Theme 1 Topic 9 - The Market

Question 1

Define Niche Marketing

Answer 1

Targeting a relatively small segment of the market

Question 2

What are three advantages of niche marketing?

Answer 2

Charge higher prices, Less competition, Easier to maintain quality

Question 3

What are three disadvantages of niche marketing?

Answer 3

Less customers/sales, Changes in demand make them vulnerable, Large firms may join market

Question 4

Define Mass Marketing

Answer 4

Targeting a large part of the market or the whole market with a product that appeals to a wide range of customers

Question 5

What are three advantages of mass marketing?

Answer 5

More customers, More profit overall, Smaller businesses unable to enter the market

Question 6

What are three disadvantages of mass marketing?

Answer 6

Smaller market size, Sell for less, Changes in demand lead to half empty warehouses

Question 7

Define Market Size

Answer 7

The total sales of all the companies within a market place

Question 8

What two things can the size of a market be measured by?

Answer 8

Sales volume and Sales value

Question 9

Define Sales Volume

Answer 9

The number of items sold by all businesses in the market

Question 10

Define Sales Value

Answer 10

The amount of spending by all the customers in the market

Question 11

What two ways can market size be calculated?

Answer 11

Adding together the number of items sold by all the different firms operating in the market or Adding together the sales revenue of all the businesses in the market

Question 12

Define Market Share

Answer 12

The percentage of total market sales held by one firm

Question 13

Market Share =

Answer 13

The businesses sales/Total market sales x 100

Question 14

Define Market Leader

Answer 14

The business with the largest market share

Question 15

Define Dynamic Market

Answer 15

One with the potential to rapidly change

Question 16

What type of market is online retailing?

Answer 16

Dynamic and unpredictable

Question 17

What are three advantages of online retail for businesses?

Answer 17

Easy to access market, Reduced overheads, Potential for rapid growth

Question 18

What are three disadvantages of online retail for businesses?

Answer 18

Website costs, Security and fraud, Customer trust

Question 19

What are three advantages of online retail for customers?

Answer 19

A wider range of products available, Convenient, Compare prices

Question 20

What are three disadvantages of online retail for customers?

Answer 20

Can’t see quality before buying, Shipping costs, Delivery time

Question 21

Define Disruptive Technology

Answer 21

Where new technology has the potential to change the way the market operates

Question 22

Define Competition

Answer 22

When two or more businesses act independently to supply goods and services to the same group of consumers

Question 23

What are the two types of competition?

Answer 23

Direct and Indirect

Question 24

Define Direct Competition

Answer 24

When businesses produce similar products that appeal to the same group of consumers

Question 25

Define Indirect Competition

Answer 25

When different businesses make or sell products that are not in direct competition but compete for the same consumer expenditure e.g. HMV and Odeon

Question 26

Most companies operate in highly competitive environments, so what two things do they need to be?

Answer 26

Innovative in improving their product range and Competitively priced

Question 27

Define Risk

Answer 27

Something that can be planned for - probabilities of outputs are known or at least understood or considered. It is a conscious decision that entrepreneurs will make if the potential rewards are high

Question 28

Define Uncertainty

Answer 28

Caused by unexpected and often external factors outside of the businesses control