1.1 key terms

Question 1

Define Market Segmentation

Answer 1

Breaking down the market into smaller sections in which customers share common characteristics

Question 2

Define market positioning

Answer 2

The range of positions that a product can take in a market based on two dimensions that are important to customers

Question 3

Define market mapping

Answer 3

Plotting on a grid where each existing brand sits on scales based on two important features of a market

Question 4

Define competitive advantage

Answer 4

A company’s ability to perform in one or more ways that competitors cannot or will not match

Question 5

Define product differentiation

Answer 5

The degree to which customers perceive that your brand is different from competitors

Question 6

Define Adding Value

Answer 6

Stretching the difference between the cost of bought-in goods and services and the price 5h4 company can get for its goods

Question 7

What is demand?

Answer 7

the amount of a good that consumers are willing and able to buy at a given price

Question 8

Define Complements

Answer 8

The idea that purchases are linked so the demand of one will affect the demand of another
I.e. petrol and cars

Question 9

Define demographics

Answer 9

How society is made up and the different groups within it (age, location, income etc)

Question 10

Define Supply

Answer 10

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

Question 11

What are Indirect taxes?

Answer 11

An optional tax that is only paid when you purchase a product

Question 12

What are Government subsidies?

Answer 12

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.

Question 13

What is meant by a market equilibrium?

Answer 13

A market is said to be in equilibrium when there is a balance between demand and supply.

Question 14

Define Mass market

Answer 14

A large segment of the of the market that a business targets with a generic product. The business usually has more competitors.

Question 15

Define niche market

Answer 15

A smaller segment of the market targeted with a more specialised product. The business usually has fewer competitors.

Question 16

Define dynamic nature of markets

Answer 16

A market that is constantly changing and that adapts to market trends to remain competitive

Question 17

What is the acronym for major causes of change in a market?

Answer 17

P - political
E - Economic 
S - Social
T - Technological 
L - Legal
E - Environmental

Question 18

Define market research

Answer 18

Gathering information first or second hand about consumer needs and wants

Question 19

What is the difference between primary and secondary market research?

Answer 19

The difference is that primary is research collected first hand and secondary is research collected second hand through other sources.

Question 20

What does product orientated mean?

Answer 20

When the business develops its products based on what it is good at making rather than what the customer wants

Question 21

What does market orientated mean?

Answer 21

When the business reacts to what customers want by making decisions based on customer feedback

Question 22

What is test marketing?

Answer 22

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