How is the value calculated? (The 1st way of estimating market size)

A

The total amount spent by customers buying products.

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12
Q

How is the volume calculated? (The 2nd way of estimating market size)

A

The physical quantity of products which are produced and sold. NOTE: some volume estimates are based on the number or percentage of users, subscribers or viewers.

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13
Q

How do you calculate market share?

A

Sales of a business
—————————————X100
Total sales in the market

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14
Q

Define brand.

A

A name, symbol, or any other feature that allows consumers to identify the goods and services of a business and to differentiate them from those of competitors.

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15
Q

Branding might be used to… (5)

A
  • Differentiate the product from those of rivals.
  • Create customer loyalty.
  • Help product recognition.
  • Develop an image.
  • Charge a premium price when the brand becomes strong.
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16
Q

What are dynamic markets?

A

Markets that change over time.

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17
Q

What are five things that may happen to dynamic markets?

A

They may:

  • Grow.
  • Shrink.
  • Fragment.
  • Emerge.
  • Completely disappear.
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18
Q

Why can dynamic markets be dangerous for businesses?

A

A failure to adapt in a dynamic market can lead to the collapse of a business.

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19
Q

Define E-commerce.

A

The selling of goods online.

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20
Q

Define online retailing or E-tailing.

A

The retailing of goods online.

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21
Q

What are four benefits of online retail services?

A
  • Easier to gather personal information from customers which enables them to target them more effectively.
  • Lower selling costs such as sales staff, rent, etc. —> could charge lower prices.
  • Open 24/7 (reach more customers).
  • Distance of customer is irrelevant (reach more customers).
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22
Q

What are four disadvantages of online retail?

A
  • Need to pay for a highly skilled IT team.
  • May be difficult to target older people.
  • May cause cash flow problems due to sending back money after customers make returns.
  • Very competitive market —>need to spend lots of finance on marketing.
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23
Q

What are three ways markets change?

A
  • The size of markets (some remain stable, majority grow, some decline).
  • The nature of markets (for many markets, the structure and nature of the market constant changes due to new entrants/ranges widening).
  • New markets.
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24
Q

What are the five reasons why market growth may occur?

A
  • Economic growth (world’s population has more and more to spend).
  • Innovation (creating new wants and needs and meet them with new products).
  • Social changes (changes in society can have a big impact).
  • Changes in legislation (new laws, e.g. ban on tobacco advertising).
  • Demographic changes.
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25
Q

What might help businesses adapt to market changes? (4)

A
  • Flexibility.
  • Market research.
  • Investment (invest in new product development).
  • Develop a niche.
26
Q

How might businesses improve competitiveness? (3)

A

By:

  • Lowering prices.
  • Producing better quality products.
  • Offering ‘extras’.
27
Q

What are two ways in which consumers can benefit from competition in markets?

A

They may enjoy better quality products and lower prices.

28
Q

Define risk (for a business).

A

When businesses take actions where the outcomes are unknown.

29
Q

What are two examples of where risks are taken in a business?

A
  • Resources committed could be lost.

- Investment when starting up a business.

30
Q

What is product orientation?

A

An approach to business which places the emphasis upon the production process and the product itself.

31
Q

What is market orientation?

A

An approach to business which places the needs of consumers at the centre of the decision-making process.

32
Q

When is product orientation appropriate? (2)

A
  • When there is little competition in the market.

- When there is low disposable income of consumers.

33
Q

Whether a business places a greater emphasis on the product or on the market will depend on a number of factors: (4)

A
  • The nature of the product (e.g. a business in the electronics industry must innovate to survive)
  • Policy decisions (a business will have certain objectives. If these are in terms of quality or safety, the emphasis is likely to be on production. If these are in terms of market share, the emphasis is likely to be on marketing).
  • The nature and size of the market (if production costs are high, then a company is likely to be market orientated so it can meet customers’ needs effectively).
  • The degree of competition (B’s in competitive markets are likely to spend more on marketing for fear of losing their market share).
34
Q

What are four advantages of being market orientated over product orientated?

A
  • It can adapt quickly in dynamic markets due to its use of market information.
  • It will be in a stronger position to meet the challenge of new competition entering the market.
  • It will be more able to anticipate market changes.
  • It will be more confident that the launch of a new product will be a success.
35
Q

What is sampling in market research? Give an example.

A

The process of choosing the right people to take part in the research. E.g. Whiskers is a pet food manufacturer, so they need pet owners for their research.

36
Q

Define market research.

A

The collection of information relating to the marketing and consumption of goods and services.

37
Q

Market research data can be used for the following specific purposes: (3)

A
  • Identify customer needs and wants.
  • Quantify the likely demand for a product (quantitative).
  • Provide an insight into consumer behaviour.
38
Q

What is primary research?

A

Collecting data or information which did not exist before the research began.

39
Q

What are four methods of primary research?

A
  • Questionnaires (list of written questions).
  • Postal surveys (questionnaires posted to people).
  • Focus groups (number of customers answer detailed questions).
  • Observation (watching reaction/behaviour of customers to their products).
40
Q

What are three primary research benefits?

A
  • New data= competitive advantage.
  • B’s can see their target audience’s honest opinion/reaction to their product.
  • Data is up to date.
41
Q

What are three disadvantages of primary research?

A
  • Can be expensive.
  • Can be time consuming.
  • Data could be biased.
42
Q

Define secondary research. What are the two types of data?

A

Secondary research is the collection of data which already exists.
Can be internal data (from records within the business) or external data (from sources outside the business).

43
Q

What are two internal data examples?

A
  • Existing market research reports.

- Sales figures.

44
Q

What are two external data examples?

A
  • Information from competitors.

- Government publications.

45
Q

Define qualitative research.

A

The collection of data about attitudes, beliefs and intentions.

46
Q

Define quantitative research.

A

The collection of data that can be measured.

47
Q

What are three uses of ICT to support market research?

A
  • Company websites.
  • Social networking.
  • Business databases.
48
Q

How can company websites support market research?

A

They can be used to provide access to online surveys.

49
Q

How can social networking support market research?

A

By searching for trending hashtags to see emerging trends.

50
Q

How can business databases support market research?

A

The information can be used to target customers that are likely to buy at the store.

51
Q

What are the six types of demographic segmentation? (AGISER)

A
  • Age (teenagers, over 65s, etc).
  • Gender.
  • Income (high/low).
  • Social class.
  • Ethnicity.
  • Religion.
52
Q

What is a market segment?

A

Part of a whole market where a particular customer group has similar characteristics.

53
Q

What are two examples of geographic segmentation?

A
  • Groups living in hot climates.

- Different regions have different tastes.

54
Q

What are the four types of market segmentation?

A
  • Demographic.
  • Geographic.
  • Psychographic.
  • Behavioural.
55
Q

What is psychographic segmentation?

A

It groups customers according to their attitudes, opinions and lifestyles.

56
Q

What is an example of psychographic segmentation?

A

Travel companies target holidays at families with young children.

57
Q

What is behavioural segmentation?

A

When markets are segmented according to how consumers relate to a product.

58
Q

What are the three methods of behavioural segmentation?

A
  • Usage rate (categorised according to quantity and frequency of purchases).
  • Loyalty (categorised according to product loyalty).
  • Time and date of consumption (categorised according to particular time and dates of consumption).
59
Q

What are three benefits of market segmentation?

A
  • Businesses that produce different products for different market segments can increase revenue.
  • Higher customer loyalty to businesses that provide products tailored specifically to customer needs.
  • B’s can avoid eating promotional resources by not targeting products at customers that do not want them.
60
Q

Define unique selling point.

A

The aspect or feature of a product that clearly distinguishes it from its rivals.

61
Q

Define added value.

A

The extra features that may be offered by a business when selling a product.

62
Q

What are 8 ways that a business can achieve competitive advantage?

A
  • Price.
  • Product design (e.g.superior design).
  • Product quality (high quality products—> can charge premium prices).
  • Promotion (Persuasive advertising—> create customer want).
  • Customer service (high quality CS—> increased customer satisfaction).
  • Delivery times (quick delivery—> increased customer satisfaction).
  • Economies of scale (larger firms can exploit this—> lower costs).
  • Ethical stance (attract more environmentally aware consumers.

Business Studies (15 decks)

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