Key terms Flashcards
Define market
Any place where buyers and sellers meet to exchange goods or services
Define competition
Refers to the number of businesses in a market
Define mass market
Where a business sells to the whole market and markets the product to all consumers in the same way
Define niche market
A small segment of a market that offers specialist products or services to a unique group of customers . It is the opposite of
mass marketing . May have less competition .
Define market segmentation
a process of subdividing a market into identifiable subgroups that have similar needs, wants or characteristics and providing them with goods or services that meet their needs and wants
Define monopoly
A single business dominates the market (it could be a pure monopoly with 100% market share or, most likely, a business with 25% or more market share, which could be regarded as a monopoly according to UK/EU competition authorities)
-high barriers to entry
-price makers
-high economies of scale
Define oligopoly
a few large businesses dominate the market in terms of sales revenue/market share as well as which there may be many small firms. they engage in non-price competition such as banding and advertising
-high barriers to entry
-price makes
-high economies of scale
Define monopolistic competition
Many relatively small businesses, no dominant business
-few barriers to entry
-similar products with some differentiation
- little control over prices but essentially might be price takers
Define perfect competition
A market in which many small firms produce virtually identical products at similar prices with the ability to enter and leave the market freely
-Low barriers to entry
-There are a large number of small businesses competing - no one business is large enough to influence the activities of others
Define consumer protection
Laws that prevent harm such as goods not being fit for purpose or not of merchantable quality.
Define demand
The quantity of goods/services that consumers are willing and able to buy at a given price, at a given time
Define supply
The quantity of goods/services that producers are willing and able to supply to the market at a given price, at a given time
Define price inelastic
between 0-1
-where a change in price results in a smaller % change in quantity demanded
Define price elastic
greater than 1
-where the quantity demanded rises or falls by a larger percentage than the price change
Define income elastic
-Income elasticity is greater than 1
-Where the quantity demanded falls by a larger percentage than the income change
Define income inelastic
Income elasticity is between 0 and 1
-where the quantity demanded rises or falls by a smaller percentage than the income change
Define inferior goods
A product that has negative income elasticity. As incomes decrease, demand increases and vice versa
Define normal goods
A product that has positive income elasticity. As incomes increase, demand increases and vice versa
Define Luxury goods
Goods for which demand increases significantly when incomes increase, and vice versa. Positive income elasticity that is greater than one
Define Market research
The process of gathering primary and secondary data on the buying habits, lifestyles, usage and attitudes of actual and potential customers
Define primary research include examples
gathers first-hand information that doesn’t already exist. It is directly relevant to the needs of the business, it is for a specific purpose. Examples include questionnaires, interviews, focus groups, consumer pannels and customer surveys
Define Secondary research
Involves the use of previously collected information gathered for a different purpose, that already exists. It can be internal or external and is adapted for its use. examples include government reports, official publications and analysis of sales figures
Define sampling
when researchers take a selection of the population who are representative of the whole population. For example random and quota sampling
Define quota sampling
