Understanding Markets

Question 1

Def. of The Market:

Answer 1

a place where buyers and sellers come together

Question 2

4 types of markets:

Answer 2

• Local
• National
• Physical
• Electronic

Question 3

Def. of Demand:

Answer 3

the amount of a product or service that consumers are willing and able to buy at any given price over a period of time

Question 4

Factors influencing the demand for a product (give 4)

Answer 4

• Price
• Tastes and fashion
• Marketing and advertising
• Seasonal demand

Question 5

Def. of Market Segmentation

Answer 5

the classification of customers or potential customers into groups or sub-groups, each of which responds differently to different products or marketing approaches.

Question 6

Types of market segmentation: (give 2)

Answer 6

• Demographic (age, gender, etc)

- Geographic segmentation

Question 7

Benefits of market segmentation: (give 3)

Answer 7

• Increase market share
• To assist new product development
• To identify ways of marketing a product

Question 8

Drawbacks of market segmentation: (give 3)

Answer 8

• Hard to identify the most important segments for a product
• Recognising changes in the segments interested in the product
• Meeting the needs of customers not included in the chosen segment.

Question 9

Def. of Market Size

Answer 9

the volume of sales of a product or the value of sales of a product

Question 10

Def. of Market Growth

Answer 10

the percentage change in sales over a period of time

Question 11

Factors influencing market growth (give 3)

Answer 11

• Economic growth
• Fashion
• The nature of the product

Question 12

Def. of Market Share:

Answer 12

the percentage or proportion of the total sales of a product or service achieved by a firm or a specific brand of a product

Question 13

Market Share =

Answer 13

sales of one product/brand/company
———————————————————– x 100
total sales in the market