Marketing and People

Question 1

What is the definition of a market?

Answer 1

A market is where buyers and sellers come together to exchange goods or services.

Question 2

What is a mass market?

Answer 2

A market where products and/or services are aimed at all consumers, often using generalised products.

Question 3

What are the characteristics of a mass market?

Answer 3

The mass market tries to make products/services for all consumers. It is larger, and the types of products are more generalised.

Question 4

What is a niche market?

Answer 4

A market that targets a much smaller segment, focusing on specialised wants or needs.

Question 5

What are the characteristics of a niche market?

Answer 5

The niche market appeals to smaller segments with specific products and services.

Question 6

Give examples of mass and niche markets in the fast-food industry.

Answer 6

Mass market examples: McDonald’s, Burger King, Subway.

Niche market example: Leon (healthy fast food).

Question 7

What are the benefits of a mass market?

Answer 7

Larger customer base.
Economies of scale due to high output levels.
Strong market presence.

Question 8

What are the disadvantages of a mass market?

Answer 8

High competition levels.
Lower profit margins.

Question 9

What are the benefits of a niche market?

Answer 9

Less competition.
Specific market focus.
Higher profit margins.
Customer loyalty.

Question 10

What are the disadvantages of a niche market?

Answer 10

No economies of scale.
Vulnerability due to an undiverse product portfolio.

Question 11

What is a brand?

Answer 11

A brand is a good or service with unique and recognisable features, making it distinctive and memorable.

Question 12

What makes a strong brand?

Answer 12

Higher customer loyalty.
Customers consistently support and buy the brand.
Can create profitability on its own (e.g., Apple, Nike).

Question 13

What role do retailers play in branding?

Answer 13

Retailers stock well-known brands to boost profits and develop their own-label brands to compete, often pricing them cheaper than big brands.

Question 14

What are economies of scale?

Answer 14

Reductions in average costs per unit as production increases, often achieved in mass markets.

Question 15

What is customer loyalty?

Answer 15

When customers consistently choose a particular brand over others due to satisfaction or trust.

Question 16

What are own-label brands?

Answer 16

Products developed by retailers under their own name, often priced lower than big-name brands.

Question 17

How do strong brands create profitability?

Answer 17

By allowing premium pricing, encouraging repeat purchases, and differentiating products from competitors.

Question 18

What are dynamic markets?

Answer 18

Markets that constantly change due to trends, technology, and customer needs.

Question 19

What is the difference between consumer needs and wants?

Answer 19

Needs are essential for survival (e.g., food, water), while wants are desires that enhance quality of life (e.g., luxury cars).

Question 20

Give examples of mass and niche markets outside fast food.

Answer 20

Mass Market Example: Amazon or Coca-Cola.

Niche Market Example: Tesla’s early market (luxury EVs) or specialist vegan brands like Oatly.

Question 21

What is a dynamic market?

Answer 21

A market that experiences rapid and continuous change.

Question 22

Why is online retail considered a dynamic market?

Answer 22

Because it continuously changes and develops in terms of how customers purchase goods and services.

Example: Amazon and eBay were both founded in the 1990s and have transformed the online retail market.

Question 23

How do markets change?

Answer 23

Markets change due to advances in technology and changing tastes and preferences of customers.

Example: Smartphone and tablet markets are dynamic because of rapid technological advances, such as Apple adding Touch and Face ID in quick succession.

Question 24

What is innovation, and how does it affect dynamic markets?

Answer 24

Innovation involves introducing new and improved products and services to maintain or increase competitiveness.

Example: Dyson’s innovation led to new products in the technology market.

Question 25

How should businesses respond to changes in the external market?

Answer 25

Businesses must identify and respond to external market changes. ## Footnote Example: Blockbuster failed to adapt to the streaming and download market, losing its share to competitors like Netflix.

Question 26

What is the external environment in business?

Answer 26

The external environment refers to factors that may affect a business but are outside of the business's control, such as competition.

Question 27

What is competition in business?

Answer 27

Competition refers to the rivalry between businesses aiming to attract customers and achieve market share.

Question 28

What is the impact of competition on a business?

Answer 28

Competition can affect a business's costs and demand as competitors may reduce demand for a business's product or service. Competition can force businesses to reduce prices or increase sales and marketing spending.

Question 29

How can competition lead to rising costs for a business?

Answer 29

Businesses may need to spend more on promotion and advertising (e.g., TV ads or social media campaigns). Businesses may invest more in research and development to improve their products.

Question 30

What are the long-term impacts of competition on businesses?

Answer 30

Drives innovation and efficiency. Results in better value for customers. May force weaker competitors to exit the market or adopt cost-cutting measures.

Question 31

How can businesses differentiate themselves in competitive markets?

Answer 31

By offering unique products/services, improving customer service, or focusing on quality and branding.

Question 32

How does competition benefit customers?

Answer 32

Leads to lower prices. Encourages better quality products. Promotes more innovation in the market.

Question 33

What is an example of competition affecting a market?

Answer 33

From 2012, Tesco experienced falling demand due to competition from Aldi and Lidl in the food retail industry. ## Footnote Tesco responded by increasing promotional spending and developing a new range of food items (e.g., Stockwell & Co.), replacing its Tesco Value range.

Question 34

What is a business risk?

Answer 34

Business risk refers to the potential for loss or failure when starting or running a business.

Question 35

What are the key risks faced by entrepreneurs starting a business?

Answer 35

Risk of Failure: Starting a new company is risky as they are most likely to fail in the early days. Consumers may not buy their product, especially if it is brand new. Financial Loss: Starting a new business often requires a lot of investment. Failure can lead to significant financial losses for the entrepreneur. Lack of Security: Entrepreneurs often lose the security of a regular job or salary. If the business is unprofitable, they may have no money to live on.

Question 36

What is uncertainty in business?

Answer 36

Uncertainty occurs when a business cannot predict how a situation will turn out. This is usually due to insufficient information.

Question 37

What is the difference between risk and uncertainty?

Answer 37

Risk: A situation where the likelihood of something going wrong can be estimated. Uncertainty: A situation where the future is unpredictable, and it is difficult to anticipate what might happen.

Question 38

How has Brexit increased uncertainty for businesses?

Answer 38

Businesses are uncertain about how they will be affected by Britain leaving the EU. Lack of clarity on regulations, trade policies, and customer behaviour adds to the uncertainty.

Question 39

Why is uncertainty challenging for businesses?

Answer 39

It makes it hard to foresee problems or plan effectively. Without sufficient information, expectations about the future are unreliable.

Question 40

How can entrepreneurs mitigate risks and uncertainty?

Answer 40

Conduct market research to better understand customer demand. Create a financial safety net to manage losses. Continuously adapt business strategies to address changing market conditions.

Question 41

What is market research?

Answer 41

The process of collecting and processing information about the market a business operates in to make informed decisions.

Question 42

What are the key areas market research gathers information on?

Answer 42

Demand: Insights into customers' wants and needs help improve products and identify opportunities. Understanding demand trends aids in spotting growth and threats from new products or technologies. Competition: Helps businesses identify major threats and prepare strategies to deal with them. Example: H&M uses market research to address competition from online platforms like ASOS and Boohoo. Target Market: Provides insights into customers’ wants, needs, and how they are changing over time.

Question 43

What is the importance of understanding demand in market research?

Answer 43

It enables businesses to improve products, spot opportunities, and stay competitive. Demand trends highlight potential growth areas and risks.

Question 44

How does market research help with competition?

Answer 44

Identifies threats from competitors. Enables businesses to stay ahead by addressing weaknesses or gaps. Example: Fashion retailers monitor online platforms for competitive threats.

Question 45

What is the significance of researching the target market?

Answer 45

Helps businesses align their offerings with customers’ evolving preferences. Provides a competitive edge by understanding specific customer needs.

Question 46

What are the two main types of market research?

Answer 46

Qualitative Research: Focuses on opinions and views, often subjective. Example: Investigating customer opinions on Waitrose’s service. Quantitative Research: Gathers factual, measurable data. Example: Counting the number of Coca-Cola cans sold in the UK last year.

Question 47

How do qualitative and quantitative research complement each other?

Answer 47

Qualitative research explains the 'why' behind customer behaviour. Quantitative research provides hard data to support business decisions.

Question 48

What is sampling in market research?

Answer 48

Sampling is the process of selecting a portion of the population to gather data from, reducing the cost and effort of collecting data from the entire population.

Question 49

What are the advantages of sampling?

Answer 49

Reduces costs by focusing on a smaller, representative portion of the population. Saves time compared to surveying everyone in the target market. Allows businesses to gather actionable insights quickly.

Question 50

What are the disadvantages of sampling?

Answer 50

If the sample is not chosen properly, it may not accurately reflect the full target market. Sampling bias can lead to misleading results. Results may be limited to the views of the sampled group rather than the entire population.

Question 51

What is random sampling?

Answer 51

Every individual in the population has an equal chance of being selected. Advantage: Reduces bias. Disadvantage: May not represent specific subgroups within the population.

Question 52

What is stratified sampling?

Answer 52

The population is divided into subgroups (strata) based on characteristics like age, gender, or income, and samples are taken from each. Advantage: Ensures all subgroups are represented. Disadvantage: More complex and time-consuming.

Question 53

What is quota sampling?

Answer 53

Interviewers are given a quota of specific subgroups to include in the sample. Advantage: Ensures diversity in the sample. Disadvantage: May involve bias as selection is not random.

Question 54

What is systematic sampling?

Answer 54

Individuals are selected at regular intervals from an ordered list. Advantage: Easy to implement. Disadvantage: Can introduce bias if the list has an underlying pattern.

Question 55

What is convenience sampling?

Answer 55

Data is collected from individuals who are easy to access. Advantage: Quick and inexpensive. Disadvantage: Results are less reliable and may not represent the population.

Question 56

How can technology assist in market research?

Answer 56

Technology is used to analyse data by performing calculations and creating graphs and charts. Managers and leaders use these visual tools to interpret findings and make decisions.

Question 57

What are examples of how technology is used in market research?

Answer 57

Online surveys using platforms like Google Forms or SurveyMonkey. Data visualisation tools like Tableau or Excel for charts and trends. Social media analytics to track customer behaviour and preferences.

Question 58

What is market segmentation?

Answer 58

Market segmentation is the process of dividing potential customers into different groups based on characteristics like age, gender, income, and location to better meet their needs and wants.

Question 59

Why is market segmentation important?

Answer 59

It helps businesses choose the right market mix (product, pricing, promotion, and place). Allows for targeted promotion strategies that appeal to specific groups. Facilitates market mapping to identify gaps in the market by comparing competitors' offerings.

Question 60

What is market mapping?

Answer 60

Market mapping is the process of identifying a gap in the market by examining competitors and consumer needs.

Question 61

How does market segmentation influence the choice of market mix?

Answer 61

Businesses can tailor their products and services to specific customer needs. ## Footnote Example: Next provides clothing aimed at infants and toddlers using its Next Kids range.

Question 62

How does market segmentation influence promotion?

Answer 62

Helps businesses choose effective advertising channels for specific groups. ## Footnote Example: Advertising in a newspaper may not be effective for teenage girls, but a social media platform like TikTok might be.

Question 63

What are the main methods of market segmentation?

Answer 63

Customers can be segmented by: - Gender - Age - Location - Income

Question 64

How is gender used in market segmentation?

Answer 64

Some products are targeted at males or females. ## Footnote Example: Boohoo.com targets females with its online fashion range.

Question 65

How is age used in market segmentation?

Answer 65

Products are often aimed at specific age ranges. ## Footnote Example: A business is unlikely to advertise mobility scooters to people under 40.

Question 66

How is location used in market segmentation?

Answer 66

Customers’ preferences can change based on where they live or work. ## Footnote Example: Polish supermarkets in the UK focus on Polish food to appeal to Polish families living there.

Question 67

How is income used in market segmentation?

Answer 67

Products like luxury goods are targeted at customers with higher disposable income. ## Footnote Example: High-end kitchens (priced at £20,000) are more likely to be advertised in magazines like Ideal Home than in tabloids.

Question 68

What is market mapping?

Answer 68

Market mapping is a tool businesses use to visually position products or services in a market based on key variables, such as price and quality, to identify gaps or opportunities.

Question 69

What are the benefits of market mapping?

Answer 69

Helps identify gaps in the market where a business can introduce new products or services. Provides a clear understanding of competitors’ positioning. Assists in developing strategies to differentiate products from competitors. Highlights areas of high competition where businesses might struggle to succeed.

Question 70

What variables are commonly used in market mapping?

Answer 70

Price (e.g., low price vs high price). Quality (e.g., low quality vs high quality). Other variables, such as: - Functionality - Customer service - Brand reputation - Product features

Question 71

How is price vs quality used in market mapping?

Answer 71

Products are mapped in a grid with axes for price (low to high) and quality (low to high). ## Footnote Example: High price & high quality: Luxury cars like Lamborghini.

Question 72

What insights can businesses gain from market mapping?

Answer 72

Identifying unmet customer needs or preferences. Understanding how their product compares to competitors. Determining if there is overcrowding in certain areas of the market. Finding areas to innovate or reposition their product.

Question 73

What are the limitations of market mapping?

Answer 73

Subjectivity: The placement of products can depend on opinions rather than factual data. Simplification: Reduces complex market dynamics to just a few variables, which may oversimplify the analysis. Data accuracy: Requires up-to-date and reliable data to be effective.

Question 74

How can businesses use market mapping for strategic decisions?

Answer 74

Launch products in gaps identified on the map. Adjust pricing or improve quality to compete better. Focus marketing efforts on areas of less competition. Reassess brand positioning to meet consumer expectations.