markets

Question 1

what is a market

Answer 1

a meeting place between buyers and sellers where goods are exchanged, usually for money.

Question 2

what is market segmentation

Answer 2

Market segmentation is breaking down a market into sub-groups that share similar characteristics.

identifying and targeting of groups of people with similar needs and developing products or services for each of them.

Question 3

how are markets segmented

Answer 3

demographic

geographical

phsycographic

Question 4

demographic market segmentation

Answer 4

gender

age

Question 5

geographical market segmentation

Answer 5

regions of the country

Question 6

psychographic

Answer 6

culture

political voting reference

personality and emotionally behavior

Question 7

what is a niche market

Answer 7

: A niche market is a specialized market segment where you cater for the demand for products/services that are not currently being supplied by the main suppliers. It is essentially a narrowly defined market segment

Question 8

what is mass marketing

Answer 8

n:Mass marketing involves a business
aiming products at a whole market, rather than particular parts of them, for example, tomato ketchup, tea bags, ITV, Vauxhall Astra, washing
powder.

Question 9

what is global marketing

Answer 9

:Global marketing is all about selling goods or services to overseas markets. Different marketing strategies are implemented, based on the region or country the company is marketing to.

Question 10

what is a seasonal market

Answer 10

a market that changes with the season

e.g ice cream in summer

Question 11

how does market segmentation benefit the customer

Answer 11

receive a product that is closer to their expectations
can help them stick to their desired principles

can fit better with their budgets and lifestyle

can be superior to the competition

can make them feel that they are getting value for money

because marketing is targeted – the consumer is aware of new features of products.

Question 12

what are the benifits to a firm of market segmentation

Answer 12

gain greater knowledge

increase brand loyalty

higher profits

adjust to the consumer preference

identify requirements / match the needs of different groups more precisely

Question 13

what is meant by demand

Answer 13

the amount of a product that consumers are willing and able to purchase at any given price.

Question 14

what is meat by supply

Answer 14

the amount of a product that suppliers will offer to the market at a given price.

Question 15

what is meant by equilibrium price

Answer 15

n: In a free market, demand and supply equal the equilibrium price. This is the price where quantity demanded is equal to quantity supplied.

Question 16

what are he factors that cause the demand curve to shift

Answer 16

Population

Advertising

Substitutes (price of)

Income – general level

Fashion and Taste

Interest Rates

Complements (price of)

Question 17

what are the factors that cause the supply curve to shift

Answer 17

Productivity

Indirect Taxes

Number of Firms

Technology

Subsidies

Weather

Cost of Production

Question 18

what is price elasticity

Answer 18

measures the sensitivity of demand to a change in price. Price elasticity is always negative as the increase in price will lead to a fall in sales and, conversely, a reduction in price will lead to a rise in sales.

Question 19

what is a normal good

Answer 19

as real incomes increase, the demand for normal goods will also increase: positive income elasticity less than one

Question 20

what is meant by a luxury good

Answer 20

– the demand for luxury goods
will grow at a faster rate than the increase
in real income that created the change in
demand: positive income elasticity that is
greater than one. Examples are holidays
abroad, health club membership, sports cars.

Question 21

what is meant by a inferior good

Answer 21

these are cheap substitutes of products people prefer to buy when their income is reduced (such as value line baked beans): negative income elasticity

Question 22

what is meant by income elasticity

Answer 22

measures how sensitive demand is to change in income

Question 23

what is meant by elasticity of demand

Answer 23

The relationship between changes in demand, changes in price and income is known as the elasticity of demand.

Question 24

why do consumers need protection

Answer 24

Businesses understand how to manipulate customers’ behavior; they try to control price and competition in the market place and are in the position to produce goods and services that perhaps do not fully meet the expectations of the consumer.

Legislators (law makers) and consumer protection groups argue that without a strong legal framework, businesses will operate in a way that will maximise their profits with little consideration of the impact this will have on customers.

Legislation to protect consumers who enter into contracts with retailers or producers. A contract is made when goods or services are purchased.

Legislation with regard to competition policy. This is large scale policy designed to control the way that markets operate