HL IB Business Management: 4.1 Introduction to Marketing

30 question-and-answer flashcards covering key definitions, formulas, examples and exam tips from the HL IB Business Management 4.1 Introduction to Marketing notes.

What is the definition of a market in business terms?

Any place—physical or virtual—where buyers and sellers meet to conclude a transaction.

What three actions summarise the aim of marketing?

To identify, anticipate and satisfy consumer needs and wants profitably.

How does a ‘need’ differ from a ‘want’?

A need is essential for survival (e.g., food, shelter), while a want is a non-essential desire (e.g., Nike trainers).

Why is market research critical to businesses?

It systematically gathers consumer data to inform business decisions about products and services.

Define market research in one sentence.

The process of systematically collecting, recording and analysing data about consumers to guide business decisions.

What characterises a product-oriented approach to marketing?

The firm focuses on the product’s features first and assumes it will ‘sell itself,’ often neglecting changing consumer needs.

Give one real-world example of a product-oriented business mentioned in the notes.

Gillette, which emphasises product quality and innovation in its razors.

What is market orientation?

An approach that places consumer needs at the centre of decisions, designing products to meet those needs.

Provide an example of market orientation from the notes.

Universities creating new courses based on feedback from students and employers.

In niche marketing, products are aimed at what type of market segment?

A small, specialised subset of the larger market (e.g., gluten-free products).

List two typical characteristics of niche-market products.

1) High average costs due to small-scale production; 2) Higher prices and profit margins but lower sales volumes.

What is mass marketing?

Selling products to a broad market segment, often on a large scale with lower unit costs.

Name one company from the notes that targets the mass market.

Primark (clothing).

Why don’t niche markets usually stay small for long?

Their profitability attracts competitors, increasing overall sales volumes and market size (e.g., energy drinks).

How can the size of a market be measured?

Through sales volume (units sold) or sales value (revenue).

Write the formula for calculating market share.

Market share (%) = (Sales of the business ÷ Total market sales) × 100

If Starbucks sold £328 m in a £4.6 bn market, what is its market share to two decimal places?

7.13 %.

What does a rising market share generally indicate for a firm?

That its marketing strategies are effectively winning customers from competitors.

Define market growth.

The percentage increase in the overall size, value or volume of a market over time.

Give the formula for market growth rate.

Market growth (%) = [(This year’s sales − Last year’s sales) ÷ Last year’s sales] × 100

What was the growth rate of plug-in hybrid vehicle sales that rose from 1.94 m to 2.84 m units?

46.39 %.

State one reason businesses are attracted to markets with positive growth rates.

They offer opportunities to expand, increase sales and achieve higher revenues.

What is market leadership?

A firm’s ability to maintain the largest share of a particular market or industry.

Industries dominated by a small number of large firms are called what?

Oligopolies.

Explain market concentration in one sentence.

A measure of how much combined market share the largest firms in an industry hold, indicating competitiveness.

List two advantages of being a market leader.

1) Strong brand recognition and customer loyalty; 2) Economies of scale leading to lower costs and higher margins.

How do economies of scale benefit IKEA as a market leader?

Large production volumes reduce unit costs, allowing IKEA to charge lower prices than competitors.

Why might market leaders invest heavily in R&D?

To innovate continually and stay ahead of competitors, sustaining their leadership position (e.g., Apple vs. Huawei).

What distribution advantage do market leaders typically enjoy?

Prime shelf space or presence in major retailers, enabling easy market reach (e.g., Heinz in Tesco).

Name one human-resource-related benefit of market leadership.

It attracts highly qualified job applicants who feel proud to work for a leading brand (e.g., Google).