1.1.1 THE MARKET

Question 1

characteristics of mass markets

Answer 1

-products are less unique
-lower average costs
-economies of scale can be achieved
-lower profit margins

Question 2

characteristics of niche markets

Answer 2

-products are more specialised
-higher average costs
-don’t benefit from economies of scale
-higher profit margins

Question 3

what’s a dynamic market

Answer 3

market that’s constantly changing

Question 4

4 areas to consider when examining a dynamic market

Answer 4

1) online retailing
2) how markets change
3) innovation and market growth
4) adapting to change

Question 5

what is risk ?

Answer 5

the potential threat to a business success

Question 6

what is uncertainty

Answer 6

when outcomes are difficult to predict

Question 7

example of risks

Answer 7

• technical failures
• cyber security threats
• currency fluctuations

Question 8

examples of uncertainty

Answer 8

• will the economy go into recession ?
• what will happen to interest rates ?

Question 9

what is market share

Answer 9

the percentage of total sales within a market that a company or product holds

Question 10

define differentiation

Answer 10

the process of distinguishing a product or service from competitors in ways that create unique value for customers.

Question 11

benefits of adapting to market change

Answer 11

• staying competitive
• meeting evolving customer needs
• seizing new opportunities
• improving business resilience
• maintaining relevance in dynamic industries.

Question 12

drawbacks of not adapting to market change

Answer 12

• loss of market share
• reduced competitiveness
• missed growth opportunities

Question 13

how to calculate market share

Answer 13

(businesses sales revenue / total markets sales revenue) x 100