1.1.1 The Market

Question 1

Define market

Answer 1

a market is a place where buyers and sellers come together to exchange goods and services usually for money at a set pice

Question 2

define mass market

Answer 2

mass market is when a business targets a large target market e.g milk

Question 3

define niche

Answer 3

niche market is when a business targets a smaller segment of the market e.g football shoes

Question 4

what are the key features of a mass market

Answer 4

• customers for the majority of the market
• economies of scale (bulk buying
• customers needs and wants are more general and less specific
• success is usually associated with low cost operation or market-leading brands

Question 5

what are the key features of a niche market

Answer 5

• can often charge higher prices
• target market is well defined with distinct characteristics
• identifying small unsatisfactory gaps in the market
• promotional activities will be targeted at a small sub section of the market.

Question 6

what are the benefits of mass-market

Answer 6

• widest potential customer base
• lower risk
• low unit costs form economies of scale-bulk buying
• market research cost are cheaper

Question 7

what are the benefits of niche market

Answer 7

• customers tend to be more loyal
• less competition
• profit margin tends to be higher
• builds specialist skills and knowledge
• can often charge a higher price
• clear focus-target particular customers

Question 8

what are the benefits of niche market

Answer 8

• customers tend to be more loyal
• less competition
• profit margin tends to be higher
• builds specialist skills and knowledge
• can often charge a higher price
• clear focus-target particular customers

Question 9

what are the drawbacks of a niche market

Answer 9

• lack of economies of scale - bulk buying
• vulnerable to market changes
• likely to attract competition of successful
• the risk of over dependence on a single product or market

Question 9

what are the drawbacks of a niche market

Answer 9

• lack of economies of scale - bulk buying
• vulnerable to market changes
• likely to attract competition of successful
• the risk of over dependence on a single product or market

Question 10

what is market share

Answer 10

the proportion of total market shales that a firm has.This is shown as a percentage

Question 11

how do you calculate market share?

Answer 11

(sales of one firm/total market sales)x100

Question 12

what is branding

Answer 12

a brand is a product a business creates using a specific name, logo,shape, colors, symbol

Question 13

what are the benefits of building a brand

Answer 13

• adds value
• customers/consumers will recognize product
• helps build customer loyalty and repeat business

Question 14

what are the benefits of building a brand

Answer 14

• adds value
• customers/consumers will recognize product
• helps build customer loyalty and repeat business

Question 15

what is a dynamic market

Answer 15

a dynamic market is a market that is always changing

Question 16

what factors might affect the market changing

Answer 16

• trends
• consumer tastes
• competition
• technology

Question 17

why might a business need to keep up with the dynamic market

Answer 17

if they don’t keep up with the dynamic market they might lose competitiveness

Question 18

what is the calculation for market growth

Answer 18

(change in market size/original size)x100

Question 19

what is the definition for innovation

Answer 19

a new idea or invention created which has not been created before

Question 20

how does competition impact the market

Answer 20

• the price a business is able to charge
• the buying power of the business-supply
• the selling power of the business
• availability of substitutes e.g coca-cola &pepsi
• willingness and ability for new firms to enter the market

Question 21

what is the difference between risk and uncertainty

Answer 21

risk:
    -measurable
    -possible to calculate
uncertainty:
    -not measurable
    -not possible to calculate