business Flashcards
how do businesses make money?
by selling goods + services in market
what are markets?
where buyers and sellers meet to exchange goods
do people need to meet to trade goods?
no
what does marketing do?
helps a business sells its products & satisfies customers to result in profit
what does marketing involve?
(4 p’s: product, promotion, price, place)
-identifying needs + wants of
consumers & designing product that meet these needs
-telling customers about products + persuading them to buy
-charging the right price
-making products available in
convenient locations
how can market size be estimated?
-using value
-using volume
formula for market share
sales of a business/total shares in market x 100
why do firms need money?
-to start
-day to day costs
what two categories do expenditure fall into?
capital expenditure:
spending on items that can be used
repeatedly
revenue expenditure:
payments for goods & services that have already been used or will be soon
marketing objective
the targets the marketing department must achieve
marketing strategy
the medium-long term plan for meeting the marketing objectives, delivered though the marking mix
marketing mix:
the plan for getting the right blend of product, price, promotion and place
market segmentation
spliting consumers based on age, gender or income to find areas that
are underserved
examples of marketing objectives:
-to introduce new products that meet customer needs
-to strengthen/build brand image
-successfully advertise new products
niche market - key features
-targets small segments of markets
-little competition
-small level production
-higher prices can be charged
-focus on quality, with less products some
niche markets - drawbacks
-vulnerable to changes in the market
-risk of dependence on one
product
-large companies may exploit the market
niche market - benefits
-no competition, easier success
-higher prices, higher proft margin & more revenue
-suitable for small businesses
niche markets - the aim
-to meet the needs + wants of the specific market with specialised product
niche markets - examples
organic ford, rolls royce, fairtrade chocolate
mass market - key features
-more competition
-targets large segments of the market -potential for more sales
-large scale production
mass markets - aim
-to meet the needs and wants of many people
-mass production
-buying in bulk
-to become market leader
-to earn high profit
-to build brand image
mass markets - benefits
-likely to have lots of customers
-sometimes overtake competition
-economies of scale can buy in bulk
-higher revenue/sales volume
mass markets - examples
toothpaste, crisps, shampoo
risks
exist because entrepeneurs commit resources that could be lost
uncertainty
exists because businesses operate in an ever-changing environment
marketing
a range of activities to support the process of communicating with customers, with the goal of selling them products that meet their needs
market size
-potential sales for a firm
-measured in volume (units) and value (sales)
-not normally a marketing objective
market share
the amount of sales that a
business receives from the market
benefits of being market leader
-more loyalty/brand recognition
-economies of scale when mass producing
-barriers to entry (new brands can’t enter easily so more people are likely to purchase brand leaders)
-more space dedicated to brand leaders in stores
branding
-a brand can be given a personality which helps it to be remembered
-effective branding helps a business establish a successful niche market and achieve product differentiation
dynamic market
a market that constantly changes
sources of change
-trends
-seasons
-pay rises
-economic change
-culture
-holidays
-technology changes
-pandemics
-customer tastes and preferences
-new market entrants
innovation
-having new, unique ideas and putting them into action
-the commercially successful exploitation of ideas
