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January Business Mock > 1.1.1 The Market > Flashcards

1.1.1 The Market Flashcards

1
Q

Market

A
  • buyers &sellers
  • exchange goods/services
  • exchange of money at a set price
production
product
promotion 
price 
place/people
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2
Q

marketing

A

the department tasked with targeting the right product for the right target market using the right combination of price promotion product and place (4Ps)

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3
Q

4 Ps

A

price
promotion
product
place

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4
Q

marketing strategy

A

plan of how you are going to achieve your marketing objective
SMART

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5
Q

mass market

A

products or services
targeted at whole market e.g mars bar

people: generic/wider pop
product: wide, low quality
promotion: mass media
price: competitive
production: high output, low cost EOS

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6
Q

ADV of mass market

A

1-wide TM = less risk
2-EOS
3-cheaper unit production cost (large)
4-large vol of sales = high revenue, invest in R&D

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7
Q

DIS of mass market

A

1-competitive = differentiate
2-not flexible in production (demand changes) high volume
3-homogeneous (all same) = differentiate = market cost

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8
Q

ADV of niche market

A
  • premium price = profit
  • less competition
  • specific knowledge/skills
  • smaller customer easier to target (loyalty)
  • small scale production (flexible/follow trend)
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9
Q

DIS of niche market

A
  • higher unit cost = No EOS
  • risk of overdependence on single market/product
  • risk = demand not constant (vulnerable to market changes)
  • high skill staff
  • small market = less demand
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10
Q

market size

A

total value or volume of sales in market
can be measured in monetary terms (e.g. £20million)
or by amount sold (e.g. 1 million cars)

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11
Q

market size formulae

A

number of units sold x price

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12
Q

market share

A

proportion of total market sales a firm has

sales of one firm divided by total market sales x 100

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13
Q

3 things market share influenced by

A

1-marketing focus
2-economic situation
3-competitors actions

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14
Q

dynamic market

A

constantly changing,

seller respond to the changing needs of buyers improving existing or introducing new ones

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15
Q

5 reasons why are markets dynamic

A 
1-dynamic environment 
2-social trends 
3-changes in technology 
4-competitive environment 
5-consumer tastes

fails to keep up with trends = lose competitiveness

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16
Q

other market

A

relatively slow moving e.g. confectionary

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17
Q

stable market

A

pace of change is slow,
market size and share are fairly constant little variation in price
(innovation: rare, minor changes to existing products

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18
Q

markets have changed/how they change

A

technological changes (internet)

how:
digital economy
changes consumer tastes

19
Q

online retailing

A

process of buying & selling goods and services over the internet (e-commerce)

20
Q

ADVS and DIS of impact of consumer of online retailing

A

ADV:

  • convenient - breaks geographical location barrier
  • wider range (greater choice
  • wider availability (new products/services)
  • more price transparency

DIS:

  • intangible product
  • delivery issues
  • fraud
21
Q

ADVS and DIS of impact of business of online retailing

A

ADV:

  • 24/7 sales always online
  • increase demand - wider target market
  • reduced rent payments
  • small can reach global market (fast for growth)
  • cheaper to run

DIS:

  • more competitors (less barriers to entry)
  • increased delivery, storage costs
  • may have to reduce price
  • specialist to set up &maintain website
22
Q

digital economy

A

economy built on technologies (internet facilitates this use of technology)

23
Q

3 main areas of digital economy

A
  1. supporting infrastructure
  2. e-business
  3. e-commerce
24
Q

government innovation

A

increasing legislation in an industry - alter way marker operates
(automobile market affected - laws reducing carbon emissions)

25
Q

Brand

A

product produced by one business using a specific business
creation of an identity for the business distinguishes that firm and product (other firms)

consumer have perception of what to expect

trademark not copied
-name, shape, symbol, colour, logo, images, celebrity endorsement

-build loyalty & repeat business as well as adding value =higher prices

26
Q

branding

A

add value
charge higher prices
brand loyalty continue to buy

27
Q

3 Benefits of branding

A
  1. brand extension (new products willing to try new products on brand loyalty)
  2. brand value
  3. brand personality (take on persona, certain human characteristics)
28
Q

How do businesses respond to changes in market?

3 ways

A
  1. Offensive (increases sales/develop new markets)
  2. Defensive (react to competition & maintain market share)
  3. Mixture
29
Q

market growth

A
  • percentage increase in size of market

- change in size of market divided by original size x100

30
Q

marketing

A
  • action/process of promotion & selling products or services
  • market research and advertising
  • how business connects with customer (include 4Ps)
31
Q

5 ways competition affects market

A
  1. price a business is able to charge
  2. buying power of customer
  3. selling power of supplier
  4. availability of substitutes
  5. willingness and ability of new firms to enter
32
Q

degree of competition

A
  • number of firms that exist in a market

- range from a monopoly (one firm dominates industry) where there are any buyers and sellers

33
Q

product innovation

A
  • occurs when new technologies make it possible to create completely new products
  • increase sales / whole new markets = rapid growth

-being innovative = growth

34
Q

process innovation

A
  • using new technology to improve production methods
  • cost reduced without loss in quality
  • through distribution channel, stock control, supply chains
35
Q

risk

A

(calculated) probability/possibility that things will go wrong
(calculated/weigh up)

36
Q

situations where businesses may have to assess risk:

A

help/safety = risk product breaches regulations
weigh up risk of new product by market research
whether to diversify use cost benefit analysis / benchmarking (match to the best)
risk making business investment
risk MR will pay off

37
Q

uncertainty

A

unpredictable and uncontrollable events that affect a business

  • about sales success for new product launch
  • effect of launching price war against competition
  • external events
  • economic variables
  • how government may react to FDI
38
Q

to reach equilibrium

A

D =S

excess supply when D

39
Q

risk

A

calculate probability/possibility that things will go wrong

calculated/weigh up

40
Q

situations where business need to assess risk

A

health/safety
new product MR. (Payoff).
diversify use cost benefit analysis, benchmarking (match to best)
making business inv

41
Q

uncertainty

A

unpredictable and uncontrollable events that affect business
e.g. industrial action (strikes)

sales success for new product launch 
effect of launching price war against comp
external events 
economic variables 
how governments may react to FDI
42
Q

strategies to minimise risk and uncertainty

A 
sales forecasting techniques (JIC) 
decision trees 
ensure liquidity "safe" working capital, acid test/current ration 
market research 
contingency plans/scenario plans 
RISK= loyal customer base developed 
broaden product portfolio
43
Q

uncertainty strategies

A

excess cash supplies
decrease number of receivables and no of receivable days given increase payable days to suppliers
diversify
foster agility in decision making

44
Q

risk strategies

A

take calculated risk
diversify = spread risk
look for increased returns to account for risk
be persistent

January Business Mock (15 decks)

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