Markets

Question 1

What is a markt?

Answer 1

A place where buyers and sellers come together to exchange goods and services

Question 2

Mass market characteristics

Answer 2

• wide range target consumers
  -not segmented
  -widely available through a range of markets
  -mass meda = advertisment
  -large productivity- more economies of scale
  -lots of competition
  -high profit margins

Question 3

Niche market characteristics

Answer 3

-identify currently unstatisfied gaps in the market
-target consumers
-higher prices
-increased USP
-more consumer loyalty

Question 4

Niche market advantages

Answer 4

-less competition
-specialist skills/knowledge
-charge higher prices
-clear focus

Question 5

Drawbacks of niche markets

Answer 5

-lack of economies of scale
-risk of overdependence on a single product/market
-vulnerable to market changes

Question 6

Market size

Answer 6

Total value or vol of sales in the market
Calc = number of units sold x price

Question 7

Market share

Answer 7

The propotion of total market sales that a firm has
Calc = sales of one firm/total market sales x 100

Question 8

Brand definition

Answer 8

A product produced by one business using a specific name

Question 9

What are reasons branding may be used:

Answer 9

-Differentiate the product from those of rivals
-create customer loyalty
-help product recognition
-develop an image
-charge a premium price when the brand becomes strong

Question 10

Market share

Answer 10

The proportion or share that is held by a business or a product in a particular market
-sales of a business/ total sales in that particular market x 100%

Question 11

Key benefits of branding

Answer 11

• added value perspective to consumers
• brand loyalty from cos users (frequent purchasing)
• inelastic demand, ability to charge premium prices

Question 12

How can a business use brands to differentiate themselves?

Answer 12

• they old undergo various promotions
  -very expensive but the financial reward will be worth it
• only large corporations can do this creating barriers to entry for new business in the market
• promotions can create product differentiation

Question 13

How can branding influence price elasticity?

Answer 13

-through Added value that customers perceive with brands, making luxury goods inelastic and less responsive to demand.

Question 14

How can branding aid product development?

Answer 14

-this makes them already known, brand image already it, consumes more likely to try new products

Question 15

Example of markets

Answer 15

-consumer markets
-markets for services
-the housing market
-the commodity market - businesses, people buy raw material such as oil, wheat or coffee
-financial markets

Question 16

Define marketing

Answer 16

It is a process which involves anticipating,identifying and meeting customer needs and wants whilst making a profit.

Question 17

What are dynamic markets?

Answer 17

Markets which are constantly changing

Question 18

How can a market being dynamic impact a business?

Answer 18

-a failure to adapt can lead to a collapse in the business

Question 19

What is online retailing?

Answer 19

This is when businesses sale their goods and services online

Question 20

Benefits of online retailing?

Answer 20

-retailers ca market their goods based on convenience of consumers
-easier to get personal info from consumers, in order for targeting in the future
-selling costs for example staff wages, overheads, rent avoided
-marketing cost= cheaper
-online = wider reach to consumers
-open 24/7= more convenient

Question 21

Ways that the market change?

Answer 21

-the size of market
-the nature of market
-new markets

Question 22

Why does Innovation and market growth occur?

Answer 22

-economic growth
-innovation
-social changes
-changes in legislation
-demographic changes

Question 23

What is competition?

Answer 23

-this is the rivalry that exists between businesses in market

Question 24

How do businesses compete?

Answer 24

-lowering prices
-product differentiation
-offering better quality products
-powerful promotions
-offering ‘extras’ e.g high quality customer services

Question 25

How does the methods for businesses attract customers from competition useful?

Answer 25

All these methods cost money and generally reduce profit

• however businesses most do this to survive in the market

Question 26

How do consumers benefit from competition?

Answer 26

This increases their variety to purchase

Question 27

What happens to a business that doesn’t adapt?

Answer 27

-they will lose market share

Question 28

What might help a business adapt to market changes?

Answer 28

-flexibility - e.g the training of staff for various roles
-market research - help the business keep in touch with consumer needs
-investments -
-continuous improvements
-develop a niche

Question 29

What is risk?

Answer 29

The possibility that an event could occur

Question 30

What is uncertainty?

Answer 30

The unpredictable and uncontrolled d events that affect business decisions and actions