The Market(1.1.1)

Question 1

What is a mass market?

Answer 1

sells the same products to the general population and markets them all in the same way
e.g. Coca-Cola

Question 2

What is a niche market?

Answer 2

small market segment- selling to a small customer group often with specific wants and needs
e.g. Rolex

Question 3

What is branding?

Answer 3

what differentiates one product from another
name logo, brand etc
e.g. Nike, Adidas

Question 4

What is a dynamic market?

Answer 4

a market that is subject to rapid or continuous change
e.g. trainers

Question 5

What is economies of scale?

Answer 5

as a business expands it can increase its scale of output this will likely generate efficiencies that lower their cost of production

Question 6

What is technical economies?

Answer 6

when growth allows a firm to buy specialised machinery and equipment that will most likely result in lower costs per units

Question 7

What is diseconomies of scale?

Answer 7

while a firm will continue to increase scale of output it will be eventual that average costs will start to increase

Question 8

What is market share?

Answer 8

describes the proportion of a particular market that is held by a business product or brand

Question 9

What is market size?

Answer 9

the number of potential customers that could buy from your business

Question 10

Two ways market size is estimated

Answer 10

value-total amount spent by customers
volume-sales or physical quantity of product sold

Question 11

Market share equation

Answer 11

sales of a business
——————————— x100
total sales in a market

Question 12

Niche market advantages

Answer 12

small customer base-easier to respond to demand
customer service
meeting needs
following trends
less competition-more control on market/industry-may see more products

Question 13

Niche market disadvantages

Answer 13

less demand-not as constant-less safe revenue-less cash flow
higher production cost-no economies of scale

Question 14

Mass market advantages

Answer 14

mass marketing-lots of customers-everyone is targeted-larger sale revenue-higher value of profit
high revenues-invest back into business
research and development

Question 15

Mass market disadvantages

Answer 15

lots of competition-more expenditure marketing-distinct from competition
high volume of production-mass production
more difficult to respond to demand-damage customer base

Question 16

What are the four area of dynamic markets?

Answer 16

online retailing
how markets change
innovation and market growth
adapting to change

Question 17

What is online retailing?

Answer 17

selling through the means of the internet
e.g. clothes through SHEIN

Question 18

Advantages of online retailing

Answer 18

accessible 24/7-convenient for customers-meets wants and needs
data collection-primary research market
price discounts online-more repeat customers-higher sales revenue
attracts more customers-more advertisement

Question 19

Disadvantages of online retailing

Answer 19

high cost to maintain and develop-security and protection
high competition-distinct website/app- very expensive
lack of customer service-less personal
return complicationa

Question 20

How the market changes factors

Answer 20

Political factors e.g. imports/exports
Economic factors e.g. interest rates
Social factors e.g. changing tastes and preferences
Technological factors e.g. apps
Legal factors e.g. e-cigg/vaping restrictions and regulations
Environmental factors e.g. electric/hybrid cars

Question 21

What is competition?

Answer 21

when two or more businesses enter the market and bring goods to sell

Question 22

What is direct competition?

Answer 22

sells the same product or service
e.g. Nike and Adidas

Question 23

What is indirect cometition?

Answer 23

competing for disposable income
e.g. cinemas, DVD shops, streaming services

Question 24

What can increased competition create?

Answer 24

The need to drive down costs e.g. more efficient process​
Develop innovative products and services e.g. focused R&D, ​
Push for excellent marketing which would supersede rivals e.g. creative, enticing advertising ​
High quality products and services e.g. sleek design, intended performance with updates ​

Question 25

What is innovation and market growth(change)

Answer 25

Competing firms continually try and develop new products that rivals do not offer ​
Once one innovation has been successful, other companies may be forced to try and adapt their products to combat rivals ​

Question 26

What is innovation?

Answer 26

the creation or update of products services or ideas

Question 27

What does innovation do?

Answer 27

can help business gain market share(product differentiation, greater customer experience or cost reduction)
but can also spur market growth in driving industries forward and overall customer adaption(demand)

Question 28

What is adapting to change?

Answer 28

market research
discovering subtle changes in what consumers are looking for in their products allows businesses to adapt and meet their needs

Question 29

Five ways businesses may adapt to market change

Answer 29

flexibility
market research
investment
develop a niche
continuous improvement in the increasing competitive environment

Question 30

What is risks?

Answer 30

factors that an organization encounters that may lower its profits or cause it to fail
can be managed using risk management(identifying and assessing threats)
e.g. cyber security threats, having procedures in place if machinery were to break down

Question 31

hat is uncertainty?

Answer 31

when outcomes are very difficult to predict or quantify
e.g. unexpected events as currency movements and economic downturns, reactions of rivals or consumers