Theme 1 Flashcards
What is a market?
Where buyers and sellers meet in order to exchange goods and services.
What is a mass market?
A market that offers generic products which are broadly similar in form and function. EG/ bottled water, pencils, socks
What is a niche market?
A market that offers specialist products to consumers who share the same preferences. EG/ basketball hoops, fishing rods, goalkeeper gloves
Give three benefits of mass markets.
High number of customers
Low production costs per unit
Can use mass media advertising
Give three drawbacks of mass markets.
Give three benefits of niche markets.
Allows for higher prices to be charged
Higher profit margins
Easier for firms to enter with limited financial resources
Give three drawbacks of niche markets.
What is a dynamic market
A market that experiences continuous and rapid transformations.
EG/ Mobile phones, artificial intelligence, clothing
What does the PESTLE acronym stand for?
Political
Economics
Social
Technological
Legal
Environmental
What are the two main ways in adapting to change?
Identifying subtle changes in consumer wants and needs.
Changing earlier than rivals to offer competitive advantage.
How does competitions affect the market?
Need to keep costs low
Need to maintain competitive prices
Need to develop innovative products
Need to maintain high quality products
What is a risk?
Business risk is the exposure a company or organization has to factor(s) that will lower its profits or lead it to fail.
What is uncertainty?
Business uncertainty refers to situations in which businesses face risks that can’t be foreseen or measured.
What is the difference between risk and uncertainty?
Risk is quantifiable and data driven, uncertainty is factors that cause risk.
What are the two types of market research?
Primary research - new research conducted for a particular purpose.
Secondary research - Use of pre-existing data that has been gathered by another party.
Give three benefits of primary market research.
Addresses specific needs the business is interested in.
Data is relevant and up to date.
Can help to understand consumer psychology.
Give three benefits of secondary market research.
Often is free
Provides solid market overview
Usually based on large scale and reliable research.
Give three drawbacks of primary market research.
Expensive to conduct
Risk of bias
May need to compare with other findings
