business theme 1

What is a market?

where buyers and sellers interact to exchange goods/services.

what is market size?

the total value or volume of sales/customers in a particular Market.

what is market share? (give formula)

the percent of total Markey sales achieved by a business.

formula: business sales/total market sales x 100

what is Market growth?

an increase in demand/sales within a particular Markey over time.

what is mass market?

a large market where products have broad appeal and are sold to a large number of customers.

what is a niche market?

a small, specialised part of a larger market where customers have specific needs/wants.

what is competitive market?

a market containing many businesses competing to attract customers.

what is competition?

rivalry between businesses seeking objectives such as higher sakes, profits or market share.

who and what is the competitor?

a rival business operating in the same market.

what is direct competition?

businesses selling different products to the same target customers.

what is indirect competition?

businesses selling different products that nevertheless compete for the same customer spending.

what is a dynamic market?

a market that experiences rapid change.

what is innovation?

creating, developing and implementing a new product, process or service.

what is sales volume?

the quantity of a product/service sold during a particular period.

what is uncertainty?

a lack of knowledge about what will happen in the future.

what is market research?

gathering, analysing and presenting information about customers and markets.

what is primary market research?

collecting new information directly from customers for a specific purpose. e.g (questionnaires, interviews, focus groups)

what is secondary market research?

using information that has already been collected by another organisation.

what is qualitative research?

non numerical info about customers, opinions, attitudes, beliefs and preferences.

what is quantitative research?

numerical data that can be measured and analysed statistically.

what is a sample?

a smaller group selected to represent the wider target market.

what is market segmentation?

dividing a market into groups of customers with similar characteristics or needs.

what is a market segment?

a specific group of customers sharing on or more characteristic/need.

what is consumer behaviour?

the way consumers make decisions about purchasing and using products/services.

what is product orientation?

focusing on the products design, quality or performance rather than primary on consumers preference.

what is a focus group?

a group of people brought together to discuss and give opinions about a product/service.

what its observation?

research involving watching how customers behave.

what is test marketing?

trialling a product with a limited group/area before a wider launch.

what is respondent bias?

when respondents provide inaccurate or unrepresentative answers.

what is interview bias?

when the interviewer’s influence affects the answers given.

what are biased questions?

a question worded in away that encourages a particular answer.

what is added value?

the difference between the selling price of a product and the cost of its inputs.

Formula: Selling price - costs of inputs

what is a competitive advantage?

a feature that allows a business/product to compete more effectively than rivals.

what is differentiation?

making a product/service distinctive from competitors.

what is unique selling point?

a feature that makes a product stand out from competitors.

what is market positioning?

how business aims to make consumers perceive its product relative to competitors.

what is market mapping?

a two dimensional diagram comparing products using two important variables, often used to identify gaps in a market.

what is demand?

the quantity of a good/service consumers are willing and able to buy at a given price.

what is consumer income?

money received by consumers from employment, investments or other sources.

what are demographics?

characteristics of a population such as age gender and geographical location.

what are complementary goods?

products that are used/consumed together. e.g console + games

what is external shock?

an unexpected factor outside a business’s control that affects demand/supply.

what is supply?

the quantity producers are willing and able to sell at a given price.

what is indirect tax?

a tax placed on spending/consumption, such as VAT.

what is a government subsidy?

financial support given to produces, often to encourage production.

what is equilibrium price?

the price at which quantity demanded equals quantity supplied.

what is a shortage?

a situation where demand exceeds supply.

what is a surplus?

a situation where supply exceeds demand.

what are non price factors?

factors other than price that influence demand, such as income, advertising and seasonality.

what is price elasticity of demand? (give formula)

measures how responsive quantity demanded is to a change in price.

formula: %change in quantity demanded/ change in price.

what is price elastic demand?

quantity demanded changes proportionately more than price.

what is price inelastic demand?

quantity demanded changes proportionately more than price.

what is a luxury good?

a product consumers are more likely to buy when they have sufficient disposable income.

what is a necessity good?

a product consumers consider essential such as food or electricity.