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Business > Cap Prep 1 > Flashcards

Cap Prep 1 Flashcards

1
Q

Mass market

A

market for goods produced on a large scale for a significant number of end consumers

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2
Q

market for goods produced on a large scale for a significant number of end consumers

A

Mass market

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3
Q

the process of appealing to an entire market rather than one targeted group

A

Mass marketing

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4
Q

Mass marketing

A

the process of appealing to an entire market rather than one targeted group

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5
Q

a segment of a larger market that can be defined by its own unique needs, preferences, or identity that makes it different from the market at large.

A

Niche market

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6
Q

Niche market

A

a segment of a larger market that can be defined by its own unique needs, preferences, or identity that makes it different from the market at large.

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7
Q

channeling all marketing efforts towards one well-defined segment of the population

A

Niche marketing

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8
Q

A market that is in a rapidly changing business environment

A

Dynamic market

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9
Q

Dynamic market

A

A market that is in a rapidly changing business environment

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10
Q

PESTLE

A

Political, Economic, Social, Technological, Legal and Environmental factors

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11
Q

Uncertainty

A

situations in which businesses face risks that can’t be foreseen or measured.

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12
Q

situations in which businesses face risks that can’t be foreseen or measured.

A

Uncertainty

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13
Q

Anything that threatens a company’s ability to achieve its financial goals

A

Risk

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14
Q

Risk

A

Anything that threatens a company’s ability to achieve its financial goals

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15
Q

an organized effort to gather information about target markets and customers

A

Market research

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16
Q

Market research

A

an organized effort to gather information about target markets and customers

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17
Q

A business focused on the quality of the product rather than the needs and wants of the target market

A

Product orientation

eg. Apple

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18
Q

Product orientation

A

A business focused on the quality of the product rather than the needs and wants of the target market

Eg. Apple

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19
Q

Market orientation

A

The focus on identifying consumer needs and desires in order to define new products to be developed

Eg. Coca Cola

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20
Q

The focus on identifying consumer needs and desires in order to define new products to be developed

A

Market orientated

Eg. Coca Cola

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21
Q

What is a market

A

Where buyers and sellers meet to exchange goods and services

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22
Q

Where buyers and sellers meet to exchange goods and services

A

A market

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23
Q

Market segment

A

A subsection of a larger market in which consumers share similar needs and wants

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24
Q

A subsection of a larger market in which consumers share similar needs and wants

A

Market segment

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25
Q

3 Benefits of mass marketing

A
  • huge potential number of customers
  • higher production levels allow low production costs
  • can use mass media advertising
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26
Q

Economy of sale

A

Saving in costs by an increased level of production

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27
Q

Saving in costs by an increased level of production

A

Economy of sale

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28
Q

3 benefits of niche marketing

A

-meeting customer needs more precisely allows for higher prices

-higher profit margins

-less competition > higher market share

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29
Q

Political change example

A

Brexit > importing and exporting changes

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30
Q

Economic change example

A

Recession 2008 > price conscious shoppers switched to Aldi and Lidl

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31
Q

Social change example

A

Increase desire for convenience > increase in online retail

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32
Q

Technological change example

A

Apps > turning old markets on their heads such as taxis to Uber

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33
Q

Legal change example

A

Growth in the market for vapes has been met with legislation as to who can buy them and how they’re advertised

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34
Q

Environmental change example

A

Car industry is facing major changes to minimise environmental damage

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35
Q

Market segmentation

A

Splitting up the market to target specific groups of customers who share similar wants and needs

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36
Q

the ability to influence consumer perception regarding a brand or product relative to competitors

A

Market positioning

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37
Q

Market positioning

A

the ability to influence consumer perception regarding a brand or product relative to competitors

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38
Q

2 main ways to gain a competitive advantage

A
  • Be lowest cost producer
  • find a sustainable point of differentiation
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39
Q

Competitive advantage

A

factors that allow a company to produce goods or services better or more cheaply than its rivals

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40
Q

factors that allow a company to produce goods or services better or more cheaply than its rivals

A

Competitive advantage

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41
Q

Product differentiation

A

Standing out from rivals can be achieved through actual, tangible differences between products or through manipulating consumer perceptions of your product

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42
Q

Standing out from rivals through actual, tangible differences between products or through manipulating consumer perceptions of your product

A

Product differentiation

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43
Q

4 Actual product differentiation examples

A
  • design
  • functions
  • taste
  • performance
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44
Q

Perceived product differentiation examples

A
  • branding
  • advertising
  • sponsorship
  • celebrity endorsement
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45
Q

Adding value

A

The difference between the cost of bought in goods and the selling price of the product

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46
Q

The difference between the cost of bought in goods and the selling price of the product

A

Adding value

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47
Q

2 ways of adding value

A
  • producing in a cheaper way
  • using promotional methods to alter consumers perceptions
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48
Q

Demand

A

The level of interest customers have in a product

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49
Q

The level of interest customers have in a product

A

Demand

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50
Q

Effective demand

A

When the interest is backed by the ability for consumers to buy it

Eg. Suitable pricing

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51
Q

When the interest is backed by the ability for consumers to buy it

Eg. Suitable pricing

A

Effective demand

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52
Q

Substitute

A

A similar, rival product that consumers may choose instead

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53
Q

A similar, rival product that consumers may choose instead

A

Substitute

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54
Q

Complement prouduct

A

A product whose use accompanied another product

Eg. Petrol to cars

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55
Q

A product whose use accompanied another product

Eg. Petrol to cars

A

Complement product

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56
Q

Inferior goods

A

those goods whose demand decreases with an increase in income

Eg. Store branded products

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57
Q

those goods whose demand decreases with an increase in income

A

Inferior groups

Eg. Store branded products

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58
Q

FAIDES

A

Fashion - Advetisting - Incomes - Demographics - External shock - Seqsonality

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59
Q

Supply

A

How much of a product a firm/business is willing to produce

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60
Q

How much of a product a firm/business is willing to produce

A

Supply

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61
Q

Changes in costs of production

A

If the cost of making a product changes the supply will change accordingly.
For example if the costs increase the supply will decrease and vice Verser

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62
Q

Indirect taxes

A

Taxes the government put on goods and services, for example VAT

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63
Q

Taxes the government put on goods and services, for example VAT

A

Indirect taxes

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64
Q

Government subsidies

A

When the government encourages the supply of a product (for example wind-powered energy) by giving money to the product we

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65
Q

External shocks

A

Unexpected events such as economic crises or natural disasters

Leads to less supply as there are higher costs for firms

66
Q

Unexpected events such as economic crises or natural disasters

A

External shock

67
Q

Commodity markets

A

Markets for undifferentiated products, Generally raw materials such as gold or oil

68
Q

Markets for undifferentiated products, Generally raw materials such as gold or oil

A

Commodity markets

69
Q

Equilibrium

A

Describes a situation in a market where supply and demand are balanced

70
Q

Describes a situation in a market where supply and demand are balanced

A

Equilibrium

71
Q

Prices elasticity of demand (def)

A

Measures the responsiveness of demand for a product to a change in its price

72
Q

Measures the responsiveness of demand for a product to a change in its price

A

Price elasticity of demand

73
Q

Price elasticity of demand (formula)

A

% change in demand
——————————
% change in price

74
Q

% change in demand
——————————
% change in price

A

Price elasticity of demand

75
Q

Price elastic product =

A

Negative number greater than 1

Changes in price have large effect on demand/ sales

76
Q

Price inelastic product =

A

Price elasticity is between 0 and -1

Changes in price have a small effect on demand/sales

77
Q

Price elasticity is between 0 and -1

Changes in price have a small effect on demand/sales

A

Price inelastic product

78
Q

Negative number greater than 1

Changes in price have large effect on demand/ sales

A

Price elastic product

79
Q

3 Factors influencing price elasticity

A
  • degree of product differentiation
  • availability of direct substitutes
  • branding and brand loyalty
80
Q

Direct substitutes

A

If an item can be easily replaced by another one

81
Q

If an item can be easily replaced by another one

A

Direct substitutes

82
Q

Indirect competitors

A

when two or more businesses offer different products or services but compete in the same market

Eg. Dominos and McDonald’s

83
Q

when two or more businesses offer different products or services but compete in the same market

A

Indirect competitors

84
Q

Why is price elasticity important?

A

Help in forecasting sales by considering likely impact of planned future price changes

Help decide on the best pricing strategy

85
Q

Income elasticity Of demand

A

Measures the responsiveness of demand for a product to a change in real income

86
Q

Measures the responsiveness of demand for a product to a change in real income

A

Income elasticity of demand

87
Q

Real income

A

Amount by which average incomes have adjusted for inflation

88
Q

Amount by which average incomes have adjusted for inflation

A

Real income

89
Q

Income elasticity of demand (formula)

A

% change in demand
——————————
% change in real incomes

90
Q

% change in demand
——————————
% change in real incomes

A

Income elasticity of demand

91
Q

Inferior goods YED

A

Negative income elasticity

92
Q

Negative income elasticity

A

Inferior goods

93
Q

Normal goods

A

Positive income elasticity between 0 and 1

94
Q

Positive income elasticity between 0 and 1

A

Normal goods

95
Q

Luxury goods

A

Positive income elasticity over 1

96
Q

Positive income elasticity over 1

A

Luxury goods

97
Q

Indulgences

A

Things we can easily live without but love to treat ourselves with when we can afford to

Eg. Takeaways

98
Q

Things we can easily live without but love to treat ourselves with when we can afford to

A

Indulgences

99
Q

Necessities

A

Basic items that we would expect to buy even when times are tight.

Eg. Pasta or milk

100
Q

Basic items that we would expect to buy even when times are tight.

A

Necessities

101
Q

Sales forecasting

A

a projection of future sales revenue and a prediction of which deals will move through the sales cycle

102
Q

a projection of future sales revenue and a prediction of which deals will move through the sales cycle

A

Sales forecasting

103
Q

Design mix

A

Aesthetics - function - cost

104
Q

Aesthetics - function - cost

A

Design mix

105
Q

4 Benefits of good design

A

-Can add value
-Provide point of differentiation
-improve brand image
-May boost brand loyalty

106
Q

Sustainability

A

making something using materials that will still be available in the future

107
Q

making something using materials that will still be available in the future

A

Sustainability

108
Q

Promotion

A

Describes methods used by a business to communicate information and persuade customers to purchase a product

109
Q

Describes methods used by a business to communicate information and persuade customers to purchase a product

A

Promotion

110
Q

3 benefits of branding

A

-Added value
-ability to charge premium price
-reduced PED

111
Q

3 Types of branding

A

-individual brand
-brand family
-corporate brand

112
Q

Brand

A

A recognisable name or symbol that helps differentiate a product or business

113
Q

A recognisable name or symbol that helps differentiate a product or business

A

Brand

114
Q

Individual brand

A

Single product brands such as marmite

115
Q

Single product brands such as marmite

A

Individual brand

116
Q

Brand family

A

A brand name that’s used across a range of related products for example Cadbury.

Benefit of this is using the umbrella name to encourage sales of other products through association

117
Q

A brand name that’s used across a range of related products for example Cadbury.

A

Brand family

118
Q

Corporate brand

A

Using the company name as a brand like Nestlé does. It can convince customers that all products across the entire range share benefits.

119
Q

Using the company name as a brand like Nestlé does. I

A

Corporate brand

120
Q

4 ways to build a brand

A

-advertising
-sponsorship
-digital media
-USP

121
Q

Unique Selling Point (USP)

A

A particular feature of a product or service that no rival provides

122
Q

A particular feature of a product or service that no rival provides

A

Unique selling point (USP)

123
Q

2 pricing strategies for new products

A

-Price skimming
-Penetration

124
Q

Penetration

A

Involves launching a new product at a very low price to entice customers to buy it

125
Q

Involves launching a new product at a very low price to entice customers to buy it

A

Penetration

126
Q

Price skimming

A

Involved launching a brand new product at a high price while the product is unique

127
Q

Involved launching a brand new product at a high price while the product is unique

A

Price skimming

128
Q

4 pricing strategies for existing product

A

-cost plus
-predatory
-competitive
-psychological

129
Q

Cost plus

A

Involves deciding price by adding a desired percentage into total costs per unit

130
Q

Involves deciding price by adding a desired percentage into total costs per unit

A

Cost plus

131
Q

Predatory

A

Sets prices low enough to force a competitor out of business

132
Q

Sets prices low enough to force a competitor out of business

A

Predatory

133
Q

Competitive

A

Charging a price at the market average or at a discount to the average price on the market

134
Q

Charging a price at the market average or at a discount to the average price on the market

A

Competitive

135
Q

Psychological

A

Prices set just below major psychological levels such as £9.99 instead of £10 to make the product seem cheaper

136
Q

Prices set just below major psychological levels such as £9.99 instead of £10 to make the product seem cheaper

A

Psychological

137
Q

6 Factors affecting pricing strategy

A
  • Level of product differentiation
    -PED
    -Level of competition
  • Strength of brand
  • stage in product life cycle
  • costs and need to make a profit
138
Q

Distribution channels

A

The route a product takes from producer to consumer is called the distribution channel

139
Q

The route a product takes from producer to consumer

A

Distribution channel

140
Q

Intermediaries

A

Businesses between the producer and the consumer in a channel. Such as a retailer

141
Q

Businesses between the producer and the consumer in a channel. Such as a retailer

A

Intermediaries

142
Q

Product life cycle (def)

A

The product life cycle is a pattern of sales over time that most products tend to follow

143
Q

a pattern of sales over time that most products tend to follow

A

Product life cycle

144
Q

Product life cycle phases

A

(R&D)
Introduction
Growth
Maturity
Decline

145
Q

Extension strategies

A

A medium to long term plan for extending the life cycle of a product

146
Q

A medium to long term plan for extending the life cycle of a product

A

Extension strategy

147
Q

3 product extension strategies

A

-Adding extra functions
-changing ingredients/materials
-launching slightly different variations

148
Q

3 promotional extension strategies

A
  • targeting a different market segment
  • finding new uses for product
    -Increasing use of the product among existing customers
149
Q

Product portfolio

A

The range of products a business has on offer.

150
Q

The range of products a business has on offer.

A

Product portfolio

151
Q

Building

A

Trying to boost sales of a ?

152
Q

Trying to boost sales of a ?

A

Building

153
Q

Holding

A

Spending money to maintain market share of ⭐️

154
Q

Spending money to maintain market share of ⭐️

A

Holding

155
Q

Milking

A

Taking profits generated by a product without spending heavily 🐄

156
Q

Taking profits generated by a product without spending heavily 🐄

A

Milking

157
Q

Divesting

A

Getting rid of products (usually 🐕)

158
Q

Getting rid of products (usually 🐕)

A

Divesting

159
Q

B2B

A

where one business makes a commercial transaction with another

160
Q

where one business makes a commercial transaction with another.

A

B2B

161
Q

B2C

A

business model of selling products directly to customers and thereby bypassing any third-party retailers, wholesalers, or any other middlemen

162
Q

business model of selling products directly to customers and thereby bypassing any third-party retailers, wholesalers, or any other middlemen

A

B2C

Business (7 decks)

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