Theme 1

Question 1

The market

Answer 1

A market is any place where buyers and sellers meet to trade products.

Question 2

Mass market

Answer 2

Aimed at the general population

Question 3

Niche market

Answer 3

Subset of the main market and addresses a specialist need

Question 4

Two ways to measure market size

Answer 4

Volume of sales/quantity of products sold
Value/total amount spent by customers

Question 5

Brands can be used to :

Answer 5

Differentiate products from rivals
Create customer loyalty
Help product recognition
Develop an image
Charge premium prices

Question 6

Product orientation

Answer 6

The most important factor when providing products for a market. A product oriented company put in maximum effort on producing quality products and fixing them at the right price

Question 7

Market orientation

Answer 7

The customer is the most important factor when providing products for the market the business has a sensitivity to customer requirements and researches what customers want and need.

Question 8

Risk

Answer 8

The possibility a business will have lower profits or experience loss

Question 9

Uncertainty

Answer 9

When a business is unable to predict

Question 10

Reasons for carrying out market research

Answer 10

To find a gap in the market
To develop their products to meet customer needs
To review competition/rivals

Question 11

Market mapping

Answer 11

The process of finding the variables which differentiate brands in a market and then determine plotting them on a map to identify a gap in the market

Question 12

Micheal porters competitive advantage theory

Answer 12

Quality
Customer service
USP
Added value
Offers/rewards
Innovation
Reliability

Question 13

Communist market

Answer 13

Those in charge decide what everyone needs and make sure they provide it to all regardless of how much money people have. Those in charge control what they supply to people

Question 14

Mixed economy

Answer 14

Certain important products are controlled by outside market forces

Question 15

Free market

Answer 15

Everything is allocated according to demand those who have more can afford to get more

Question 16

Demand

Answer 16

The amount of a good that consumers are willing and able to buy at a given price. Demand relates to what consumers can actually afford to buy rather than what they want to buy

Question 17

Supply

Answer 17

Supply is measured in terms of the quantity of a good or service that a provider is willing and able to make available on the market at a given price over a given period of time

Question 18

Government subsidies

Answer 18

Payments from the government to encourage more suppliers to enter the market and to supply more.

Question 19

PED(price elasticity of demand)

Answer 19

Measures the responsiveness of demand to change in price
PED=%quantity/%price

Question 20

elastic demand

Answer 20

PED more than 1

Question 21

inelastic demand

Answer 21

PED less than 1

Question 22

inferior goods

Answer 22

products or services where demand decreases when customer income increases

Question 23

normal goods

Answer 23

(Necessities) goods or services for which demand increases when income increases

Question 24

luxury goods

Answer 24

products or services where demand increases more than proportionally when income rises

Question 25

income elasticity of demand

Answer 25

%change demand/%change income

Question 26

design mix

Answer 26

function, aesthetics, cost
changes in the design mix reflect social trends such as :
-concern over resource depletion
-designing for waste minimisation ,re-use and recycling
-ethical sourcing

Question 27

branding

Answer 27

a brand is a characteristic name or symbol that distinguishes one product from another supplier