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Business GCSE REVISION > Section 5 > Flashcards

Section 5 Flashcards

1
Q

What are customer needs

A

-Good quality
-Good choice/range of products
-Good price

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2
Q

What is segmentation

A

The process of diving markets into groups based on different and distinct characteristics.

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3
Q

What are the main categories of market segmentation

A

-location
-age
-gender
-income (how much money the customer earns)

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4
Q

Benefits of effective market segmentation

A

-Better matching products to specific customer needs
-Efficiency increases as time and resources are specifically allocated to a group of customer
-increases sales and higher chance of success.

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5
Q

Disadvantages of market segmentation

A

-Segmentation os based on data and data may not always be right or reliable
-Just because a business identify’s a specific market segment it doesn’t mean it can successfully reach the customers in it.

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6
Q

What is primary research

A

Data collected first hand for a specific purpose.

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7
Q

What is secondary research

A

Data that already exists that has been collected for a different purpose.

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8
Q

Advantages of primary research

A

-kept private (not publicly available)
-Directly focused to the research objectives

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9
Q

Disadvantages of primary research

A

-Time consuming and costly to obtain
-May not be representative of the whole population.

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10
Q

Advantages of secondary research

A

-often free and easy to obtain
-Quick and easy access to use

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11
Q

Disadvantages of secondary research

A

-Can quickly become out of date
-not tailored to business needs

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12
Q

What are the methods of market research

A

-internet
-Survey
-Questionnaire
-focus group
-Printed press (newspapers)

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13
Q

What is quantitative data

A

Numerical data.The main methods of obtaining it are the various forms of survey:telephone,face to face and online.

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14
Q

What is qualititve data

A

Based on opinions,attitudes and beliefs.The main methods of obtaining it are through focus groups and interviews

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15
Q

Advantages of qualitative research

A

-Can highlight issues that need addressing e.g who customers don’t buy.
-Focuses on understanding customer needs and wants.

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16
Q

Disadvantages on qualitative data

A

-Always a risk when basing things on opinions is it may not be the correct representation for the whole population.

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17
Q

Advantages of quantitive research

A

-Data’s easy to analyse.
-Numerical data provides insight to relevant trends.
-can be compared to other sources e.g competitors.

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18
Q

Disadvantages of quantitative data

A

-focuses on data rather than explaining why something happened.
-Doesn’t explain the reasons behind numerical trends.
-May lack reliability if method isn’t valid

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19
Q

What’s the formula for market share

A

Business or product sales/total sales in the market x100

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20
Q

What’s marketing mix

A

How a business combines it’s product,price,uses promotion and the place of sale in order to be successful.

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21
Q

What are the elements of marketing mix

A

Product-the good or service the customer obtains
Price-How much the customer is paying for the product
Promotion-How the customer is found and persuaded to buy the product
Place-How the product is distributed to the customer.

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22
Q

How can consumer trends affect a business

A

Consumers will want other goods and services
For example -more health conscious products
-Online shopping as it’s quicker and easier.

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23
Q

What is place

A

Refers how a business get’s it’s products to the customers.

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24
Q

What is distribution

A

The make products at the right pace and right time in the right quantities.

25
Different methods of distribution
-retailers -Wholesalers -distributors/ sales agents
26
What's a distribution channel
Moves a product through the stages from production to final consumer
27
What is E commerce /M commerce
The sale of products online using a mobile device.
28
Advantages of E commerce / M commerce
-Can sell products 24/7. -Market can be expanded on a national and international basis. -Deliveries can be tracked.
29
Disadvantages of E commerce / M commerce
-No personal contact with customers -Increased costs of distribution to national and International locations (customers may be unhappy they have to pay themselves) -More competition online.
30
What are the main influences on pricing methods
-Nature of the market -costs -competition
31
Whats the Influence on price of cost
A business can't ignore the production costs when it comes to selling a product so the selling cost has to be higher than the production cost in order to make money.
32
Whats the influence on price because of the nature of the market
If there's high demand for a product,but shortage of supply then the business can increase the price however if a business targets a niche market (small) it won't be able to change the prices drastically as there's not a lot of competition.
33
Whats the influence on price because of the degree of comeptition
Competitor strength influences whether a business can set prices independently or whether it simply had to follow the normal market price.
34
Stages of the product life cycle
Stage 1- Research and development Stage 2 -Introduction Stage 3- Growth Stage 4-maturity Stage 5-Decline
35
How can price influence demand
If a business increases the price then it's likely to sell less as demand from customers will fall.
36
What are the types of pricing methods
-Price penetration -Price skimming -Cost-plus -Competitive pricing -Loss leader
37
What is price skimming
Setting a high price before other competitors come into the market.Often used for a new product which faces little to no comeptition
38
Advantages of price skimming
-Potential high profits can help cover for research and development costs -Brand will get a reputation for quality. -Profits can be invested into new products.
39
Disadvantages of price skimming
-Won't last long as competitors will soon launch rival products. -May slow down growth in sales as customers can't afford the price being charged.
40
What's price penetration
Setting low prices when a product is launched.Ofter used by new businesses to support new product launch.
41
Advantages of price penetration
-Builds customer usage and loyalty -Can help develop long term profitability by having higher market share.
42
Disadvantages of price penetration
-in the short term it's likely to lower profits because price is set low at the start. -May be difficult to raise selling price in the future.
43
Whats competitive pricing
When a business looks at the prices charged by competitors to indicate what price to charge.
44
Advantages of competitive pricing
-Prices will be the same as competitors so it should attract customers
45
Disadvantages of competitive pricing
-Other strategies should attract customers like better quality and good customer service. -The business will have to research what competitors are charging which could increase costs and waste time as they could be working on their own products.
46
Whats loss leaders
Where a price is set deliberately below the cost if production to attract customers on other products that are more profitable
47
Whats cost plus
Setting a price by adding a fixed amount to the cost of making or buying the product.
48
Advantages of cost plus
-A profit is guaranteed on each item sold. -Makes sure production costs are covered.
49
Disadvantages of cost plus
-if the mark up is set to high,the price may be expensive compared to rivals and therefore uncompetitive.
50
What's a brand
A brand can defined as a name,design ,symbol or feature that identifies one seller's goods or services.
51
What's the product life cycle
A theoretical model which describes the stages a product goes through over it's life.
52
What's a portfolio
-A business with a range of products is a portfolio.
53
What's promotion
Refers to the way a business communicates about it's products and itself through advertising,public,sponsorship and social media
54
What are Reasons for promotion
-to inform current and potential customers about existing and new products -To explain potential benefits of a product -to persuade customers to buy a product.
55
What's advertising
-Promotes a product to the target audience through different communication media such as TV,newspapers,billboards and magazines.
56
Advantages of advertising
-Wide coverage -Control of message -Effective for brand awareness.
57
Disadvantages of advertising
-Often expensive -One way communication -lacks flexibility.
58

Business GCSE REVISION (5 decks)

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