Business

What’s a Mass and Niche Market?

Mass Market- Largest part of market, where there are many similar products offered by competitors.

Niche Market- Smaller Segment of larger market, customers have specific needs and wants

Features of Mass and Niche Market.

Mass Market- Customers needs and wants more general/ less specific, Associated with higher production output, more potential for economies for scale

Niche Market- More Exclusive, less customers and usually more expensive

What’s Market size?

Indicates the potential sales for a firm, measured in terms of both volume (units) and value (sales).

Describe market growth.

Key indicator for existing + potential market entrants, growth rate can be calculated using Value or Volume.

Describe Market Share.

-Explains how overall market is split up between competitors

-Calculated based on market value and volume

What’s product and market orientation?

Product orientation- Business develops product based on what it is good at doing

Market orientation- Business responds to customer needs and wants and designs products according

What’s primary and secondary research with examples?

Primary Research- data collected first-hand for a specific research e.g. Online +postal survey’s, focus groups experiments

Secondary research- Data that already exists + which has been collected for different purpose e.g. Google, government reports, trade associations

Primary + Secondary research Pros.

Primary- Directly focused to research objectives, kept private, more detailed insight

Secondary- free +easy to obtain, good source of market insight, Quick to access and use

Primary and secondary research Cons.

Primary- Time consuming, risk of survey bias, sampling may not be representative

Secondary- become outdated, not tailored to business needs, specialist reports can be expensive

Quantitative + Qualitive research.

Quantitative- Concerned with data and larger sampling e.g. Surveys, Questionnaires

Qualitative- Based on opinions, attitudes and beliefs, explains customer behaviour/ why e.g. Focus groups, interviews

Quantitative + Qualitative Pros.

Quantitative- Data relatively easy to analysis, allows numerical data-see trends, data can be compared

Qualitative - Essential for new product development, understand customer needs + wants, highlight issues that need addressing

Quantitative + Qualitative Cons.

Quantitative- Focus on data rather than why things happen, no explanation for trends, lack reliability if sample isn’t big enough

Qualitative- Expensive to collect + analyse, based around opinions - may not be representative

What’s sampling in market?

Sampling is the gathering of data from a sample of respondents, should be representative of population as whole.

Sampling pros and cons.

Pros- provide useful research insight, reduce risk + cost of marketing decision, it’s flexible and reliable

Cons- Big risk if sample is unrepresentative meaning incorrect data, risk of bias in research questions, less useful in market segment where customer tastes change

What is a Target Market?

Target Market- specific segment of customers sharing common needs, wants, and characteristics that a business chooses to focus its marketing efforts and products on.

What’s market positioning?

-Perceptions a consumer has about a product to help simplify choice

-Firms will plan marketing activities to shape consumer perceptions therefore

What’s market mapping?

Using consumer perceptions to map all products in the market, maybe accreted through market research.

Market mapping pros and cons.

Pros- Helps spot gaps in market, useful for analysing competitors, encourages use of market research

Cons- Just because there is ‘gap’ doesn’t mean there is demand, not a guarantee success, how reliable is market research?

What is a competitive advantage?

A set of unique features of a company and it’s products that are perceived by customers as significant + superiors to competitors.

Ways to get a competitive advantage.

-Product design

-Product quality

-Promotion

-Customer Service

-Flexibility

Give some positioning strategies.

-Offer more for less

-Offer more for more

-Offer more for the same

-Offer less for less

Give some effective product differentiation.

-Deliver things that are important to customers on time

-Not easily copied by competitors

-Be distinctive

-Communicated + visible to customers

Give the 5 types of goods.

-Necessities

-Complementary

-Luxury

-Substitute

-Habit forming

Influences on demand.

-Price, Incomes, Fashion/taste

-Adverting/marketing, Competitors, social + demographic

-Seasonal, Government action, external shocks

How is demand measured?

Volume (how many things sold) + Value (sales value)

Fully draw + label a demand graph.

Describe Supply.

-Supply refers to the amount that producers are willing to provide at a given price

-Supply is determined by price

Give some factors that change supply.

-Cost of production

-Introduction of new technology

-Indirect taxes e.g. VAT

-Government subsides

-External shocks

Fully draw + label a supply graph.

Fully draw + label a supply and demand graph.

What’s equilibrium.

-Equilibrium means a state of equality or balance between market demand + market supply.

Draw what happens when demand + supply Increases/decreases.

What is Price elasticity of demand?

-Measures the extent to which the quantity of a product demanded is effected by a change is price.

What does elastic and inelastic mean?

-Elastic- demand changes a lot >1

-Inelastic- demand change isn’t a lot <1

Give formula for price elasticity of demand.

Give a definition for Marketing.

-Identification + Satisfaction of the customers needs and wants.

Draw the layer of a product.

Give considerations for design.

-Shape + appearance

-Fits intended use

-Ease + cost effectiveness of production

-Dimensions + preferred materials

-Image when displayed

-Should design create a “corporate identity”

Draw design Mix.

Design Mix function.

-Fit for purpose

-Convenient + easy for the customer to use

-Safe

Describe Aesthetics.

-A Product or service should provide a sensory stimulation in addition to performing a function.

What does Aesthetics include?

-Size

-Appearance

-Shape

-Smell

-Taste

What’s the YED calculation?

What does it mean if answer + or - in YED calculation?

-If answer +, it’s a normal good - Income increase, demand increase

-If answer -, it’s a inferior good - Income increase, demand decrease

What if Answer is less or greater than 1 in PED/YED Calculation?

-If answer greater than 1, product elastic

-If answer less than 1, product inelastic

Draw the YED Line.

What is above and below the line promotion?

Above the line- Advertising in media, business pay television companies or newspaper’s

Below the line- Any form of promotion which does not involve advertising

What’s three types of advertising?

-Informative advertising

-Persuasive advertising

-Reassuring advertising

Describe three types of advertising.

-Informative advertising- Using factual data, features and clear explanation to educate consumers about there product iPhone.

-Persuasive advertising-Aims to convince consumers to choose a specific brand by appealing to emotion, desires or beliefs.

-Reassuring advertising- To validate past purchases, ease buyer’s remorse and confirm consumer made right choice.

Give examples of below the line advertising.

-Sales promotion - Free gifts, coupons

-Public relations- Press releases, Press conference

-Merchandising + Packaging- Product layout, display material

-Direct mailing or direct selling

What are aims of promotion?

-Inform customers about a products existence

-Used to persuade customers products better than competitors

What’s branding?

-Aim of many business is to build powerful branding

-Involves names, sign, symbol’s or logo/design

Give types of branding.

-Global branding

-Umbrella branding

-Product branding

-Service branding

-Corporate + own-label brands

Benefits of strong branding.

-Added value

-Competitor’s advantage

-Develop the company reputation

-Reduce PED

What are the seven pricing strategy’s?

-Cost plus

-Penetration

-Price skimming

-Competitive

-Psychological

-Promotional

-Dynamic

What’s cost plus and an example?

-A business calculates the cost of producing a product + then adds a fixed percentage profit to determine selling price.

-E.g. Cake costs £4 to make. Sell on for 50% more.

What’s Penetration and an example?

-A business sets a low initial price when entering market to attract customers + quickly lowered overtime.

-E.g. a new streaming service charges £3.99 per month to encourage customers to switch.

What’s price skimming and an example?

-A business sets a high price when a product is first launched and gradually lowers it overtime.

-E.g. Apple launches a new iPhone at premium price before reducing the price later.

What’s a competitive pricing and an example?

-A business sets price based on the price charged by competitor’s.

-E.g. supermarkets as Tesco, Asda matches each other’s prices.

What’s psychological pricing and an example?

-A pricing strategy that aims to make a product appear cheaper or better value than is really is.

-E.g. Pricing product at £9.99 instead of £10

What’s Promotional pricing and an example?

-A business temporarily reduces piece or offers special deals to increase.

-E.g. buy one get one free or 25% off during black Friday.

What’s dynamic pricing and an example?

-A business changes prices frequently depending on demand, quality or customer behaviour.

-E.g. airlines increases ticket prices as seats become limited.

What’s objective of distribution?

Objective of distribution- Make products available, in right place, right time, right quantities

How is Distribution is strongly influenced by target market?

-How can business ensure products reach existing + potential customers

-How + where do customers prefers to buy product

-How important are facts e.g. stock availability

What’s are the three Distribution channel?

How do Distribution channels serve more than one purpose?

-Provide link between production + consumption

-Help gather market information

-Communicate promoted offers

-Find = communicate with perspective bug’s

-Physical distribution - Transporting + storing

-Financing - other parties finance the stock

-Risk taking- other parties take some risk

What is a retailer?

-First step in chain- deals directly with the customer

-Focused on customer markets

e.g. Multiples (Next)

-Specialists (perfumes)

-Convivence stores (spar)

-Independent (Forage)

-Franchises (McDonald’s)

Advantages of a Retailer.

-Convivence for customers

-Often UK-wide reach to customers

-Retailers chooses the ‘final price’

-Retailer handles the financial transaction

-Retailer holds stock

What’s a wholesaler?

-Wholesaler “break bulk”

-Buy in large from producer

-Breaks into smaller quantities to sell to retailers

Advantages of a wholesaler.

-Reduce the products transport costs

-Retailer’s can order in smaller amounts from wholesaler

-Wholesaler’s make money by buying at lower price, then selling at a higher price to retailer

What’s a distributor?

-Distributor’s (sell on products + serve as local sales point)

-Usually specialised in a particular industry e.g. Building supplies

-Offer products from many different producers = Greater choice

-Different from agent’s, Distributor’s hold stock

What’s an agents?

-Specialist type of distributor

-Doesn’t not hold stock

-Tend to offer services e.g. travel, insurance

-Earn Commission on sales achieved

What’s direct and Indirect distribution?

Direct- Channel where a producer + consumer deal directly

Indirect- Use of intermediacies between producer + consumer

Reasons to use Indirect Distribution.

-Geography- customers may live far away or spread widely

-Consolidation of small orders into large ones

-Better use of resources elsewhere

-Lack of retailing expertise

-Segmentation- different channels are better for different segments

What are the four types of product?

-Goods- iPhone, apples

-Services- Insurances

-Places- Hotel, theme park

-Person- Music, films

How can a product change?

-Quality

-Features

-Style

-Packaging

-Brand name + Logo

What is the product life cycle?

-Stages that products do through in their life, from development to withdrawal from the the market.

Draw the product life cycle.

Draw + give some extension strategies.

-Realising new flavours

-Adding new features

-offering a discount

What is a product profile?

-A range of products produced by a company or a brand.

What’s the Boston Matrix?

-Means analysing product portfolio + Inform decision making about marketing strategies.

Draw the Boston Matrix.

Describe what Stars are.

-High Growth with high market share

-Strong investment, potential market entrants

Describe Cash-cow’s.

-High Market share, low-growth market

-Not as much investment, established customer base

Describe Question marks.

-High-growth market, low market share

-Potential to succeeded, lots of investment to increase market share

Describe Dogs.

-Low market share, low-growth market

-Tend to generate low-profit + limited growth prospects

-Choose to discontinue or reposition products

Describe staff as a cost + features.

-Identify work force needs of business-(hiring, firing, moving)

Features

-Short term changes in employee numbers (recruitment, redundancy)

-Taller organisational structure

-Minimal communication, from the top down

-Little empowerment or delegation

Describe staff as an asset.

-Concentrate on the needs of employees

Features

-Strategic focus on longer-term planning of workforce needs

-Strong + regular two-way communication with staff

-Suits democratic leadership style

-Flatter democratic leadership style

Describe flexible working

Flexible working- Working arrangements with variety of options e.g. time, location, pattern of work e.g. Part-time working, flexitime, term-time working

Advantages of flexible working

-Savings on cost- no office + other accommodation

-Helps with staff retention- better job satisfaction

-Take advantage of development in tech access job online

-Business can be available 24/7 or for more hours

Disadvantages of flexible workforce

-More administrative work

-Loss of customers- key employee productivity

-Potentially lower employee productivity

-Manager struggle to manger + administer the flexibility

Describe Multiskilling

-Staff carry out variety of tasks

-Greater use of job rotation e.g. service industries- Hotels, retailer

What’s outsourcing?

-Delegated 1 or more business processes to external provider- manage + does processes to an agreed standard

What’s off-shoring/ Outsourcing?

Offshoring- work done overseas

Outsourcing- someone else does work

Describe In house processes V Outsource

Quality- Ensure quality + trace problems

Cost- Cheaper, doesn’t have to make profit- to small to gain economies of scale

Speed- Easier to schedule work to fit business needs

Flexibility- Closet to real needs of business/ respond limited to capacity

Describe Outsource processes V In house

Quality- Specialist, greater experience

Cost- likely to achieve economies of scale + motivated to keep cost low

Speed- Response set on recruitment of outsourcing content

-Flexibility- Greater capacity + Flexibility than in-house

Describe Dismissal + Redundancy.

Dismissal- dismissed due to breach of contract/ poor behaviour or performance, maybe unfair to legal claim

Redundancy- Job loss no longer needed- requires consultation + Redundancy payment

What’s employee representation?

-Employee in formal structure- involved in decision making of business

Give some legal requirements to consult with employees.

-Proposed redundancy programmes

-Employees transferred from one employer to another

-Changes to pension requirements

Reasons for formal system of employee representation.

-Employees views known to managers

-Strength knowledge of workplace issues

-Create trust between employees + management