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business a level eduquas component 1 > markets > Flashcards

markets Flashcards

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1
Q

what is the definition of markets

A

A meeting place between buyers and sellers
where goods and services are exchanged, usually
for money

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2
Q

what is market share

A

Definition: This measures the sales of a business
relative to the market size

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3
Q

how is market share calculated

A

(number of products sold / number of products sold in market) x 100

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4
Q

what is the importance of having a high market share?

A
  • increase survival
  • increase growth
  • Increases businesses overall profitability.
  • economies of scale.
  • Can become the brand leader.
  • Edge over competitors.
  • Attract new shareholders.
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5
Q

what are global markets

A

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.

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6
Q

what are the advantages of global markets

A
  • increase profits
  • Spread risks
  • Economies of scale
  • Survival – some businesses need to be global
    to survive.
  • lack of competition
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7
Q

what is mass marketing

A

Mass marketing involves a business
aiming products at a whole market, rather than
particular parts of them, for example, tomato
ketchup, tea bags

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8
Q

what are seasonal markets

A

Many markets have large seasonable variations.
Classic examples are ice cream (during the presummer period), fireworks and diet plans (in
January).

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9
Q

what are the disadvantages of mass marketing

A
  • A business must be able to produce goods on
    a large scale, which is expensive to set up.
  • If demand should fall, the business will be left
    with unused resources.
  • Products need to be heavily differentiated
    from the competition, which can be very fierce, as
    Coca-Cola and Pepsi-Cola clearly show.
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10
Q

what is niche marketing

A

A niche market is a specialised market segment where you cater
for the demand for products/services that are not currently being supplied by
the main suppliers

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11
Q

what are the advantages of niche marketing

A
  • Businesses can charge higher prices/premium prices
  • can avoid competition
  • focus on the needs of its customers in these segments,
  • Promotion costs can be kept.
  • In a recession, niche markets may have characteristics which enable them
    to weather difficult trading conditions
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12
Q

what are the disadvantages of niche marketing

A
  • attract competition.
  • unable to sustain
    two or more competing businesses.
  • Cannot benefit from economies of scale.
  • Large businesses joining the market may benefit from economies of scale
  • Hard to expand.
  • Smaller market/limited profit.
  • Harder to raise finance
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13
Q

what is MARKET SEGMENTATION

A

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

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14
Q

what are the methods of segmentation

A

DEMOGRAPHIC
Gender
* Age
* Socioeconomic groups/social class
* GEOGRAPHICAL
* Regions of the country
PSYCHOGRAPHIC
* Personality and Lifestyle
* Culture - Religion/Ethnic
* Political voting preferences

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15
Q

what are the benefits to the firm of market segmentation

A
  • identify different customer groups’ specific needs and preferences,
  • improve customer satisfaction and loyalty.
  • allocate resources more effectively
  • gain a competitive edge by addressing the unique needs of these customers.
  • increased sales and potentially higher profit margins due to premium pricing
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15
Q

what are the benefits to the customer of market segmentation

A
  • 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.
15
Q

what are the three different types of markets

A

MONOPOLY
OLIGOPOLY
PERFECT COMPETITION

16
Q

what are the characteristics of a perfect competition

A
  • There are a large number of businesses
    competing
  • There are no market leaders and no price leaders
  • no branding, no product differentiation, no way of telling goods apart.
  • Businesses have equal access to technology
  • Consumers in a perfectly competitive market
    have full market information and options
  • there are no barriers to
    entry or exit.
16
Q

what are the characteristics of a monopoly

A
  • A single producer within a market – one
    business has 100% of the marketplace. This is
    known as a pure monopoly.
  • Likely to erect barriers to prevent others from
    entering their market.
  • Monopolists are called price makers as they
    have a significant influence on price.
  • UK and EU regard any business with over 25%
    of the market as having potential monopoly
    power
16
Q

what are the characteristics of an oligopoly

A
  • There are many businesses but only a few
    dominate the market.
  • Each business tends to have differentiated
    products with a strong brand identity.
  • Brand loyalty is encouraged by the use of advertising and promotion.
  • Prices can be stable for long periods, short
    price wars do occur.
  • Some barriers to entry do exist. For example,
    high start-up costs with manufacturing
17
Q

what is the definition of perfect competition

A

Definition: a market in which many small firms
produce virtually identical products at similar
prices.
- With the ability to enter and leave the market freely.
- They don’t earn excessive profits

18
Q

what is demand?

A

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

19
Q

what is supply?

A

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

20
Q

factors that cause the demand curve to shift

A

Population
Substitutes (price of)
Income – general level
Taste
Interest Rates
marketing

20
Q

factors that cause the supply curve to shift

A

Productivity
Number of Firms
Technology
Weather
Cost of Production

21
Q

what is the elasticity of demand

A

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

22
Q

what is the equilibrium price

A

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

23
Q

what is income elasticity

A

measures how sensitive demand is to a change in income.

24
Q

what are the three types of goods?

A
  • Normal goods – as real incomes increase,
    the demand for normal goods will also
    increase: positive income elasticity less than
    one. Examples are matches, lemonade,
    newspapers.
  • Luxury goods – 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.
  • Inferior goods – these are cheap substitutes
    of products people prefer to buy when their
    income is reduced (such as value line baked
    beans): negative income elasticity.

business a level eduquas component 1 (17 decks)

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