1.1 key terms Flashcards
Define Market Segmentation
Breaking down the market into smaller sections in which customers share common characteristics
Define market positioning
The range of positions that a product can take in a market based on two dimensions that are important to customers
Define market mapping
Plotting on a grid where each existing brand sits on scales based on two important features of a market
Define competitive advantage
A company’s ability to perform in one or more ways that competitors cannot or will not match
Define product differentiation
The degree to which customers perceive that your brand is different from competitors
Define Adding Value
Stretching the difference between the cost of bought-in goods and services and the price 5h4 company can get for its goods
What is demand?
the amount of a good that consumers are willing and able to buy at a given price
Define Complements
The idea that purchases are linked so the demand of one will affect the demand of another
I.e. petrol and cars
Define demographics
How society is made up and the different groups within it (age, location, income etc)
Define Supply
The quantity of a good or service that a producer is willing and able to make available on the market, at a given price, over a given period of time
What are Indirect taxes?
An optional tax that is only paid when you purchase a product
What are Government subsidies?
Payment from the government to encourage more suppliers to enter the market and to supply more. With a subsidy, there is an increase in supply.
What is meant by a market equilibrium?
A market is said to be in equilibrium when there is a balance between demand and supply.
Define Mass market
A large segment of the of the market that a business targets with a generic product. The business usually has more competitors.
Define niche market
A smaller segment of the market targeted with a more specialised product. The business usually has fewer competitors.
Define dynamic nature of markets
A market that is constantly changing and that adapts to market trends to remain competitive
What is the acronym for major causes of change in a market?
P - political E - Economic S - Social T - Technological L - Legal E - Environmental
Define market research
Gathering information first or second hand about consumer needs and wants
What is the difference between primary and secondary market research?
The difference is that primary is research collected first hand and secondary is research collected second hand through other sources.
What does product orientated mean?
When the business develops its products based on what it is good at making rather than what the customer wants
What does market orientated mean?
When the business reacts to what customers want by making decisions based on customer feedback
What is test marketing?
When the product is offered to a carefully chosen sample of people and based off their reaction, the product will either be scrapped or launched
