The Market

Question 1

what is a market?

Answer 1

any place where buyers and sellers can meet

Question 2

what is the aim of marketing?

Answer 2

to help identify, anticipate and satisfy consumer needs and wants profitable

Question 3

what are needs considered as?

Answer 3

essential (e.g shelter and food)

Question 4

at are wants considered as?

Answer 4

non-essentials (e.g nike trainers)

Question 5

why is market research essential?

Answer 5

helps the business to identify products and services they can develop in response to the needs and wants that their customers have

Question 6

what is market research the process of?

Answer 6

systematically gathering data from consumers which can be used to influence business decision

Question 7

what is a mass market?

Answer 7

products aimed at board market segments

Question 8

what is an example of a mass market?

Answer 8

Kellogg’s corn flakes

Question 9

what is a market segment?

Answer 9

groups of consumers who share similar characteristics e.g age, lifestyle, gender

Question 10

when does mass marketing occur?

Answer 10

when businesses sell their products to most of the available market meaning production happens on a large scale

Question 11

what is a niche market?

Answer 11

products are aimed at a subset of the larger market

Question 11

what is an example of a niche market?

Answer 11

gluten free products

Question 12

when does niche marketing occur?

Answer 12

when businesses identify and satisfy the demands of a small group of consumers within the wider market meaning production happens on a smaller scale

Question 13

why are products less unique in a mass market?

Answer 13

because they are aimed at a broad market segment

Question 14

why are there low average costs in a mass market?

Answer 14

due to the large scale of production (economies of scale)

Question 15

what does low prices in a mass market lead to?

Answer 15

greater affordability and higher sales volumes

Question 16

what do lower prices lead to in a mass market?

Answer 16

lower profit margins

Question 17

why are products more specialised and unique in a niche market?

Answer 17

because they are aimed at narrow market segments

Question 18

why is there a higher average cost in a niche market?

Answer 18

due to small scale production (they don’t benefit from economies of scale)

Question 19

what does higher price lead to in a niche market?

Answer 19

make products less affordable and lead to lower sales volumes

Question 20

what can high prices allow a niche market to achieve?

Answer 20

higher profit margin

Question 21

how can the size of a market be measured?

Answer 21

through sales volume or sales value

Question 22

what is sales volume?

Answer 22

the number of products sold i.e physical number of units sold

Question 23

how do you calculate the sales revenue?

Answer 23

price x quantity sold i.e financial value of the units sold

Question 24

what market share does a business enjoy?

Answer 24

the promotion of the total sales of a product/ service compared to the market as a whole E.g Tesco has 26% of the UK grocery market

Question 25

how do you calculate the market share?

Answer 25

(sales of a business / total sales in the market) x 100

Question 26

what is a brand?

Answer 26

a name, image or logo which helps one product/service stand out from its competitors

Question 27

what is product differentiation?

Answer 27

the process of distinguishing a product/service from competitors products in the market

Question 28

what do brands do?

Answer 28

add value, often making the product/service more desirable

Question 29

what does adding value mean?

Answer 29

firms increase the price that the consumer is willing to pay

Question 30

what do businesses operating in the mass market use brands for?

Answer 30

to stand out from competitions

Question 31

what do businesses in the niche market use brands for?

Answer 31

to communicate their offering to a small, well defined group of consumers

Question 32

what are strong brands more likely to b able to do?

Answer 32

charge higher prices then the weaker brands

Question 33

what is a dynamic market?

Answer 33

a market that is subject to rapid or continuous changes

Question 34

what happens to a business if they do not adapt to change in the market?

Answer 34

less likely to survive in the long run

Question 35

what is an example of a dynamic market?

Answer 35

the mobile phone

Question 36

what is monopoly power?

Answer 36

a large business that dominates a market

Question 37

what are the four areas to consider when examining the dynamic market?

Answer 37

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

Question 38

what are the advantages of online retailing?

Answer 38

provides business access to more consumers. enables longer trading hours (24/7). cheaper to run as it lowers fixed and variable costs. businesses can collect data by tracking consumer behaviour.

Question 39

what are the disadvantages of online retailing?

Answer 39

there may be high costs for website development, maintenance, and promotion. high levels of competition. there is a lack of personal contact with the customers. opens up chance for credit card fraud

Question 40

what changes cause a market to be dynamic?

Answer 40

changing consumer tastes, changing demographics, the amount of competition, changing legislation

Question 41

what is an example of changing consumer tastes?

Answer 41

consumers wanting electrical vehicles instead of petrol/diesel

Question 42

what is an example of changing demographics?

Answer 42

many developed countries have increasingly older population who have different needs and wants

Question 43

what does product innovation involve?

Answer 43

the adaptation or improvement of existing products

Question 44

what is process innovation?

Answer 44

the adaptation or improvement of existing processes e.g just in time stock control

Question 45

what is market growth?

Answer 45

a measure of the change in the entire market, expressed as a percentage of the original size

Question 46

what are some strategies to adapt to change?

Answer 46

create flexible business structures, meet customer needs, invest, innovate

Question 47

how can you meet customer needs?

Answer 47

carrying out market research and communication with customers

Question 48

what are the two types of competition?

Answer 48

direct and indirect

Question 49

what is direct cometition?

Answer 49

occurs when the business is targeting customers with the same products as a competitor

Question 49

what is indirect competition?

Answer 49

occurs when firms sell different products but compete with each other for the customers disposable income

Question 49

what is an examples of indirect competition?

Answer 49

cinemas and theatres

Question 49

what is disposable income?

Answer 49

money that households have left from their salary/wages after they have paid their taxes

Question 50

what does the absence of competition reduce?

Answer 50

incentives for businesses to innovate, be efficient or offer consumers lower prices

Question 50

what are the benefits of competition between businesses for customers?

Answer 50

businesses offer lower prices, produce better quality products, and provide better customer service

Question 50

what is the difference between uncertainty and risk?

Answer 50

risk can be calculated and prepared for uncertainties cannot as they are unexpected events

Question 51

what is risk?

Answer 51

the potential threat to business success

Question 52

what is risk management?

Answer 52

the process of identifying, assessing and preparing for potential to potential threat to businesses

Question 53

what is uncertainty?

Answer 53

when outcomes are difficult to predict

Question 54

what are some examples of risk?

Answer 54

technical failures, cyber security threats, loss of key staff, currency fluctuations

Question 55

what are some examples of uncertianty?

Answer 55

will the economy go into recession? will energy prices increase? what will happen to interest rates?