THEME 1 REVISION

Question 1

mass market definition

Answer 1

targeting a large population of the market with a generic product.

Question 2

niche market definition

Answer 2

targeting a small population of the market with a specialised product.

Question 3

mass market pro’s

Answer 3

large scale production, large volume of sales, and more brand names

Question 4

mass market cons

Answer 4

lots of competition, and not flexible to respond to changes in demand.

Question 5

niche market pro’s

Answer 5

can charge higher prices, focus on the needs of customers, and promotion costs are lower.

Question 6

niche market cons

Answer 6

higher unit costs, and demand may not be as consistent.

Question 7

market share

Answer 7

the proportion of the total market held by one company or product, often measured by value.

Question 8

dynamic market

Answer 8

a market that us subject to rapid or continuous change due to customer preferences, innovation and competitors etc.

Question 9

dynamic market advantages.

Answer 9

meeting customer needs so more opportunity for higher sales, and can exploit new revenue streams and networks.

Question 10

dynamic market disadvantages

Answer 10

more vulnerable to market fluctuations, more investment needed, easy to loose market share, and continuous marketing costs.

Question 11

online retailing advantages

Answer 11

wider market, lower costs, and owners can be anywhere in the world.

Question 12

online retailing disadvantages

Answer 12

more competition, security issues such as fraud, and not all customers like to shop online.

Question 13

primary research

Answer 13

collecting data that doesn’t already exist. it is collected for a specific purpose and is gathered from questionnaires, interviews, surveys, focus groups and consumer panels.

Question 14

secondary research

Answer 14

collates information that is already in existence. this can be collected internally or externally. it could be existing business documents, official publications, yellow pages, and magazines etc.

Question 15

quantitative research

Answer 15

collection of data that can be measured. this involves statistical data such as sales figures and market share.

Question 16

qualitative research

Answer 16

collection of data about attitudes, beliefs, and intentions. common methods to obtain are focus groups, participant observation and interviews.

Question 17

market orientation

Answer 17

the business reacts to what customers want. the decisions taken are based around the customers needs and wants, rather than what the business assumes is correct. most successful businesses take a market-orientated approach.

Question 18

product orientation

Answer 18

the business develops products based on what is good at doing rather than the customers wants. this approach is usually criticised because it often leads to unsuccessful products.

Question 19

market segmentation

Answer 19

dividing a market into identifiable segments in which consumers share one or more characteristics e.g. demographics, geographic’s, income, and behavioural. it helps to target products and advertising at the correct target customer. it is also less wasteful of resources rather than trying to sell to everyone.

Question 20

limitations of market research

Answer 20

often biased, a small sample limits the reliability of the research, and it’s time consuming to collect.

Question 21

market positioning

Answer 21

a cross scale of high to low quality and high to low price.

Question 22

price elasticity of demand

Answer 22

the relationship between a change in the price of a product and the change in demand for the product.

Question 23

income elasticity of demand

Answer 23

the relationship between a change in income and the change in demand for the product.

Question 24

PED

Answer 24

a rise is demand = shift to the right.
a fall in demand = shift to the left

Question 25

YED

Answer 25

a rise in income = shift to the right
a fall in income = shift to the left.

Question 26

design mix

Answer 26

function, aestethics, and costs.

Question 27

cost plus

Answer 27

basing a price on the unit cost of making the product and adding a profit

Question 28

skimming

Answer 28

sets an initial high price, then price is then reduced over time.

Question 29

penetration

Answer 29

sets a low price to begin with which can later be raised.

Question 30

predatory

Answer 30

sets a low price in order to price competitors out of the market

Question 31

distribution

Answer 31

the process of getting the right product or service to the customer in the right place