Unit 4.1 the role of marketing

Question 1

concentration ratio

Answer 1

The concentration ratio is an indicator of the degree of competition in an industry by calculating the sum of the market share held by the largest specified number of firms in the industry.

Question 2

Ethical code of practice

Answer 2

Ethical code of practice refers to guidelines that help businesses to act in a moral way by considering what society accepts as ethically right or wrong.

Question 3

Market concentration

Answer 3

Market concentration measures the degree of competitiveness that exists within a market by calculating the market share of the largest few firms in the industry.

Question 4

Market growth

Answer 4

Market growth refers to the rate at which the size of a market is increasing, typically expressed as the percentage increase in the market size of an industry per year.

Question 5

Market leadership

Answer 5

Market leadership is the position of a business which has the largest market share in a given market for a particular good or services.
Market orientation is a marketing approach adopted by businesses that are outward looking by focusing on making products that they can sell, rather than selling products they can make.

Question 6

Market share

Answer 6

Market share measures an organization’s portion of the total value of sales revenue in a specific industry.

Question 7

Market size

Answer 7

Market size refers to the magnitude of an industry, usually measured in terms of the value of sales revenue from all the businesses in a particular market, per time period.

Question 8

Marketing

Answer 8

Marketing is the management process of predicting, identifying and meeting the needs and wants of customers, usually in profitable ways.

Question 9

Marketing objectives

Answer 9

Marketing objectives are the specific marketing goals of an organization, such as increased sales revenue, greater market share and market leadership.

Question 10

Marketing strategies

Answer 10

Marketing strategies are the medium- to long-term plan to achieve an organization’s marketing objectives.

Question 11

Needs

Answer 11

Needs are the essential necessities that all humans must have to survive, such as food, shelter, warmth and water.

Question 12

Market growth rate formula

Answer 12

Market growth rate =
Current market size - Original market size ($) /
Original market size
× 100

Question 13

Market Share formula

Answer 13

Market Share = Firm’s sales revenue / Industry’s sales revenue
× 100

Question 14

The two main advantages to a business in being market orientated are:

Answer 14

Greater flexibility
Lower risk

Question 15

Greater flexibility
(The two main advantages to a business in being market orientated are)

Answer 15

Businesses can respond quickly to changes in the market as they have access to relevant data and information about customers. Market orientated businesses are also more able to anticipate changing market trends and hence prepare for such changes.

Question 16

Lower risk
(The two main advantages to a business in being market orientated are)

Answer 16

Market orientated businesses can be more confident that their products will sell and be more successful. Decisions based on scientific methods, logic and reasoning tend to be of lower risk. Without proper market research and data analysis, the cost of marketing a product is far more likely to be a gamble.

Question 17

The marketing department of an organization tends to have four main or generic objectives:

Answer 17

• Ensure that the right products are supplied to fulfill the needs and wants of customers.
• Set the correct price so that customers can afford to buy the product (and to ensure that they do not buy from a competitor).
• Distribute (or place) the products conveniently for customers to buy the product.
• Ensure that there is adequate and effective promotion to
  convince customers to buy the firm’s products.

Question 18

product orientation

Answer 18

marketing approach used by a business which is inward looking as they focus on selling the product that they can make rather than making products they can sell.