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A-level Edexcel Business > 1.1.1 - The Market > Flashcards

1.1.1 - The Market Flashcards

1
Q

Consumer goods markets

A

Where products such as food, cosmetics and magazines are sold

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2
Q

Markets for services

A

I.e. individual services (e.g. hairdressing), or business services (e.g. auditing)

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3
Q

Housing market

A

Where people buy, sell, and let property

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4
Q

Commodity markets

A

Where raw materials (e.g. oil, copper, wheat, coffee) are traded

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5
Q

Financial markets

A

Where currencies and financial products are traded

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6
Q

According to the Charted Institute of Marketing, marketing is the management process responsible for…

A

…Identifying, anticipating, and satisfying customer requirements profitably.

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7
Q

Marketing invloves… (1)

A

identifying needs and wants of customers

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8
Q

Marketing invloves… (2)

A

designing products which meet customer needs

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9
Q

Marketing involves… (3)

A

understanding threats from competitors

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10
Q

Marketing involves.. (4)

A

informing customers about products

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11
Q

Marketing involves… (5)

A

charging the ‘right’ price

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12
Q

Marketing involves… (6)

A

persuading customers to buy products

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13
Q

Marketing involves… (7)

A

making products available in convenient locations

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14
Q

MASS MARKET

A

a very large market in which products with mass appeal are targeted

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15
Q

Mass market advantage chain

A

Huge number of customers, many products sold
↓
Businesses produce large quantities at lower unit cost by exploiting economies of scale
↓
Higher sales & higher profits

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16
Q

Mass market disadvantage chain

A

A lot of competition in mass market
↓
Businesses may spend a lot of money on marketing (high cost)

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17
Q

NICHE MARKET

A

a smaller market, usually within a large market or industry

often goes untouched by large companies

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18
Q

Niche market involves…

A

selling to a small customer group, sometimes with specific needs

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19
Q

Small firms can…

A

often survive by supplying niche markets

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20
Q

If a large business joins a niche market they may…

A

find it easy to overrun a smaller rival

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21
Q

Niche market disadvantage ‘chain’

A

Businesses which rely on a single niche market are vulnerable, as they are not spreading their risk.
↓
If they lose grip in their chosen market, they may collapse because they don’t have other back-up products or markets.

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22
Q

Market size can be…

A

estimated or calculated by the total sales of all businesses in the market

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23
Q

Volume is…

A

Physical quantity of products which are produced and sold

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24
Q

MARKET SHARE

A

Proportion of total sales in a particular market for which one or more businesses or brands are responsible.

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25
Q

How is market share expressed?

A

As a percentage

it can be calculated using value or volume

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26
Q

What is the calculation for market share?

A

(Sales of a business/Total sales in market) x 100

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27
Q

Why might the measurement of market share be important? (4)

A

It might indicate a business which is a market leader
↓.
This could influence other companies with smaller market shares to follow the leader or influence the leader to maintain its position.

It may influence the strategies or objectives of a business.

It may be an indication of the success or failure of a business or strategy.

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28
Q

BRAND NAME

A

A feature (e.g. name, term, sign, symbol, design) which allows consumers to identify the goods and services of a business and to differentiate them from those of competitors.

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29
Q

Branding might be used to… (1)

A

Differentiate product from those of rivals

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30
Q

Branding might be used to… (2)

A

Create customer loyalty

31
Q

Branding might be used to… (3)

A

Help product recognition

32
Q

Branding might be used to… (4)

A

Develop an image

33
Q

Branding might be used to… (5)

A

Charge a premium price when a brand becomes strong

34
Q

Businesses need to be able to… in Dynamic markets

A

Adapt

35
Q

Online retailing or e-tailing

A

The retailing of goods online

36
Q

E-commerce

A

conducting business transactions online

37
Q

Benefits of retailing (1) Retailers can market their goods to people who…

A

prefer to shop from home or find it difficult to get to traditional shops

38
Q

Online retailing is easier…

A

to gather personal information from customers so they can be targeted with other future products and offers

39
Q

Selling costs such as…can be avoided

A

sales staff, rent, and other store overheads

40
Q

These savings…

A

May be enormous which allows online retailers to charge lower prices

41
Q

Marketing costs will be…

A

lower. (e. g. sending 1000 people an email vs 1000 news etters by post

42
Q

Online retailers can reach…

A

more customers. (e.g. single highstreet store vs a global website with a large product range.

43
Q

An online retailer is open…

A

24/7. Few stores can match such versatile and lengthy opening hours

44
Q

Online retailers can be more…

A

flexible and easy to update. (e. g. it’s easy to promote a ‘deal of the day’ on a website home page without need for excessive printing material.

45
Q

Factors for growth in the packaging market include (1)

A

increasing urbanisation

46
Q

Factors for growth in the packaging market include (2)

A

investment in construction and housing

47
Q

Factors for growth in the packaging market include (3)

A

development of retail chains

48
Q

Factors for growth in the packaging market include (4)

A

expanding cosmetics and health care sectors in emerging economics

49
Q

Markets in flux means…

A

their structure and nature is subject to constant change {dynamic?}

50
Q

One big source of new markets is from development of…

A

emerging economies (e. g. BRIC - Brazil, Russia, India, China) + others

51
Q

Growth in existing and new markets may occur due to E…(1) {Chain}

A

Economic growth

Global living standards rise > World has more disposable income > Businesses can supply more output to growing global markets.

+ market for more expensive goods will grow

52
Q

Growth in existing and new markets may occur due to I… (2)

A lot of I… emerges through

A

Innovation.

Businesses can create new needs and wants and meet them with products.

Technical research and development

53
Q

S… C… affecting market growth

A

E.g. Decline in number of marriages and growth in number of one parent families increased market size for childcare and housing.

54
Q

Changes in….affecting market growth.

A

Legislation.

E.g Environmental legislation helped growth in renewable energies and green goods

55
Q

D… C… affecting market growth

A

Demographic Changes.
(Changes in market structure)

In most countries populations are ageing.
This will help markets grow, as populations will rise.

56
Q

If businesses do not adapt to change, they risk losing….

Or at worst could…

A

Market share.
Collapse
(E.g. Tesco losing market share to the cheaper alternatives of Aldi and Lidl in 2014)

57
Q

If businesses have F… o… it will be a lot easier to adapt to market changes.

A

Flexible operations.

58
Q

Businesses must undertake regular…M…R…if they desire to stay up-to-date with changing customer needs and wants.
Communicating with…c…and p…customers should be an ongoing process.

A

Market Research.

Current and potential cusotmers.

59
Q

Businesses which I…in new product development are likely to survive for longer in the market

A

INVEST!

60
Q

Advantage of INVESTMENT in new product development

A

A unique new version of a product could rejuvenate sales and help win a larger share of the market.

61
Q

Disadvantage of INVESTMENT in new product development.

+ Potentially greater disadvantage!

A

Expenditure on research and development is costly.

HOWEVER, failure to innovate could carry a greater cost.

62
Q

2 example advantages of CONTINUOUS IMPROVEMENT (a)

A

-Cont. Improvement in efficiency → Costs will be lower and prices can be held or reduced.
-Cont. Improvement in customer service → Customers are more likely to return
-

63
Q

2 advantages of CONTINUOUS IMPROVEMENT (b)

A
  • If new ideas are encouraged → They may gain competitive edge
  • Culture of continuous improvement → Helps businesses be more adaptable in the market
64
Q

If a market is in decline and a business is unable to diversify, they may survive by developing a…

A

Niche.

65
Q

When is a niche strategy appropriate?

A

When groups of loyal customers can be served profitably.

66
Q

[Context of Competition]

Which methods will businesses use to attract customers? (a)

A

Lowering prices.

a

67
Q

[Context of Competition]

Which methods will businesses use to attract customers? (b)

A

Making products appear different to those of rivals

b

68
Q

[Context of Competition]

Which methods will businesses use to attract customers? (c)

A

Offering better quality products

c

69
Q

[Context of Competition]

Which methods will businesses use to attract customers? (d)

A

Using more powerful or attractive advertising or promotions.

d

70
Q

[Context of Competition]

Which methods will businesses use to attract customers? (e)

A

Offering ‘extras’, such as high quality customer service.

71
Q

What are the two ways a business may try to maximise profit potential in a competitive market?

A
  • Purchasing rivals

- Putting obstacles in the way of rivals (to a certain legal degree)

72
Q

A role of governments in markets is to…

A

ensure that competition exists.

This prevents consumers being exploited.

73
Q

Risk and…U…are not the same

A

Uncertainty

74
Q

Generally, businesses do not like U…because

However…

A

Uncertainty. - Because makes decision-making more difficult, particularly when making investments for the future.
However, its consequences aren’t always negative.
(E.g. new technology provides new opportunities.)

A-level Edexcel Business (30 decks)

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