1.1.1 - The Market

Question 1

Definition of Markets

Answer 1

A Market is any place that buyers and sellers will come together to
exchange goods or services. There will normally be an exchange of money at a set price

Question 2

Definition of Marketing

Answer 2

The department tasked with targeting the right product for the right target market using the right combination of price, promotion and place (4P’s)

Question 3

Definition of Mass Market

Answer 3

The attempt to create products or services which is targeted at
the whole market e.g. Mars Bar

Question 4

Definition of Niche Market

Answer 4

The attempt to create products or services which is targeted
toward a specific segment of a market e.g. Hotel Chocolat

Question 5

Definition of a Brand

Answer 5

A brand is a product produced by one business using a specific name. Branding involves the creation of an identity for the business that distinguishes that firm and its products from other firms

Question 6

Competitive Advantage

Answer 6

Competitive advantage is a feature of a business that allows it to perform more successfully than others in a market.

Question 7

Degree of Competition

Answer 7

Number of firms that exist within a market

Question 8

Product Innovation

Answer 8

Occurs when new technologies make it possible to create completely new products.

Question 9

Process Innovation

Answer 9

Means using new technology to improve production methods, so that costs are reduced without a loss in quality. This could also be through distribution channels, stock control system & supply chains

Question 10

Definition of Market Size

Answer 10

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

Question 11

Market Share

Answer 11

This is the proportion of total market sales that a firm has

Sales of one firm / Total market sales x 100

Question 12

Definition of Dynamic Market

Answer 12

A market that is constantly changing. Sellers respond to the
changing needs of buyers by improving existing products and services or introducing new ones.

Question 13

Definition of Stable Market

Answer 13

A market in which the pace of change is slow; market size & market share are fairly constant with little variation in price. Innovation is rare and may just consist of minor changes to existing products.

Question 14

Definition of Online Retailing

Answer 14

The process of buying and selling goods and services over the internet, also known as e-commerce or e-tail.

Question 15

Digital Economy

Answer 15

An economy built on technologies. The internet facilitates the
use of this technology

Question 16

Government Intervention

Answer 16

Increasing legislation in an industry can alter the way the market operates, e.g. the automobile market has been affected due to laws reducing carbon emissions.

Question 17

Market Positioning

Answer 17

How individual products or brands are seen in relation to their competition by the consumers. This may stem from pricing, marketing or quality.

Question 18

Product Differentiation

Answer 18

Occurs when businesses make their product different from competing products. This may involve giving it unique features.

Question 19

Definition of Added Value

Answer 19

The value of the finished good or service over and above
the cost of achieving it. This is achieved when a business increases the worth of its factor inputs by creating new output