Theme 1 1.1 Market Flashcards
Meeting Customers Objectives
What are three different business forms?
- Sole trader
- Partnership
- Limited company
These forms differ in terms of liability, taxation, and operational structure.
What is one advantage of operating as a sole trader?
Full control over the business operations
Sole traders have the autonomy to make decisions without needing to consult others.
What is one difficulty moving from entrepreneur to leader?
Adjusting to managing a larger team
Entrepreneurs often focus on their vision, whereas leaders must manage and motivate others.
Define mass market.
The market aimed at the general population, e.g., regular toothpaste
Mass markets target a broad audience with standardized products.
Define niche market.
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.
What does homogeneous mean?
Of the same kind; alike
Homogeneous products compete in a market with similar attributes.
List two characteristics of mass markets.
- Products sold to all consumers in the same way
- High volume of sales leads to high revenues
Mass markets often rely on broad marketing strategies.
What are two advantages of operating in a mass market?
- Economies of scale
- High revenues can be invested in research and development
These advantages stem from large-scale production and wide market reach.
What is a disadvantage of operating in a mass market?
High competition and the need for product differentiation
Companies must invest in marketing to stand out in a crowded market.
What is an example of a mass market product?
Coca-Cola
Coca-Cola targets a broad audience with a universally appealing product.
What are two disadvantages of operating in a niche market?
- Higher unit costs
- Very risky due to fluctuating demand
Niche markets often have limited customer bases and higher costs per unit.
What is one advantage of niche markets?
Ability to charge premium prices
Consumers in niche markets are often willing to pay more for specialized products.
Define dynamic market.
A market subject to rapid or continuous changes
Dynamic markets require businesses to adapt quickly to consumer preferences.
What are two advantages of online retailing?
- Shops are open 24/7
- Reach international markets easily
Online retailing eliminates traditional store hours and geographical limitations.
What is one disadvantage of online retailing?
Issues with online security may deter customers
Security concerns can impact consumer confidence in online shopping.
What is the definition of risk in business?
The possibility of lower than anticipated profits or losses
Business risks can arise from various factors including competition and market conditions.
What is the definition of uncertainty in business?
Inability to predict external shocks or future events
Uncertainty can lead to cautious spending and investment decisions.
Fill in the blank: A _______ market is one that is subject to rapid or continuous changes.
[dynamic]
True or False: Mass markets often rely on branding to instill customer loyalty.
True
Branding is crucial in mass markets due to product homogeneity.
What is a fixed cost in business?
A cost that stays the same each month, making it easier to budget and plan.
How can a business protect itself from uncertainty?
By taking out insurance against risk.
What is public liability insurance?
Insurance a DJ may have in case anything goes wrong with their equipment.
What are the pros and cons of selling online?
Pros: Wider reach, convenience. Cons: High competition, potential security issues.
What is the difference between a mass and niche market?
Mass market targets a large audience; niche market targets a specific segment.
What is one advantage of online retailing?
24/7 availability.
What is one disadvantage of online retailing?
Lack of personal interaction.
How might competition affect the market?
Can lead to lower prices and improved services.
What is the difference between risk and uncertainty?
Risk involves known probabilities; uncertainty involves unknown probabilities.
What are some risks associated with business?
Financial loss, legal issues, market changes.
Fill in the blank: A simple way to protect against risk is to take out _______.
insurance
What are the levels of marks for a sample question?
- Level 1: 1-2 marks
- Level 2: 3-4 marks
- Level 3: 5-6 marks
- Level 4: 7-10 marks
What is the PEACH structure used for?
To organize responses in essay writing.
What should you note on your answer after writing a response?
How much you managed to write in 10 minutes.
What should you assess in your peer’s plan during peer assessment?
- Sound definition relevant to the question
- Completion of all parts of PEACH
- Relevant judgment in their response
What grading scale should you use for self-assessment?
0 - no effort, 10 - most effort possible.
What is one task to complete before writing a response to the exam question?
Plan your answer using a provided planning sheet.
What is the time allocated for planning a response?
15 minutes.
What is the time allocated for writing a response to the 10 mark question?
20 minutes.
