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AS Level Business Studies > Chapter 3 > Flashcards

Chapter 3 Flashcards

1
Q

Give 2 marketing objectives and the value of setting marketing objectives

A

Market share; brand loyalty

Marketing objectives can provide focus and direction for the marketing department; motivate employees within the marketing function and also allow marketing progress to be reviewed

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2
Q

Formula for market growth

A

(Market size in year – market size in
previous year) / Market size in previous year x 100

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3
Q

Formula for sales growth

A

(Sales in previous year - sales in year) / sales in previous year x 100

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4
Q

Formula for market share

A

(Businesses sales / total market sales) x 100

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5
Q

Formula for market size

A

Value = number of units sold in the market x selling price per unit

Volume = number of units sold in the market

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6
Q

What is the difference between primary and secondary market research

A

Primary research is research that is gathered first hand by the business and is specific to the needs of the business

Secondary research is already available and has been collected for a different purpose

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7
Q

The difference between Qualitative and quantitative market research

A

Qualitiative is concerned with collecting data on attitudes, opinions, beliefs and intentions, whereas quantitative research is concerned more with data than can be quantitified and numerically analysed, such as statistical data

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8
Q

2 benefits for primary research

A

Up to date

Only available to the business who gathered the information and is therefore specific to the needs of the business

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9
Q

2 benefits for secondary research

A

Cheap and often easy to obtain

Can provide information on wider market trends

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10
Q

2 drawbacks of primary research

A

Can be expensive to gather

Time consuming

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11
Q

2 drawbacks for secondary research

A

Not specific to the needs of the business

Data often out of date and may not be reliable

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12
Q

What is the value of sampling when carrying out market research

A

Sampling is of value as it can save money as only a sample of the total population is selected. It also means that market research results can be obtained more quickly

However, by using a sample, there is less chance that the results reflect the total population. It also depends on the sample size and method chosen

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13
Q

What is random sampling

A

Random sampling gives every member of the target group/population an equal chance of being selected for the sample (e.g. by assigning a number to each member, and then selecting from the pool at using a random number generator)

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14
Q

What is stratified sampling

A

Stratified sampling is a sampling technique where the researcher divides or ‘stratifies’ the target group into sections, each representing a key group (or characteristic) that should be present in the final sample

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15
Q

what is quota sampling

A

The aim is to obtain a sample that is “representative” of the overall population

The population is divided (“stratified”) by the most important variables such as income, age and location. The required quota sample is then drawn from each stratum

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16
Q

What is positive correlation

A

A positive correlation occurs when one variable increases in value, the
value of the other variable also increases e.g. a rise in income levels, usually increases demand

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17
Q

What is negative correlation

A

A negative correlation occurs when the value of one variable increases and the value of the other variable decreases e.g. in most cases a price increase usually results in a fall in the quantity demanded

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18
Q

what is 95% confidence interval

A

95% confidence interval shows that the forecasters are 95%
confident that their results will fall within a specific range i.e. their
forecast will be right 19 times out of 20

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19
Q

what is 25% confidence interval

A

25% confidence interval shows that the forecasters are 95%
confident that their results will fall within a specific range i.e. their
forecast will be right 5 times out of 20

20
Q

What is extrapolation

A

Uses previous patterns of numerical data to establish a trend which
can then be projected into the future

21
Q

What are 3 factors that influence price elasticity of demand

A
  • Availability of substitutes
  • Time period
  • Brand loyalty
22
Q

What are 3 factors of Income elasticity of demand

A
  • Type of product
  • The state of the economy
  • Legislation linked to wage rates/ extent to which incomes will rise or fall
23
Q

What happens to the demand and revenue if PED is -2 and price increases by 5%

A

Demand will decrease
Revenue will decrease

24
Q

What happens to the demand and revenue if PED is -0.2 and price increases by 10%

A

Demand will decrease
Revenue will increase

25
Q

What happens to the demand and revenue if YED is +0.6 and price increases by 8%

A

Demand will increase
Revenue will increase

26
Q

What happens to the demand and revenue if YED is -1.2 and price increases by 4%

A

Demand will decrease
Revenue will decrease

27
Q

Should a business with a product that has a price elasticity of demand of -0.8 should
increase or decrease the price of the product

A

The business should increase the price, as the % change in quantity demanded will be lower than the % change in price. For example, a 5% price increase will only lead to a 4% decrease in the quantity demanded

28
Q

Should a business with a product that has a price elasticity of demand of -4 should
increase or decrease the price of the product

A

The business should reduce the price as the % change in quantity demanded will be greater than the % change in price. For example, a 5% price decrease will lead to a 20% increase in the quantity demanded

29
Q

Tell me the use of data in marketing decision making and planning

A

Data is useful in marketing decision making and planning as it can allow businesses to make more accurate marketing decisions and have a greater understanding of buyer behavior

30
Q

give 3 ways of segmenting a market

A
  • Demographic
  • Geographic
  • Income
31
Q

Give 3 Influences on choosing a target market and positioning

A
  • Amount of demand/level of competition
  • The ability and capability to produce products and services that meet the needs of the market
  • Potential profit
32
Q

3 examples of a niche market

A
  • Vegan products
  • Shoes for toddlers
  • Record players
33
Q

3 examples of a mass market

A
  • Soft drinks
  • Washing powder
  • Soap
34
Q

3 Consequences of targeting a niche market rather than a mass market

A
  • Easier to charge higher prices
  • Reduced opportunities for economies of scale
  • Greater brand loyalty
35
Q

What is the value of market segmentation

A

Allows products and services to meet the needs of specific target markets

Can be costly to produce a range of products that meet the needs of different market segments

36
Q

What is the value of targeting

A

Targeting provides more focus in relation to marketing activities and therefore reduces the opportunity cost of marketing

It can be more expensive and may result in certain customers being missed or neglected

37
Q

What is the value of positioning

A

Positioning can allow a business to gain a competitive advantage as it can create brand awarness and lead to differentiation

Maintaining positioning can be costly

38
Q

2 benefits of market mapping

A
  • Shows the competition that exists within a market
  • Gaps in the market can be identified
39
Q

2 drawbacks of market mapping

A
  • Can be biased and subjective
  • Only based on two variables
40
Q

7 elements of marketing mix

A
  • Product
  • Price
  • Promotion
  • Place
  • People
  • Process
  • Physical environment
41
Q

Difference between goods and services

A

A good is something physical which can be touched, such as a car, whereas a service is something that is non-physical and cannot be seen or touched

42
Q

Difference between industrial goods and consumer goods

A

An industrial good is something that is used for industrial or commercial reasons, such as machinery, whereas a consumer good is something that is used by a consumer, such as shampoo

43
Q

2 influences on marketing mix

A
  • The marketing budget
  • The product that the business sells
44
Q

2 influences on new product development

A
  • The budget for research, development and innovation
  • The industry that the business operates in
45
Q
A

AS Level Business Studies (4 decks)

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