External Influences - Market Characteristics

Question 1

Define market size

Answer 1

Market size is expressed as the collective value of the goods/services that consumers purchase

Question 2

Define market growth

Answer 2

Market growth is the percentage increase in the size of the market over a specific time period

Question 3

Define market share

Answer 3

Makes share is the total sales that a business has in a specific market

Question 4

Name 3 ways a business can increase market share

Answer 4

1. Be aware of consumer needs and meet them
2. Merge with a competitor
3. Use a variety of marketing techniques

Question 5

What happens to the power of the market as the barriers to entry increase

Answer 5

As the barriers of entry increase, the power of the market increases

Question 6

Define barriers to entry

Answer 6

Barriers to entry are the factors that could prevent a business from entering and competing in a market

Question 7

What are the 5 barriers to entry

Answer 7

1. Large start up costs
2. Hard to gain EOS
3. Threat of price war with existing company
4. Having the marketing budget to break customer loyalties
5. Legal restrictions such as patents

Question 8

Define barriers to exit

Answer 8

Barriers to exit are the factors that could prevent a firm from leaving a market even if they wanted to

Question 9

What are the 3 barriers to exit

Answer 9

1. The ability to pay off capital
2. High redundancy costs
3. Need to pay off contracts with suppliers