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BUSINESS A-LEVEL > THEME 1.1: MARKETING & PEOPLE > Flashcards

THEME 1.1: MARKETING & PEOPLE Flashcards

1
Q

name types of MARKETS

A

●B2B(business to business)
●B2C(business to customer)
●local vs national
●physical markets
●online markets
●mass market
●niche market
●stock exchange market

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2
Q

advantages of MASS market

A

●appeals to large no. of customers
●more potential sale
●less risky
●mass production leads to economies of scale (lower average unit cost)
●market leader in a mass market can be very profitable

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3
Q

disadvantages to MASS market

A

●creates more competitors
●need to be able to operate on a larger scale
●product harder to personalise

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4
Q

what is MASS MARKETING?

A

●where a business sells into the largest part of the market where there are many similar products on offer

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5
Q

what is NICHE MARKETING?

A

●where a business targets a smaller segment of a larger market where customers have specific needs and wants

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6
Q

what is a MARKET?

A

●an activity a company undertakes to promote the buying/selling of a product/service

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7
Q

how to calculate market SIZE by VALUE?

A

●market size by value - the total amount spent by customers on all the products & services involved

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8
Q

how to calculate market SHARE?

A

sales of 1 brand or product
÷ total sales in the market ×100

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9
Q

what is market size?

A

●the measurement of all the sales by a business that supply products & services to that market

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10
Q

how do you calculate MARKET SIZE BY VOLUME?

A

market size by volume - the quantity of the products & services purchased

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11
Q

what are the ADVANTAGES of a NICHE MARKET?

A

●change to premium price
●easier to target customers
●small scale production can be flexible and follow trends
●less competition than in mass markets

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12
Q

what the DISADVANTAGES of NICHE MARKET

A

●very risky as demand may not be constant
●higher unit costs, so no economies of scale

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13
Q

what is the cycle of MASS MARKETING?

A

mass marketing-> higher sales-> mass production-> lower costs & higher profits

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14
Q

why is MARKET SHARE IMPORTANT?

A

● to assess their position compared to competitors
● decide if they should adjust their strategies
● are the same strategies working?

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15
Q

how does COMPETITION affect the MARKETS?

A

●competition occurs when 2 or more businesses act independently to supply goods/services to the same group of consumers

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16
Q

what are the 2 parts to MARKET RESEARCH?

A

●what a business needs to know
●how that knowledge and understanding can be obtained (research methods)

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17
Q

WHAT DOES A BUSINESS NEED TO KNOW?

A

● MARKET FUNDAMENTALS - starting point for any business, which includes:
•how BIG is the market?
(measured by sales/volume)
•how FAST is the market growing & what is the market growth potential?
•who are the existing competitors & what market shares do they have?
•how is market segmented?
•what kind of customers?
•market trends!

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18
Q

HOW can the knowledge and understanding be obtained? (RESEARCH METHODS)

A

•PRIMARY data: data collected first-hand for a specific purpose by the business
•SECONDARY data: data that already exist & which has been collected for a different purpose

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19
Q

what is a DYNAMIC MARKET?

A

A dynamic market is a market that is subject to rapid or continuous changes

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20
Q

what are some factors that influence whether a market is DYNAMIC?

A

changes in technology
changes in what consumers want (tastes & fashion)
changes in demographics (e.g. immigration)
products and services becoming obsolete
new and original ideas
adapting existing products, services and ideas

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21
Q

what is a STATIC MARKET?

A

a price point manually set by a reseller that won’t change

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22
Q

what are DIRECT competitors?

A

the business is targeting customers with the same product as a competitor

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23
Q

what are INDIRECT competitors?

A

the business sells different products but compete with each other for the customer disposable income

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24
Q

what are CONSEQUENCES of a DYNAMIC MARKET?

A

Invest in R&D (research & development)
different machinery needed so flexible workforce of staff needed
market research necessary but is very expensive to keep up with change

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25
Q

what is MARKETING ORIENTATION?

A

A business continually identifies, reviews and analyses customer WANTS AND NEEDS (market research)

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26
Q

what is PRODUCT ORIENTATION?

A

A business concentrates on the PRODUCTION PROCESS and PRODUCT itself and produce them effectively and efficiently (R&D)

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27
Q

what are ADVANTAGES of MARKET orientation?

A

-more chance of selling due to appealing to customer tastes
-respond quickly to changes in the market with having customer information
-stronger position to stand against new competitors
-anticipate market changes so have a competitive advantage

28
Q

EFFECTS of MARKET orientation

A

-continuous customer consultation (market research)
-design product according to what the customer wants
-quantity produced must match customer demand
-distribute products to match buying habits and delivery requirements of customers

29
Q

what are the ADVANTAGES of PRODUCT orientation?

A

-more chance of developing innovative products which could retail at a higher selling price (reduced price elasticity of demand)
-so can create a first mover advantage

30
Q

what FACTORS influence either choice of MARKET/PRODUCT orientation?

A

-the nature of the product
-policy decisions
-the views of those in control (marketing directors)
-the nature and size of the market
-the degree of competition the business faces within their market

31
Q

what is SECONDARY RESEARCH?

A

research available outside business collated by others

32
Q

what are search engine searches used for?

A

starting point to quickly identify the main reports/websites/organisations to speed up the research process

33
Q

what are government websites used for?

A

Office of National Statistics provide detailed insights of the UK economy and society with individual departments with detailed reports within many industry sectors

34
Q

what are trade associations used for?

A

to promote the market and protect members interests as a source of market analysis

35
Q

what are trade magazines used for?

A

essential reading for an entrepreneur with a start-up of little experience to keep up to date with market news/new products

36
Q

what are yellow pages used for?

A

online and offline information that give details of existing competitors and suppliers in a market

37
Q

what are comparision sites used for?

A

allows a start-up too compare and contrast pricing strategies of existing competitors to focus on larger consumer markets e.g. travel

38
Q

what are competitor websites used for?

A

get valuable information on the marketing mix of the business against which the start-up must compete

39
Q

what re market research reports used for?

A

to produce a variety of organisations to analyse individual markets expensive but give an overview and not detailed insights into a specific market\

40
Q

what is PRIMARY research?

A

research you conduct yourself (or hire someone to do for you.)
It involves going directly to a source – usually customers and prospective customers in your target market

41
Q

what are the main questions for PRIMARY research before trading?

A

-what do potential customers think of my new product/service?
-how can I obtain supplies of the right goods at the best price?
-what price should I charge?
-what is the best way of reaching potential customers?

42
Q

what are the CONSEQUENCES of PRIMARY research?

A

-time consuming
-expensive
-might not be accurate because answers may not be true

43
Q

what are FOCUS GROUPS used for ( primary methods)

A

-focus groups: groups of potential customers brought together to discuss their feelings about a product/market

44
Q

what are TELEPHONE INTERVIEWS used for ( primary methods)

A

-a market researcher contacts members of the public to seek answers for certain questions and popular to get an opinion

45
Q

what are POSTAL SURVEYS used for? ( primary methods)

A

-sent to the address of potential customers who are then expected to complete them at home and return them, usually in a pre-paid envelope

46
Q

what are PERSONAL INTERVIEWS used for ? ( primary methods)

A

-these are conducted face-to face with the interviewer filling in the answers given by the interviewee

47
Q

what is TEST MARKETING used for? ( primary methods)

A

-this involves selling a new product in a restricted, often geographical, section of the market in order to assess customer reaction

48
Q

what are OBSERVATIONS used for ? ( primary methods)

A

stores watch customers while they shop and gather information on customer reactions and thought processes to enable stores to gain useful data e.g. displays/offers to attract the most interest

48
Q

what are INTERNET SURVEYS used for? ( primary methods)

A
  • questionaries using this increasingly popular method enable customers to express their views about a product/service/company so give valuable information to the business
49
Q

what is QUANTITATIVE market research?

A

It uses mathematical analysis and data to shed light on important statistics about your business and market.

50
Q

what is QUALITATIVE market research?

A

information that cannot be counted, measured or easily expressed using numbers

51
Q

what are ADVANTAGES of quantitative research

A

-data summarized in a concise and meaningful way
-numerical data allows comparison of results and the identification (easy to analyze)
- useful for extrapolation ( extend for growth - sales forecasting)

52
Q

what are the DISADVANTAGES of quantitative research?

A

-show ‘what’ rather than ‘why’
-the data obtained is less useful for helping a business understand the reasons behind trends
-sample size may be wrong
-lack reliability and validity if sample is too small or biased

53
Q

what are the ADVANTAGES of qualitative research?

A

-examine WHY customers behave
-highlight issues and give detailed insight of customer thinking processes when they buy products

54
Q

what are the DISADVANTAGES of qualitative research?

A

-time consuming
-expensive to get skilled people
-on a small scale
-difficult to quantify (comparisons and analysis more difficult

55
Q

what are RANDOM SAMPLES?

A

equal chance of anyone being picked
-may select those not in the target group (indiscriminate) - random
-sample sizes may need to be large to be representative
-can be very expensive

56
Q

what are QUOTA SAMPLES?

A
  • by segment
    -not randomly selected
    -specific number on each segment are interviewed
    -may not be fully representative
    -cheaper method
57
Q

what are FACTORS that influence what sampling it is?

A

-target audience to be specific requirements
-budget (finance) available
-time available

58
Q

USE OF ICT- market research

A

social networking- key element of marketing and cheap way of informing customers
company websites- access to online surveys and cheap to put in place and give detailed feedback- compare to competitor websites

59
Q

what is market segmentation?

A

market divided into market segments
-each segment= customer with similar needs and wants
-target 1 product at 1 segment
-produce a range of products & target at several segments
-dividing markets allows supply products that meet customer needs

60
Q

what are the 4 ways to segment a market?

A

-GEOGRAPHIC
-DEMOGRAPHIC
-BEHAVIOURAL
-PSYCHOGRAPHIC

61
Q

geographic market segment:

A

-customer location
-region
-urban/rural
-ACORN classification

62
Q

demographic market segment:

A

-age
-gender
-occupation
-socio-economic group

63
Q

behavioural market segment

A

-rate of usage
-benefits sought
-loyalty status
-readiness to purchase

64
Q

psychographic market segment

A

-personality
-lifestyles
-attitudes
-class

BUSINESS A-LEVEL (8 decks)

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