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A Level Business Theme 1 > 1.1.1 The Market > Flashcards

1.1.1 The Market Flashcards

1
Q

Market

A
  • buyers &sellers
  • exchange goods/services
  • exchange of money at a set price
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2
Q

marketing

A

targeting product target market (promote/sell)
4Ps
-market research and advertising
connect with customer

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3
Q

4 Ps

A

price
promotion
product
place (people)

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4
Q

marketing strategy

A

plan of how you are going to achieve your marketing objective
SMART

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5
Q

mass market

A

products or services which are targeted at whole market e.g mars bar

people: generic public, wider population, entire market
product: wide appeal, generic, low quality
promotion: mass media
price: competitive
production: high output, low cost EOS

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6
Q

ADV of mass market

A
  • wide TM = less risk
  • EOS
  • production = cheaper per unit
  • large volume of sales (high revenue, invested into R&D
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7
Q

DIS of mass market

A

1-competitive = differentiate
2-inflexible in production (demand changes) high volume
3-homogeneous (all same) = differentiate = market cost

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8
Q

ADV of niche market

A

1-premium price - profit, competition
2-specific knowledge/skills - easier to target (loyalty)
3-small scale production (flexible/follow trend)

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9
Q

DIS of niche market

A
  • higher unit cost = No EOS
  • risk of overdependence on single market/product
  • risky no constant demand (vulnerable mkt changes)
  • high skill staff
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10
Q

market size

A

total value or volume of sales in market
can be measured in monetary terms (e.g. £20million)
or by amount sold (e.g. 1 million cars)

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11
Q

market size formulae

A

number of units sold x price

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12
Q

market share

A

proportion of total market sales a firm has

sales of one firm divided by total market sales x 100

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13
Q

3 things market share influenced by

A

1-marketing focus
2-economic situation
3-competitors actions

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14
Q

dynamic market

A

constantly changing,

seller respond to the changing needs of buyers improving existing or introducing new ones

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15
Q

5 reasons why are markets dynamic

A 
1-dynamic environment 
2-social trends 
3-changes in technology 
4-competitive environment 
5-consumer tastes

adapt their marketing in respond to these changes, fails to keep up with trends = lose competitiveness

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16
Q

other market

A

relatively slow moving e.g. confectionary

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17
Q

stable market

A

pace of change slow,
market size & share fairly constant little variation price

(innovation: rare, may just consist of minor changes to existing products

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18
Q

markets have changed/how they change

A

technological changes (rise of internet)

how: 
digital economy (affects consumer/producer) 
changes in consumer tastes/preferences (products wanted that meet specific needs (innovation)
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19
Q

online retailing

A

process of buying & selling goods and services over the internet (e-commerce)

20
Q

4 ADVS and 3 DIS of impact of consumer of online retailing

A 
ADV: 
1-convenient - breaks geographical location barrier 
2-range 
3-availability (new products/services) 
4-price transparency

DIS:
1-intangible product
2-delivery issues
3-fraud

21
Q

4 ADVS and 4 DIS of impact of business of online retailing

A 
ADV: 
1-24/7 
2-demand - wider TM 
3-rent payments (cheaper to run)
4-reach global market (fast for growth) 
DIS:
1-competitors (barriers to entry) 
2-increased delivery, storage costs 
3-may have to reduce price 
4-specialist to set up &maintain website
22
Q

digital economy

A

economy built on technologies (internet facilitates this use of technology)

23
Q

3 main areas of digital economy

A
  1. supporting infrastructure
  2. e-business
  3. e-commerce
24
Q

government innovation

A

increasing legislation in an industry - alter way marker operates
(automobile market affected - laws reducing carbon emissions)

25
Q

Brand

A

product specific name,
creation of an identity distinguishes that firm

consumer have perception of what to expect

trademark that cannot be copied
-name, shape, symbol, colour, logo, images, celebrity endorsement

-loyalty & repeat business adding value =higher prices

26
Q

3 Benefits of branding

A
  1. brand extension (willing new products brand loyalty)
  2. brand value
  3. brand personality (take on persona, certain human characteristics)
27
Q

How do businesses respond to changes in market?

3 ways

A
  1. Offensive (increases sales/develop new markets)
  2. Defensive (react to competition & maintain market share)
  3. Mixture
28
Q

market growth

A
  • percentage increase in size of market

- change in size of market divided by original size x100

29
Q

5 ways competition affects market

PORTERS 5 FORCES

A
  1. price a business is able to charge (no of comp)
  2. buying power of customer
  3. selling power of supplier
  4. availability of substitutes
  5. willingness and ability of new firms to enter
30
Q

product innovation

A
  • new technologies = possible create completely new products
  • increase sales / whole new markets = rapid growth

-being innovative = growth

31
Q

process innovation

A
  • using new technology to improve production methods
  • cost reduced without loss in quality
  • through distribution channel, stock control, supply chains
32
Q

situations where businesses may have to assess risk:

A 
helf/safety 
new product by market research 
diversify use cost benefit analysis / benchmarking (match to the best) 
risk making business investment 
risk MR will pay off
33
Q

to reach equilibrium

A

D =S

excess supply when D

34
Q

risk

A

calculate probability/possibility that things will go wrong

calculated/weigh up

35
Q

uncertainty

A

unpredictable and uncontrollable events that affect business
e.g. industrial action (strikes)

sales success for new product launch 
effect of launching price war against comp
external events 
economic variables 
how governments may react to FDI
36
Q

strategies to minimise risk and uncertainty

A
  1. sales forecasting techniques (JIC)
  2. decision trees
  3. liquidity “safe” working capital, acid test/current ration
  4. market research
  5. contingency plans/scenario plans
  6. RISK= loyal customer base developed
  7. broaden product portfolio
37
Q

uncertainty strategies

A

excess cash supplies
decrease number of receivables and no of receivable days given increase payable days to suppliers
diversify
foster agility in decision making

38
Q

risk strategies

A

calculated & diversify risk
increased returns = account for risk
persistent

39
Q

niche market

A

small specific segment of mass (small target market)

40
Q

economies of scale

A

factors cause cost per unit to fall when firm operates at higher level of production

41
Q

unique selling point

A

consumer benefit no rival can match

42
Q

product differentiation

A

extent to which consumers perceive brand/product as different from others

43
Q

Issues with dynamic markets:

A
  1. Online retailing
  2. Markets changing (PESTLE)
  3. Innovation/market growth
  4. Adapt to changes
44
Q

Increased competition = various pressures….

A
  1. Drive down costs
  2. Maintain competitive prices
  3. Develop innovative products
  4. Maintain high quality
45
Q

ICT supports market research

A
  1. Company website
  2. Social media
  3. Database technology

A Level Business Theme 1 (24 decks)

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