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A level Edexcel business > 1.1.1 The market > Flashcards

1.1.1 The market Flashcards

1
Q

What is a Mass market?

A

A larger section of the market in which products are aimed at a broad range of consumers

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2
Q

What is a Niche market?

A

A smaller section of a larger market in which a specific product meets the needs and wants of consumers which isn’t already being addressed by another business

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3
Q

Characteristics of a Mass market

A
  • Generic products which are broadly similar in form and function
  • Low average costs due to large scale production (economies of scale)
  • Low prices lead to greater affordability and higher sales volumes
  • More competition
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4
Q

Characteristics of a Niche market

A
  • Products are more specialised and unique as they are aimed at narrow market segments
  • High average costs due to small scale production
    so don’t benefit from economies of scale
  • High prices can allow businesses to earn higher profit margin
  • Less competition
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5
Q

What is a Market segment?

A

A section of a market in which consumers share similar needs and wants

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6
Q

What is Sales volume?

A

Number of products sold

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7
Q

What is Sales revenue?

A

Financial value of the units sold

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8
Q

What is Market share?

A

Amount sold by a business as a percentage of the total market

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9
Q

What is a market?

A

Any arrangement that allows buyers and sellers to communicate and exchange a particular range of products and services

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10
Q

Advantages of Niche markets

A
  • Less competition
  • Can charge a high price
  • Customers are more loyal
  • Products meet consumer needs and wants
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11
Q

Disadvantages of Niche markets

A
  • Fewer potential customers
  • Vulnerable to market change
  • Hard to persuade retailers to stock products
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12
Q

Advantages of Mass markets

A
  • Higher volumes of sales mean businesses can afford larger advertising and marketing campaigns
  • Larger scope for economies of scale
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13
Q

Disadvantages of Mass markets

A
  • Fierce competition as their is potential for high sales
  • Without a USP its hard to survive
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14
Q

What is a Brand?

A

A recognisable logo which distinguishes a product from its competitors

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15
Q

Advantages of having a strong brand

A
  • Inspires customer loyalty so repeat purchases and recommendations are made
  • Can charge higher prices
  • Retailers will want to stock up top selling brand
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16
Q

What does Differentiation mean?

A

Making the product stand out from competitors e.g. by using a USP

17
Q

What is a Competitive advantage?

A

An advantage held over competitors gained by offering consumers greater value e.g.
- changing prices
- advertising
- better customer care
- differentiation

18
Q

What is a Dynamic market?

A

A market which is subject to rapid change and so customer demand is unpredictable

19
Q

What does Online retailing involve?

A

Selling products via the internet

20
Q

Advantages of Online retailing

A
  • Provides business access to more consumers
  • Enables longer trading hours as the business is open 24/7
  • Cheaper to run as it lowers fixed and variable costs
  • Businesses can collect data by tracking consumer behaviour which helps with primary market research
  • Consumers can shop at a time that suits them
21
Q

Disadvantages of Online retailing

A
  • There may be high costs for website development, maintenance, and promotion
  • Online retailing is dominated by larger businesses that are more well-known
  • High levels of competition mean that it will be expensive to make a website stand out
  • There is a lack of personal contact with customers
    and so consumers may find it difficult to get the desired level of customer service
  • Consumers may find it difficult to return unwanted products
  • Online purchasing opens consumers up to credit card fraud
22
Q

Why do markets change?

A

As a result of major external influences

23
Q

What are the factors that cause markets to change?

A
  • Changing consumer tastes and preferences e.g. consumers desiring electric vehicles in place of petrol cars
  • Changing demographics e.g many developed countries have an increasingly older population who have different wants and needs to previous markets
  • The amount of competition e.g. international trade means larger market sizes but also more competition between an increasing number of firms
  • Changing legislation e.g. laws around environmental standards create new markets
24
Q

What is Market size?

A

Total number of sales in £ in a market

25
Q

What is Product innovation?

A

Adaptation or improvement of existing products

26
Q

What is Process innovation?

A

Adaptation or improvement of existing processes

27
Q

What is Market growth?

A

The measurement of the change in the entire market and is expressed as a percentage of the original size

28
Q

What causes Market growth?

A
  • Increasing population sizes can increase demand in certain markets
  • Increasing disposable incomes can increase demand in certain markets
  • Changing tastes and preferences can cause the market to grow e.g. the growth in the electric car market
29
Q

What is a benefit of adapting to change?

A

Allows businesses to thrive in dynamic markets

30
Q

What are the ways to adapt to change?

A
  • Create flexible business structures, especially in terms of operations and people management
  • Meet customer needs, by carrying out market research and communicating with customers
  • Invest in staff training, new products and processes
  • Innovate so as to gain the first mover advantage
31
Q

When does Competition occur?

A

When at least two businesses are providing goods to the same target market and the more businesses in the market, the more intense the competition

32
Q

Advantages of competition for consumer

A
  • Businesses offer lower prices
  • Businesses produce better quality products
  • Businesses provide better customer service
33
Q

What is meant by Risk?

A

Potential threat to business success and can be internal or external

34
Q

What is meant by Uncertainty?

A

When outcomes are difficult to predict

A level Edexcel business (9 decks)

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