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Question 1

market segment

Answer 1

A market segment is a
subsection of a larger
market in which consumers
share similar needs and
wants.

Question 2

A niche market

Answer 2

A niche market is a small

segment of a larger market.

Question 3

Benefits of mass marketing

Answer 3

Huge potential number of
customers, Higher production levels allow economies of scale - lower
production costs, Can use mass media advertising

Question 4

Benefits of niche marketing

Answer 4

Meeting consumer needs more
preciselv allows higher prices to
be charged, Higher profit margins, Easier to enter for firms with
limited financial resources. Less Competition, brand loyalty/ enhanced customer relationships- experts. Cost-effective marketing

Question 5

Mass market characteristics

Answer 5

Generic products which are broadly

similar in form and function

Question 6

Niche market characteristics

Answer 6

Specialist products and services
are required. Changes in consumer
preferences can be rapid and
devastating to the market

Question 7

Mass market market size and share

Answer 7

Huge markets in which large firms can
operate successfully even though their market share may be low, e.g. Ferrero’s
5% share of the UK chocolate market

Question 8

Niche market market size and share

Answer 8

Smaller markets mean successful
firms may achieve far higher shares
of their niche than mass market firms

Question 9

Mass market brands

Answer 9

Huge brands can develop with the
name/logo representing a key point of
differentiation

Question 10

Niche market brands

Answer 10

Differentiation is more likely to be
achieved through product features
and functions

Question 11

Dynamic markets- online retailing

Answer 11

Continued growth in online retailing has varied between different markets,
with clothing growing tremendously but growth in online sales of books
slowing to a virtual halt. This unpredictability of growth adds to the
unpredictability of dynamism in online retailing. What history has shown
us is that retailers who fail to switch to online retailing can fail completely
as online rivals steal sales. Above all. it is vital to ensure that your product or
service is available to buy wherever consumers want to buy it. In some cases
it is vital to have an online presence, or if consumers want to buy online and
collect from their local store, a click-and-collect service is needed.

Question 12

How markets change- P in PESTLE

Answer 12

Political: In 2016 the government’s new ‘Living Wage’ was brought
in, pushing the legal minimum (for over-25s) from {6.70 to £7.20 an
hour; this was great for low-paid employees, but tough on employers in
low-wage industries such as care homes.

Question 13

How markets change E

Answer 13

Economic: The economic recession of 2008-09 led to major changes
in UK grocery retailing, as price-conscious shoppers opted for Aldi
and Lidl.

Question 14

How markets change S

Answer 14

An increased desire for convenience has driven the rise in

online retailing.

Question 15

Innovation and market growth

Answer 15

A major cause of change within markets is innovation. With competing
firms continually trying to develop new products and services that offer
features that no rivals offer, consumer loyalties can change dramatically.
Once one innovation has been successful, other companies may be
forced to try to adapt their offerings in order to keep pace with rivals. many companies will try to come up with their own
innovations in order to try to benefit from leading change in the market.

Question 16

Adapting to change

Answer 16

Market research and an understanding of general trends in the market are
vital to successfully adapting to change. Identifying subtle changes in what
consumers are looking for in their products allows businesses to adapt
their products to better suit these needs. Whether it be removing sugar
from food products or adding features to mobile phone handsets, changing
earlier than rivals offers a major source of competitive advantage.

Question 17

How competition affects the market

Answer 17

Competition is the feature of business that most stimulates change and
development. This is especially clear in the battle between Apple and
Samsung in the smartphone market.

Question 18

Increased levels of competition create various pressures for businesses:

Answer 18

• The need to drive down costs.
• The need to maintain competitive prices.
• The need to develop innovative products and services.
• The need to maintain high quality of products and services.

Question 19

The difference between risk and uncertainty

Answer 19

A risk is quantifiable, so if statistics show that only 1 in 20 new consumer
goods succeed, the risk involved in launching a new product can be identified and quantified. The factors causing the risk are the uncertainties - those factors that cause a lack of certainty in future events - such as reactions of
rivals, reactions of consumers, reactions of retailers and such unexpected
events as currency movements and economic downturns.

Question 20

Product orientation

Answer 20

Product orientation is an approach to making decisions that considers internal
factors before worrying about changes in the market. This means that
product-orientated businesses can focus on their own key strengths and this
can lead to revolutionary new ideas. However, the danger is that the business fails to adapt its products in line
with what consumers are looking for, which could lead to huge problems.

Question 21

market orientation

Answer 21

more likely to lead to
marketing success since it places consumers’ views and behaviours at the
heart of decision-making within the business.