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Edexcel A Level Business > Theme 1: Marketing and people > Flashcards

Theme 1: Marketing and people Flashcards

1
Q

What is a mass market?

A

the market that is aimed at the general population and product is sold to all customers in the same way e.g. colgate toothpaste

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2
Q

What is a niche market?

A

a subset of the main market that addresses a specialist need - caters to a particular segment of the market that is not being met by other providers e.g. sensodyne toothpaste (sensitive teeth)

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3
Q

Mass market (PROS)?

A
  • large scale production means EOS and lower AC
  • mass marketing straightforward as everyone is targeted equally
  • large volume of sales means high revenue which can be used for R&D
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4
Q

Mass market (CONS)?

A
  • lots of competition
  • homogenous: similar products need to be differentiated = expensive
  • high volume production is not flexible to changes in demand
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5
Q

Niche market (PROS)?

A
  • profitable markets to be in as can charge premium price
  • easier to target customers
  • small scale production can be flexible and follow trends
  • less competition than in the mass market
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6
Q

Niche market (CONS)?

A
  • very risky as demand may not be consistent
  • higher unit costs so no EOS
  • profits can often signal more competitors to enter the market
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7
Q

What is market size?

A

total of all the sales of all the producers in the market:

volume of sales (quantity of products sold)
value (total amount spent by customers)

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8
Q

What is market share?

A

proportion (%) of a market that has been taken by a business, product or brand

(sales of x) / (total sales in whole market) x100

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9
Q

What is a dynamic market?

A

one that is subject to rapid or continuous change e.g. shoes - as fashion tastes change rapidly, products are made to satisfy these needs

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10
Q

How do markets change?

A
  • social trends
  • technological changes
  • competitive environment
  • consumer tastes
  • demographics
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11
Q

What is online retailing?

A

the process of buying and selling goods and services over the internet (e-commerce)

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12
Q

Why is online retailing dynamic?

A

constantly changing, developing, expanding and offering customers to new products and ways to shop

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13
Q

Online retailing (PROS)?

A
  • 24/7 shopping
  • lower overhead costs
  • access to wider market, reach international markets easily
  • easy and flexible
  • opportunities for fast growth
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14
Q

Online retailing (CONS)?

A
  • some customers still prefer to purchase from store
  • issues with returns/exchange inconvenience can put off customers
  • very competitive market
  • issues with online security/fraud/scam/viruses
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15
Q

What is market growth?

A

the percentage (%) increase in the size of the market

(change in size of market) / (original size) x100

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16
Q

What is innovation?

A

when a new idea or invention is launched into the market normally with views of financial gains

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17
Q

How does competition affect the market?

A
  • business needs to be efficient
  • needs to listen consumers, be more market orientated
  • produce good quality product/service
  • must offer lots of promotions to persuade consumers to switch
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18
Q

What is risk?

A

possibility that a business will have lower than anticipated profits or experience loss rather than profit

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19
Q

What is uncertainty?

A

when businesses are unable to predict external shocks or future events, overtime this can affect spending decisions

20
Q

What is risk influenced by?

A
  • raw materials
  • overall economic climate
  • competition
  • government laws
21
Q

What is a brand?

A

a product produced by one business using a specific name, it is a trademark that cannot be copied

22
Q

What is branding?

A

the creation of an identity for the business that distinguishes that firm and its products from other firms

23
Q

Branding (PROS)?

A
  • add value to a product allowing firms to charge higher prices
  • customer loyalty and repeat purchase
  • brand extension: adding new products to a recognised brand name
24
Q

What is product orientation?

A

the product is the most important factor when providing products for the market - innovate designs and put it our onto the market

25
Q

What is market orientation?

A

the customer is the most important factor, business is sensitive to customer requirements

26
Q

What is primary research?

A

original data gathered first hand by the researcher e.g. questionnaires, interviews, loyalty cards etc.

27
Q

What is secondary research?

A

pre-existing research that can be found anywhere e.g. annual reports, government sources etc.

28
Q

What is market research?

A

collection and analysis of data to inform a business about its market

29
Q

What is quantitative data?

A

numerical data - allows to display information into charts, good for presenting

30
Q

What is qualitative data?

A

opinionated data - people’s thoughts and feelings

31
Q

Market research (PROS)?

A
  • informed decision making
  • develop a marketing plan
  • deal with change in the market place
  • become more market orientated
32
Q

Market research (CONS)?

A
  • validity (inaccurate/misleading) - sample size
  • reliability (non-specific to organisation)
  • bias (untrusted)
33
Q

Use of websites for market research?

A

pop-ups used to asked customers questions and collect emails to carry out surveys

34
Q

Use of social networks for market research?

A

searching for trends using hashtags to see whats emerging

35
Q

Use of databases for market research?

A

use data from loyalty schemes to build customer databases - info used to target customer purchases

36
Q

What is market segmentation?

A

a market split into different segments to enable a business to better target its products e.g. demographics, psychographics etc.

37
Q

What is market mapping?

A

to identify a gap in the market, useful for s business to constructs a diagram of where competitors are

38
Q

What is competitive advantage?

A

a way that the business make its products or services appear superior to the competition to the target market - achieves profits above average in that industry

39
Q

Ways to achieve competitive advantage?

A
  • added value
  • price
  • innovation
  • quality
  • reputation/branding
  • advertising
  • customer service
40
Q

What is product differentiation?

A

where a product is different from competition in some way, customers must be able to perceive the difference and may be willing to pay a premium price

41
Q

Methods of product differentiation?

A
  • reputation (small local businesses)
  • customer service (free guarantee)
  • value for money (Lidl/Aldi)
  • product feature (making it different)
42
Q

What is adding value?

A

different between the price that is charged to the customer and the input costs used to create the product/service

43
Q

Methods of adding value?

A
  • design: innovate to make product unique
  • production: achieving quality and efficiency, adds value to raw materials
  • marketing: creating an image that makes product stand out
44
Q

Benefits of adding value?

A
  • customer loyalty
  • charge higher prices (more profits)
  • protection against competitors offering lower prices (worth paying for)
45
Q

What is demand?

A

the amount that customers are willing and able to buy at each given price

46
Q

Price affecting demand?

A
  • extension (when price falls)

- contraction (when prices rise)

47
Q

Non-price factors affecting demand?

A
  • changes in consumer income (luxury rise/inferior fall)
  • fashion, tastes and preferences
  • advertising and branding (only thing company can control to demand)
  • demographics
  • complementary goods
  • substitute goods
  • external shocks
  • seasonality

Edexcel A Level Business (1 decks)

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