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Business Studies Theme 1 (A- Level) > 1.1 meeting customer needs > Flashcards

1.1 meeting customer needs Flashcards

1
Q

Define a mass market

A

A large number of customers which is undifferentiated and sells products/ services to suit a large number of customers

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2
Q

What are some advantages of mass markets

A

Cheaper to advertise
Causes Economies of scale
Huge potential number of customers

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3
Q

What are some disadvantages of mass markets

A

Fierce competition

A USP is needed to stand out (can lead to higher costs)

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4
Q

Define Economies of Scale

A

Where unit cost falls as the businesses level of production increases

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5
Q

Why do big businesses benefit from economies of scale

A

As they make higher levels of output, meaning the price per unit falls

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6
Q

What is the formula for unit costs

A

= Total costs/output

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7
Q

What is a Niche market

A

A smaller part of a large market with products tailored to fit customers specific needs

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8
Q

Give an example of a Niche market

A

Electric Tesla cars in the large market of cars

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9
Q

Does a business have to be in one market

A

No a business may have a big product portfolio which are in the Niche or mass markets

A niche market can become a mass market (like vegan food)

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10
Q

What are advantages of Niche markets

A

Have a specific target market
Less competition than mass markets
Can charge more for products

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11
Q

What are the disadvantages of Niche markets

A

Less customers than in a mass market
No economies of scale
The production cost is higher

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12
Q

How can market share be measured

A

Volume (number sold)

Value (revenue of all products in the market)

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13
Q

What is the formula for market share

A

Sales of product/ Total market sales X 100%

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14
Q

What is the formula for market size

A

Change in market size / original market size x 100%

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15
Q

What is a brand

A

Is a product with a unique character, for instance in design or image. It is consistent and well recognised

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16
Q

What are the advantages of branding

A

Inspire customer loyalty
Can lead to repeat sales and good word of mouth marketing
Charge higher prices
Can develop barriers of entry(new businesses cannot gain market share)
Can lead to a high market share
A brand itself can have monetary value
Can add to new product development

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17
Q

What are the examples of branding

A 
Logo
Tag line/ slogan
Design
Mascot
Theme tune
Sponsorship(consistent of brand image)
Advertising (what is the brand image)
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18
Q

What is a monopoly

A

A company that has over 25% market share.

The CMA control competition and market share

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19
Q

What is brand extension

A

Is where the strength of the brand can be exploited to develop new products
E.g. Oreo biscuits and oreo ice cream

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20
Q

What is brand stretching

A

Is when the brand is used for a diverse range of products, not necessarily connected.

An example is virgin airlines and virgin broadband

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21
Q

Define a dynamic market

A

Ones characterised by constant change or process

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22
Q

What are examples of dynamic markets

A

Technological market
Stock market
FOREX market
Online retail

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23
Q

What are examples of market changes

Acronym

A 
Political
Environmental
Social
Technological
Legal
Economic
24
Q

What are external factors effect on a business

A

A business cannot change external factors.
They come with risks and opportunities which can be planned for
Uncertainties of external factors means businesses have no contingency plan

25
What is the negative effects of increased competition
Less customers Costs increase (develop tech, more advertising) Less sales revenue Less profits
26
What does increased competition depend on
Strength of competition Customer loyalty Market share
27
What are the potential positive effects of increased competition
``` Make business operations better Competitive and high quality products Increased production and productivity Leads to innovation Reduced unit costs ```
28
What is production
The quantity of products made in a given time period - total output
29
What is productivity
How much is produced per person in a given time period - output per person
30
Define risk
The probability or chance that hoped for outcomes will not occur. Can be predicted, measured or quantified
31
Define uncertainty
You cannot predict the possibility of future outcomes
32
Define product orientation
Is where a business develops products based on what it is good at making or doing, rather than what the customer wants
33
Define market orientation
Is where a business prioritises identifying the needs and wants of the customer and creating products to satisfy them
34
Define primary research
New research conducted for a particular purpose
35
Advantages and disadvantages of primary market research
Address the specific needs of the business Data is up to date Can help to understand the customer psychology Expensive to do properly Risk of bias May be small scale, not reliable enough
36
Define secondary research
Uses pre-existing data that has been gathered for another purpose
37
What are the advantages and disadvantages of secondary market research
Often free Provides a good market overview Usually based on a large scale, reliable research May be out of date Not tailored to suit specific needs
38
Define Quantitative research
Research conducted to provide statistically reliable data. Can be put into numerical data
39
Define Qualitative research
Research aimed at providing insights. Is not numerical and often peoples opinions
40
Define product proposition
The total mix of benefits represented by a product and offered to a customer
41
What are examples of primary research
Surveys and Questionnaires In depth interviews Focus group Observations
42
What are the examples of secondary market research
Internet Trade press Government statistics Past internal sales figures
43
What are the two main limitations of market research
Sample size to small : consumer representation is too small to much a decision Sample bias - certain views may skew the overall total populations views
44
What are the 3 uses of ICT to support market research
Company websites - gather data on browser interests Social media - can see consumer attitudes to a product/service Database - gives data on customer behavioural patterns
45
Define market segmentation
The process of dividing a market into smaller sections which contain customers with similar needs and wants
46
How can market research help segment a market
Unearths insights to allow firms to maximise sales and profits
47
What are the ways of segmenting a market
Age Income Gender Geographical location
48
What are the benefits of segmenting a market
Products and services can de designed to suit target market Meeting customers specific needs and wants allows higher prices to be charged Promotional activity is easier to target
49
Define market positioning
Deciding exactly what image you are trying to create for your product relative to its competitors
50
Define market mapping
A technique that analyses markets by looking at the features that distinguish different products or firms
51
What can a marketing map allow a business to do
Spot a gap in the market
52
Define a competitive advantage
A way of standing out from competitors
53
What does Porters generic strategies show
``` That there are two ways of gaining a competitive advantage : Cost leadership (price) Product differentiation (quality,USP, range of products) ```
54
Define product differentiation
Attempting to make your product different, in the minds of customers, to any other rival in the market
55
What are the advantages of product differentiation
Develop brand loyalty Meets customer needs Can charge higher prices
56
Define added value
The difference between the cost of bought - in goods and services and the selling price of a product
57
Define extrapolate
To predict future outcomes based on information already known

Business Studies Theme 1 (A- Level) (7 decks)

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