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Business > Theme 1 > Flashcards

Theme 1 Flashcards

1
Q

Mass market

A

Large market, many similar products offered by competitors, sells into the largest part of the market

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2
Q

Niche market

A

Small specialised market, where customers have specific needs and wants

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3
Q

Advantages of targeting a niche market

A

Less competition, clear focus , builds up specialist skills, can charge higher price, customers loyal

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4
Q

Disadvantage of targeting niche

A

Less opportunity for economies of scale, likely to attract competition if successful, vulnerable to market change

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5
Q

Implications of dynamic markets

A

Greater need for innovation, have to adapt to change quickly, can lead to market growth

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6
Q

Risk

A

The possibility that things will go wrong, risks can be planned for and can be assessed

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7
Q

Uncertainty

A

Unpredictable and uncontrollable events

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8
Q

Product orientation

A

Develops products on what is it good doing and focuses on design performance and quality

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9
Q

Market orientation

A

Responds to customers wants and needs, focuses on meeting customer preferences

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10
Q

Product orientation evaluation

A

Increased economies of scale, focus on what it does best

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11
Q

Market orientation evaluation

A

Higher chance of success, increased customer loyalty and satisfaction

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12
Q

Product differentiation

A

Customers perceive a distinct difference between you product and competitors

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13
Q

Product differentiation evaluation

A

Competitive advantage, ideally hard to copy, strengthen customer loyalty, allow higher price, higher profit margins

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14
Q

Requirements for product differentiation

A

Capable of delivering, not easily copied, profitable, distinctive

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15
Q

Added value

A

The difference between a price of the finished product and the cost of the inputs involved in making it

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16
Q

Demand

A

The amount that customers are willing and able to buy at a given price in a liven period of time

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17
Q

Demand law

A

As price decreases demand increases

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18
Q

Factors leading to a change in demand

A

Change in consumer income, fashion tastes and preferences, demographics, external shocks, seasonal, change in price of substitutes and complementary goods

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19
Q

Supply

A

Amount of goods or service a producer is willing and able to give

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20
Q

Supply law

A

Higher price means higher supply

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21
Q

Factors leading to a change of supply

A

Changes in cost of production, introduction of new technology, indirect taxes, government subsidies, external shocks

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22
Q

Interaction of supply and demand

A

As demand increases supply increases

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23
Q

Equilibrium

A

Demand and supply are equal

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24
Q

Price elasticity of demand definition

A

Measures the extent to which the quantity demanded of a product or service is affected by a change in price

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25
Q

PED formula

A

%change in quantity demanded / %change in price

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26
Q

More than 1

A

Price elastic

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27
Q

Less than 1

A

Price inelastic

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28
Q

Exactly 1

A

Unitary price elasticity, change in demand = change in price

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29
Q

Factors affecting PED

A

brand strength, necessity, habit, availability of substitutes

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30
Q

Income elasticity of demand definition

A

Measures the extent to which the quantity demanded of a product or service is affected by a change in income

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31
Q

YED formula

A

%change in quantity demanded / %change in income

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32
Q

More than 1 (YED)

A

luxury

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33
Q

Less than 1 but more than 0 (YED)

A

necessity

34
Q

Less than 0 (YED)

A

inferior

35
Q

Factors affecting YED

A

type of product eg luxury , economic uncertainty

36
Q

Significance of YED to a business

A

Business can plan, increase product portfolio,

37
Q

Design mix

A

Function, aesthetics, cost

38
Q

Promotion

A

Sales promotion eg buy one get one free, online advertising, personal selling, sponsorships

39
Q

Branding types

A

Corporate, product, own brand

40
Q

Benefits of a strong brand

A

Charge premium prices, reduce PED, loyalty

41
Q

Ways to build a brand

A

Advertising, sponsorships, use of social media

42
Q

Cost plus pricing

A

Adding a mark up to the overall price

43
Q

Price skimming

A

Setting a high initial price then lowering it over time, eg apple

44
Q

Penetration pricing

A

Offering product at very low introductory price

45
Q

Predatory pricing

A

Prices are set low to prevent competition, is illegal

46
Q

Competitive pricing

A

Setting prices based on competitors pricing

47
Q

Psychological pricing

A

Setting prices to look lower, to appeal to customers who use emotional repsosmes to pricing eg 12.99 rather than 13

48
Q

Distribution channel stages

A

Manufacturer, wholesaler, retailer, customer

49
Q

Types of distribution channels

A

Retailers, wholesales, distributors, agents

50
Q

Retailers

A

Final step in the chain, deals directly with customer, chains of shops, department stores, independent shops

51
Q

Wholesalers

A

Buy in large quantities, sell to retailers

52
Q

Distributors

A

Sell on products and serve as a local sales point, eg building supplies, industrial clothing

53
Q

Agent

A

Specialist distributor, does not hold stock, operate in tertiary sector eg travel, insurance

54
Q

Direct distribution

A

Producer and consumer deal directly with each other

55
Q

Indirect distribution

A

Involves use of intermediaries between producer and consumer

56
Q

Changes in distribution factors

A

Online retailing, changing from product to a service

57
Q

Product life cycle

A

Development, introduction, growth, maturity, decline, (extension strategy)

58
Q

Extension strategies

A

Lowering price, changing promotion, changing product, repositioning the product

59
Q

Boston Matrix

A

Assesses the position of each product in product portfolio to help determine right marketing strategy

60
Q

Stars

A

Product with Hugh market share and high growth

61
Q

Cash cow

A

High market share and low growth

62
Q

Question marks

A

Low market share high growth

63
Q

Dogs

A

Low market share low growth

64
Q

Flexible workforce

A

Working patterns which don’t fit the normal 9-5

65
Q

Multiskilling

A

Carry out variety of tasks

66
Q

Part time

A

Work fewer hours than full time

67
Q

Temporary staff

A

Only employed for certain amount of time

68
Q

Advantage of internal recruitment

A

Cheaper, quicker, provides opportunity, motivation, already knows business

69
Q

Disadvantage of internal recruiemtm

A

Limits number of applicants, limit new ideas, creates another job that needs to be filled

70
Q

Induction training

A

New employee receives when they first join

71
Q

On the job training

A

Receives training while still in the workplace

72
Q

Off the job training

A

Attendance at a college, online training , professional development course

73
Q

Span of control

A

Number of subordinates for whom a manager is directly responsible for

74
Q

Centralised structure

A

Decision making firmly at top of the hierarchy

75
Q

Decentralisation

A

Decision making is spread out to include junior manners

76
Q

Tall structure

A

Many layers of hierarchy, allows tighter control, longer for communication to pass

77
Q

Flat structure

A

Fewer layers, less staff lower costs, staff given greater responsibility

78
Q

Matrix structure

A

Individuals work across teams and projects as well within their own department

79
Q

Taylor motivational theory

A

Workers are motivated by pay

80
Q

Mayo motivational theories

A

Motivated by having social needs met

81
Q

Maslow

A

Physiological needs of employees

82
Q

Herzberg

A

Hygiene factors like pay, supervision, working comditons amd pay, motivators like recognition, achievement, growth

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