Theme 1 1.1 Market

Question 1

What are three different business forms?

Answer 1

1. Sole trader
2. Partnership
3. Limited company

These forms differ in terms of liability, taxation, and operational structure.

Question 2

What is one advantage of operating as a sole trader?

Answer 2

Full control over the business operations

Sole traders have the autonomy to make decisions without needing to consult others.

Question 3

What is one difficulty moving from entrepreneur to leader?

Answer 3

Adjusting to managing a larger team

Entrepreneurs often focus on their vision, whereas leaders must manage and motivate others.

Question 4

Define mass market.

Answer 4

The market aimed at the general population, e.g., regular toothpaste

Mass markets target a broad audience with standardized products.

Question 5

Define niche market.

Answer 5

A subset of the main market addressing a specialist need, e.g., Sensodyne toothpaste for sensitive teeth

Niche markets cater to specific consumer preferences or needs.

Question 6

What does homogeneous mean?

Answer 6

Of the same kind; alike

Homogeneous products compete in a market with similar attributes.

Question 7

List two characteristics of mass markets.

Answer 7

1. Products sold to all consumers in the same way
2. High volume of sales leads to high revenues

Mass markets often rely on broad marketing strategies.

Question 8

What are two advantages of operating in a mass market?

Answer 8

1. Economies of scale
2. High revenues can be invested in research and development

These advantages stem from large-scale production and wide market reach.

Question 9

What is a disadvantage of operating in a mass market?

Answer 9

High competition and the need for product differentiation

Companies must invest in marketing to stand out in a crowded market.

Question 10

What is an example of a mass market product?

Answer 10

Coca-Cola

Coca-Cola targets a broad audience with a universally appealing product.

Question 11

What are two disadvantages of operating in a niche market?

Answer 11

1. Higher unit costs
2. Very risky due to fluctuating demand

Niche markets often have limited customer bases and higher costs per unit.

Question 12

What is one advantage of niche markets?

Answer 12

Ability to charge premium prices

Consumers in niche markets are often willing to pay more for specialized products.

Question 13

Define dynamic market.

Answer 13

A market subject to rapid or continuous changes

Dynamic markets require businesses to adapt quickly to consumer preferences.

Question 14

What are two advantages of online retailing?

Answer 14

1. Shops are open 24/7
2. Reach international markets easily

Online retailing eliminates traditional store hours and geographical limitations.

Question 15

What is one disadvantage of online retailing?

Answer 15

Issues with online security may deter customers

Security concerns can impact consumer confidence in online shopping.

Question 16

What is the definition of risk in business?

Answer 16

The possibility of lower than anticipated profits or losses

Business risks can arise from various factors including competition and market conditions.

Question 17

What is the definition of uncertainty in business?

Answer 17

Inability to predict external shocks or future events

Uncertainty can lead to cautious spending and investment decisions.

Question 18

Fill in the blank: A _______ market is one that is subject to rapid or continuous changes.

Answer 18

[dynamic]

Question 19

True or False: Mass markets often rely on branding to instill customer loyalty.

Answer 19

True

Branding is crucial in mass markets due to product homogeneity.

Question 20

What is a fixed cost in business?

Answer 20

A cost that stays the same each month, making it easier to budget and plan.

Question 21

How can a business protect itself from uncertainty?

Answer 21

By taking out insurance against risk.

Question 22

What is public liability insurance?

Answer 22

Insurance a DJ may have in case anything goes wrong with their equipment.

Question 23

What are the pros and cons of selling online?

Answer 23

Pros: Wider reach, convenience. Cons: High competition, potential security issues.

Question 24

What is the difference between a mass and niche market?

Answer 24

Mass market targets a large audience; niche market targets a specific segment.

Question 25

What is one advantage of online retailing?

Answer 25

24/7 availability.

Question 26

What is one disadvantage of online retailing?

Answer 26

Lack of personal interaction.

Question 27

How might competition affect the market?

Answer 27

Can lead to lower prices and improved services.

Question 28

What is the difference between risk and uncertainty?

Answer 28

Risk involves known probabilities; uncertainty involves unknown probabilities.

Question 29

What are some risks associated with business?

Answer 29

Financial loss, legal issues, market changes.

Question 30

Fill in the blank: A simple way to protect against risk is to take out _______.

Answer 30

insurance

Question 31

What are the levels of marks for a sample question?

Answer 31

• Level 1: 1-2 marks
• Level 2: 3-4 marks
• Level 3: 5-6 marks
• Level 4: 7-10 marks

Question 32

What is the PEACH structure used for?

Answer 32

To organize responses in essay writing.

Question 33

What should you note on your answer after writing a response?

Answer 33

How much you managed to write in 10 minutes.

Question 34

What should you assess in your peer’s plan during peer assessment?

Answer 34

• Sound definition relevant to the question
• Completion of all parts of PEACH
• Relevant judgment in their response

Question 35

What grading scale should you use for self-assessment?

Answer 35

0 - no effort, 10 - most effort possible.

Question 36

What is one task to complete before writing a response to the exam question?

Answer 36

Plan your answer using a provided planning sheet.

Question 37

What is the time allocated for planning a response?

Answer 37

15 minutes.

Question 38

What is the time allocated for writing a response to the 10 mark question?

Answer 38

20 minutes.