Theme 1 - 1.1

Question 1

What are the types of markets?

Answer 1

Mass and Niche markets

Question 2

What is a mass market?

Answer 2

A Mass market is a market that targets a large population of the market with generic products.

Question 3

What are the features of a Mass market?

Answer 3

Requires production on a large scale and investment in capacity.
Potential for high sales revenue.
Competes with may other competitors.
Promotions are mass market types like TV and Newspapers.
The price will most likely be competitive to compete in the market.

Question 4

What is a Niche market?

Answer 4

A Niche market is a market that target a small population in the market with a specialised product.

Question 5

What are the features of a Niche market?

Answer 5

Productions on a small scale.
Low volume but high profit margin.
Few competitors but limited number of potential consumers.
Direct marketing and promotion through specialised mediums.
Business compete on quality and customisation in order to succeed.

Question 6

What is marketing?

Answer 6

Marketing has multiple activities to support their process of communication with customers for there goal of selling products that meet their customer needs.

Question 7

What is risk and uncertainty?

Answer 7

Risks exists because entrepreneurs put up resources like money that could be lost.
Uncertainty exists because business operate in changing environments and changing external factors like legal, social and economic factors.

Question 8

What is market share?

Answer 8

Market share is a portion of the market that is held by a business.

Question 9

What is market size?

Answer 9

Market size is the value and volume of the business. It is also measure by the value (total amount consumers spend on the product).

Question 10

How do business adapt in a dynamic market?

Answer 10

1. Be flexible in the way they operate.
2. Market research to better understanding of their consumers.
3. Invest in new technology, people and products.
4. Continues improvement.

Question 11

What is a dynamic market?

Answer 11

A dynamic market is a market that constantly fluctuate.

Question 12

Factors of a low competitive market for a business.

Answer 12

Can dominate the market
Can afford inefficiencies
Set high prices
Little incentives to increase

Question 13

Factors of a low competitive market for consumers.

Answer 13

Limited choices
High prices
Poor services

Question 14

Factors of a high competitive market for business.

Answer 14

Incentives to innovate and get better
Competitive prices
Focus to improve effeciencies

Question 15

Factors of a high competitive market for consumers.

Answer 15

Lots of choices
Good value for money
Exciting new product development

Question 16

What is market research?

Answer 16

Market research is the first process of marketing and involves gathering and analysing qualitative and quantitative market data.

Question 17

What is primary research?

Answer 17

Primary research is data collected by the business itself. Examples are questionnaires, consumer panels, interviews and focus groups.

Question 18

What are the advantages of primary research?

Answer 18

Specific for the business
Up to date and reliable
Better for qualitative
Better for two way communication and follow up questions.

Question 19

What are the disadvantages of primary research?

Answer 19

Time consuming and more costly
Difficult to conduct a large sample size

Question 20

What is secondary research?

Answer 20

Secondary research is data that already exists that is conducted by different business or organisations. Examples are market research reports, websites, articles, newspapers, government statistics.

Question 21

What are the advantages of secondary research?

Answer 21

Easily accessible
Fast and less time consuming
Better for quantitative

Question 22

What are the disadvantages of secondary research?

Answer 22

Can be bias
Some data can be free but detailed reports can be expensive
Not always up to date or specifically tailored to the business.

Question 23

What is product orientation?

Answer 23

Product orientation is when the business focuses everything around the product.

Question 24

What is market orientation?

Answer 24

Market orientation is when is focuses on consumer needs, and understands the consumer needs that make the product based on that.

Question 25

What is the libation of market research?

Answer 25

May be bias
Small sample limits the reliability of the research
Collecting data can be time consuming
Causality can be hard to identify

Question 26

Why do business use market research?

Answer 26

Product development
Budgeting
Production forecast
Workforce forecast
Developing market activities

Question 27

What is sampling?

Answer 27

Sampling is involving a representative group of people from the target population.

Quicker and easier
Bigger the sample size the more representative

Question 28

What does market segmentation allow a business to do?

Answer 28

Develop and build its brand
Focus the business activities
Build loyalty towards the brand and products
Differentiate form competitors
Reach consumers with relevant marketing activities such as advertising
Identity and satisfy the needs of a specific group of consumers

Question 29

Correlation

Answer 29

Correlation helps a business understand the relationship between 2 factors.

Question 30

How does ICT link to market research?

Answer 30

ICT can support the collection and analysis of market research in multiple ways.
- collecting data through websites
- social media/networking
- analysing information in databases

Question 31

What is market mapping?

Answer 31

Market mapping is a technique used to understand how products /businesses viewed relative to competitors.

Question 32

What are the benefits of market mapping?

Answer 32

Helps to decide whether to set up in a market
Useful for comparing similarities and differences between business
Business gains a better understanding of its competitors
Understand the consumers views

Question 33

What are the factors a business may consider when it comes to market positioning?

Answer 33

1. Classification of the product or business e.g 5 star hotel
2. Origin of the product/business e.g heritage
3. Attributes of the product e.g features and quality

Question 34

What are the limitation to market maps?

Answer 34

Market maps are based on positioning agains 2 variables.
The perception of other stakeholders are very complex and may not fit into this model.

Question 35

What is a competitive advantage?

Answer 35

A competitive advantage is when a business creates value for its consumers that costs greater for supplying the benefits.

Question 36

What are the three aspects of competitive advantages?

Answer 36

1. Innovation - ability for the business to create new and unique process and products.
2. Reputation - brand values
3. Architecture

Question 37

What is differentiation?

Answer 37

Differentiation is the process of making a product different from competitors products. But it can also be applied to a business brand.

Question 38

How can differentiation be applied to a business?

Answer 38

1. Developing a unique brand characteristics
2. Develop unique product features
3. Providing a better/unique customer experience
4. Building good relationship with customers
5. Offering a price that undercuts the competitors

Question 39

What are the different ways to add value?

Answer 39

Good customer service
Packaging
Customisation
Better design/features
Frequent buyer offers
Speed of service and response time to customers
Branding