1.1.1 The market

Question 1

What is the definition of a mass market

Answer 1

• The largest part of a market, where there are many similar products offered by other companies and consumers are less specific about their wants and needs.

Question 2

What is the definition of a niche market

Answer 2

• Smaller segment of a larger market, where consumers have more specific demands

Question 3

What are some features of mass markets

Answer 3

• Customers specific wants and needs are less specific
• Customers form the largest part of the market
• High production output and low unit costs, EOS

Question 4

What are some benefits from mass marketing

Answer 4

• Widest audience available
• Lower risk, resources focused on one large market

Question 5

What is the definition of Market size

Answer 5

Total volume or value of sales within a market

Question 6

What is defined as Market share

Answer 6

• The proportion of total market sales a business or product holds

Question 7

What are some advantages of targeting a niche market

Answer 7

• Lower competition
• Can often charge a higher price due to consumers having more specific needs and wants (inelastic)
• Can gain more loyal customers

Question 8

What are some disadvantages of niche market

Answer 8

• Lack of economies of scale
• Vulnerable to rapid changes in market, all eggs in one basket
• If successful, may attract competition from larger firms

Question 9

What are known as dynamic markets

Answer 9

• Markets which are subject to continual and rapid change

Question 10

What are factors which determine how dynamic a market can be

Answer 10

• Changing consumer preferences
• Impact of technology
• Impact of new market entrants
• Changes of legislation

Question 11

How does intense competition affect the market

Answer 11

• Price wars
• Incentives to innovate and develop new products to gain market share
• Pressure to differentiate products against competitor

Question 12

What is an competitive advantage

Answer 12

• Where the business may have an advantage over other firms when it comes to producing a good or service

Question 13

What are ways firm can gain comp adv.?

Answer 13

• Be more innovative than rivals]
• Be more efficient than rivals
• Offer higher quality than rivals

Question 14

What is the definition of risk

Answer 14

• The possibility that events will not occur as planned.

Question 15

What is the definition of uncertainty

Answer 15

• The unpredictable and uncontrollable events that affect business decisions and actions