Business Theme 1.1

Question 1

Mass Market - Explain.

Answer 1

A product is sold to all consumers in the same way

Question 2

Benefits of mass marketing

Answer 2

-Widest Customer Base
-Lower risk-resource focused on one large market
-Low units cost from economies of scale
-Market research costs relatively low.

Question 3

Disadvantages of mass marketing

Answer 3

-Lots of competition
-Large products require expensive branding
-High volume production not flexible to demand changes

Question 4

What are niche market characteristics?

Answer 4

A small segment of a much larger market. Sales will be lower but prices can be higher.

Question 5

Advantages of Niche Markets

Answer 5

-Charge higher price
-Low competition due to customers being loyal

Question 6

Disadvantages of Niche Markets

Answer 6

-Small segment of a much larger market
-Lack of EOS
-Risk of over dependance on a single product or market
-Likely to attract competition if successful
-Vulnerable to market changes

Question 7

Market Size Formula?

Answer 7

Sales of x/Total sales in whole market x 100

Question 8

Dynamic Market - explain

Answer 8

A market that is changing quickly

Question 9

Why is online retailing a dynamic market?

Answer 9

It is constantly changing, developing, expanding and offering customers new products.

Question 10

Adv of “Online retailing”

Answer 10

-Opportunities to grow
-Stock can be easily withdraw or updated due to dynamic market change
-Low overheads
-Easily become international
-Orders can be taken automatically
-Easy to set up
-Open 24/7
-Flexible hours
-Customers prefer online browsing than going into a shop

Question 11

Disadv of “Online Retalining”

Answer 11

-Security issues
-Owners need IT skills
-Issues with sending goods back will put off the customer
-Competitors
-Problem with fraud
-VERY competitive market

Question 12

What is meant by “Niche Market”

Answer 12

A small group from a large group of a market.

Question 13

Definition of Primary Research

Answer 13

Data collected first hand for a specific research purpose

Question 14

Definition of Secondary Research

Answer 14

Data already exists and which has been collected for a different purpose

Question 15

Different types of Primary Market Research

Answer 15

-Focus Group
↪Having a bunch of customers in a room and have their thoughts and opinions on a new product.

-Interviews
↪Interviews with suppliers or with customers

-Surveys
↪Online surveys will give the business the feedback form their customers.

-Mystery Shoppers
↪People who experience the customer service and report their findings back to the business.

-Product Testing & Trial
↪Gaining insight and feedback of a product before being released to the public

Question 16

Advantages of Primary Market Research

Answer 16

-Directly focused to the research objectives
-Research is up to date
-More detailed insights

Question 17

Disadvantages of Primary Market Research

Answer 17

-Time consuming
-Risk of survey bias
-Quite Expensive

Question 18

Types of Secondary Market Research

Answer 18

-Mark Report
↪Varies amounts of market report.
Specialised in sectors

-Trade & Industry Associations
↪Organisation of multiple similar businesses in a sector.

-Sales Transactions
↪Gather data from each transaction

-Big Data
↪Many transactions are recorded including digital transactions.

-Analytics
↪Marketing efforts through data visualisation.

Question 19

Advantages of Secondary Market Research

Answer 19

-Often free and easy to get
-Good source of market insight
-Quick to access and use

Question 20

Disadvantages of Secondary Market Research

Answer 20

-Can be quickly out of date
-Not always specific to research needs
-Specialist report often quite expensive

Question 21

What are the 4 P’s

Answer 21

-Product
-Price
-Place
-Promotion

Question 22

What is Positioning Maps

Answer 22

A positioning map can be produced by a business in order to try and find any gaps in the market

Question 23

What are the axis for positioning Maps?

Answer 23

They can be anything as long they are the opposite. For example, “Expensive” and “Cheap”

Question 24

Advantages of Positioning Maps

Answer 24

-Helps a business look at different competitors
-Can support marketing and decision making in terms of the marketing mix includes price,promotion
-Can assist in repositioning a product/brand in light of the findings about consumer perceptions
-Can help the research and development of new products

Question 25

Disadvantages of position maps

Answer 25

-2 dimensional therefore only one attributes can be analysed on one map
-The information needed to plot the maps can be expensive to obtain, requiring the use of primary research
-There may also be a difference between consumers’ perception of the brand’s benefits and the actual benefits
-Less useful to assess a corporate brand image however more useful for individual brand.

Question 26

Explain Competitive advantage

Answer 26

Competitive advantage is a set of unique features of a company and its products that are perceived by customers as significant and superior to the competition.

Question 27

Different ways to gain a competitive advantage

Answer 27

-Product design
-Product Quality
-Promotion
-Customer Service
-Delivery Times
-Economies Of Scale
-Flexibility
-Ethical Stance
-Focusing on a particular market segment