business paper 1 Flashcards
what is a market ?
any place that buyers and sellers come together to exchange goods or services
what is a mass market ?
business sells into the largest part of the market, where there are many similar products by competitors
what is a niche market?
smaller market where customers have more specific and demanding needs and wants
what is revenue
units sold x selling price
income received deom products sold
what is profit
total revenue - total costs ( fixed costs + variable costs)
what is market size
indicates the potential sales for a firm measured in terms of both volume and value
number of units sold x price
market growth
a key indicator for exisiting and potential entrant
what is market share
this means the proportion of a marjet that is taken by a business , product or brand
( sales of one firm / totalmarket sales ) x 100
what is a market map
a visual tool used by a business to identify the different brands selling similar products in one market based on 2 variables to compare against
pros of a market map ?
- helps find gaps in the market
- can use this as research
- easy to create
cons of a market map
- can be biased
- less reliable
- limited variables
- time consuming
what is a dynamic market ?
one that is subject to rapid or continuous changes
e.g. taxi , film
key sources of change in a dynamic market?
customer tastes amd prefrences
impact of technology
new market entrances
factors affecting chnage ?
demographic economic social etics enviroment competition technology
what is ecomerce
electronic retailing
what is m comerce
mobile retailing
pros of online retailing
reduced fixed costs more people to sell to 24 h access make chnages quicker easy to set up more flexibility
cons of online retailing
no try before you buy
may need to train workers
risk of fraud
more maintance
what is degree of competition
number of firms that exist within a market selling the same or similar products or services
competition will affect the markets ?
prices buying power selling power availablity willingness
what are the 4 Ps
product
price
place
promotion
what is invention
formulation of new ideas for products or processes
what is inovation
practical application of new ineventions into marketable products or services
what are the two types of inovation
product inovation = launching new or improved products
process inovation = better or more effective ways of producing existing products
capital intensive
machinery , automation
colour intensive
human
what is risk
possibilty that things will go wrong , can be assessed and managed
what is uncertainty
the unpredictable and unctrolable events that affect the business
what is product orientation
product capabilities are the most important factor when designing and creating product
what is market orientation
consumer is the most important factor when providing products fpr the market
what is primary research
involves collection of first hand data that did not exist before
examples of primary research
questionaires observations loyalty cards focus groups consumer panels test marketing
what is secondary
research that has been already been undertaken by another orginisation and therefore already exist
what is a sample
a group of subjects that has been chosen from a larger popultion for investigation
3 types of samping
random
quota
stratified
what will the value of sampling depend on ?
rechnique used
how was the sample was carried out
size of the sample
what will the size of the sample depend on
budget available
importance of accuracy
degree of confidence in results
what is market segmentation ?
dividing the population into groups of individuals where consumers share one characteristcs or needs
main categories of market segmentation
demographic
geographic
income
behavioural
competitive advantag
a feature of a business that allows it to perform more successfully than others in the market
what is a USP
unique selling point is a feature that distingushishes a firms product from those of its competitors
what does product differentiation allow
charge premium prices
gains brand loyalty
add value
what is added value
the difference between the price that is charged to the customer and the cost of inputs required to create product
how do businesses add value
design
technology
production
marketing
formula for added value
reveneu - costs = added value
what is demand
the quantity that consumers are willing and able to buy at a given price at a given time
what is contraction
decrease in demand
what is extension
increase in demand
price of a product = movement on the demand curve
factors affecting shift of demand
advertising price of subsititute price of complimentry goods income levels trends seasonality demographics external shocks
what is supply
quantity of a good that producers are able to offer to the market at a given price at a given time
an increase in supply will shift the curve right
a decrease in supply will shift keft
causes of changes in market supply
future expantions external shocks technology taxes and subsidies production costs price of other goods
what is elasticity
measures the responsiveness of demand to a change in a relevant variable
what is price or demand elasticity
measures the extent to which the quantity of a product demanded changes in response to a change in price
PED formula
% change in quantity demand
_________________________
% change in price
PRICE ELASTIC
PED = MORE THAN 1
PRICE INELASTIC
PED = LESS THAN 1
UNITAY PRICE
PED = 1
if PED > 1 then a change in price will cause a larger change in demand
factors influencing PED
availability of substitutes income frequency of purchase branding time nature of the good
what is an inferior good
as incomes consumers rise demand falls
what is a normal / luxury good
as income rise - demand rises
what is a necessity good
not affected by income goods with addictive nature, not affected by income changes but maybe buy cheaper options
what is YED
income elasticity of demand
is a way to measure the extent to which the quantity of a product demanded is affected by a change in income
formula for YED
% change in quantity demanded
__________________________
% change in income
what are the three elements of the design mix
function
aesthetic
costs
what is the design mix
three aspects of design that companies need to consider when developing a product
what is promotion
an element of the marketing mix which is used by businesses to communicate and generate awareness to its current and potential customers about their products
what are the 4 Ps
product
price
placement
prmotion
what are promotions designed to do
to create awareness , interest, desire and action
what are all of the types of pormotion
advertising public relations sponsorship / endorsement sales offers direct selling digital
factors affecting promotion
size of business stage of life cycle type of product economic climate age of target market external factors
what is a brand
a product that is easily distinguished from other products so that it can be easily communicated and effectively marketed
benefits of having a strong brand
added value ability to charge premium prices customer loyalty repeat purchases higher market share
ways to build a strong brand
USP
advertising
sponsorship
types of brands
product brands service brands umbrellas brands own label brands global brands
what is price
the amount of money that the consumer has to pay to receive he good or service
what are the 8 pricing strategies
cost plus competitive price skimming penetration predatory phycological premium promotional
what is the product life cycle
a theoretical model which describes the stages of a product does through over its life. measured on time v sales
what are the 4 stages of a product life cycle
r and d
growth
introduction
maturity
what happens during r and d
cost very high
no sales
high investment
high levels of innovation
what happens in the growth stage
high sales
high costs for promotion
lots of cash inflow
still at a slight lost
what happens during the introduction stage
high sales high costs for promotion lots of cash inflow still not at break even high demand
what happens during the maturity stage
less sales than growth strong reputation good innovation high output levels high profit
what happens during the decline stage
falling sales
high market saturation
more competitors leave the market
decline in
reasons why porducts enter decline stage
tech advancements chnages in consumer tastes and behaviour increased competition failure to innovate economic factors
ways to ectend product life cycle
lower prices promotion re breanding product innovation target into new markets expansion
what is a marketing portfolio
analysis toool that illustartates the performance of a companies products based on level of market share and market growth
what are the 4 sections of the boston matrix
question marks / probelm child
stars
dogs
cash cows
what are the features of a star
productions remains consistent
customer loyalty
econmies of scale
high market share and market growth
what are the features of a qm / pc
just launched
high market growth but has a low market share
products should be invested as market share grows
what are the features of a cash cow
high market share low market growth
recahing maturity stage
still have customer loyalty
products should still be produced
what are the features of a dog
competitors to leave the market
low market share and low market growth
what is a marketing startergy
plan / method / way of acheiving the medium to long term actions required to reach the companys goals or targets
what is b2b
businesses selling to other businesses
what is b2c
businesses selling to the public / consumer
3 ways to gain customer loyalty
loyalty schemes
customer service
physcial enviroment
what is approaches to staffing
the overall way in which a business treats its staff
what is hard hrm
treats their staff as a cost , treated as a ersource that needs to be managed
what is soft hrm
staff treated as an asset
can contribute an help the business acheive its objectives
what is flexible working
working arrangements where there are a variety of options offered to employees in terms of working time , location and the pattern of working
what is home / remote working
this is when the employee deceids that they want to work away from the business and work at home or a differnet location
what is flexible hours
this is when the employee decieds how they would like to spread their hours of working over a given time period
what is outsourcing
a third party company that specializes in the role and can be hired on a contract
what is redundacy
workers job no longer exists possibly due to lack of business or restructing
why could workers be dissmissed from their job
absenteesim
gross misconduct
theft of company moeny or property
what is volunatry redundancy
some staff retire and take voluntary redundancy to gain a pay out
what is compulasry redundancy
member of staff must / is required to leave the job
what are the stages of the requirement process
cv / qualifications
interveiws
on site
phone calls
what is recruitment
the steps undertaken by a business to identify a vacancy and attract suitable candidates
what is selection
making decision on choosing the right candidate for the position available
what is contained in a job description
job title
department
what is contained in a person specification
qualifications
skills
experience
knowledge
what is orginisational structure
the way in which the workforce within a firm is organised
what is heirarchy
the layers/ levels of management within an orginisation
