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232 Terms
What is a market?
Place where buyers and sellers exchange products
What is a product (broad)?
Good or service
What is a mass market?
Largest part of market
What is a niche market?
Smaller segment of larger market
Which type of market do customers have specific needs and wants? (mass or niche)
Niche
Which market has a higher production capacity? (mass or niche)
Mass
Which market is personalised? (mass or niche)
Niche
Which market is cheaper and low risk? (mass or niche)
Mass
What is an advantage of businesses in niche markets having a clear focus?
Develop specialist skills
Which market is it easier to develop brand loyalty? (mass or niche)
Niche
Which market has the potential for economies of scale? (mass or niche)
Mass
Why does a mass market have more potential for economies of scale?
Efficient production
Buying in bulk
Use of technology
What is a major risk of operating in a niche market?
Overdependence on one product
What is a dynamic market?
Constantly changing
What determines the pace of a market’s change?
PESTLE
What is the opposite of a dynamic market?
Static market
What market generates more growth? (dynamic or static)
Dynamic
Which market requires constant innovation for competitiveness? (dynamic or static)
Dynamic
What is a risk in a dynamic market?
High competitiveness can slow growth if rivals are responding faster
What is online retailing?
E-commerce
What are the major benefits of online retailing?
Breaks geographical barriers
24/7
Low rent
Access to wider markets
Easy
What is branding?
Perception of business
What is direct competition?
Similar products
What is indirect competition?
Substitutes
What is Porter’s 5 Forces? (definition)
How competition will affect the market
What are the 5 forces?
Threat of new entrants
Threat of substitutes
Rivalry
Bargaining power of buyers
Bargaining power of suppliers
What does threat of new entrants refer to?
Likelihood new businesses can enter market
What does threat of substitutes refer to?
Potential for customers to switch to alternatives
What is bargaining power of buyers referring to?
Ability of customers to influence price and quality
What is bargaining power of suppliers referring to?
Ability of suppliers to influence the terms of their inputs to a company
What does rivalry refer to?
Competitiveness of the industry
What affects bargaining power of buyers?
Substitutes, price, number of buyers
What affects bargaining power of suppliers?
Number of suppliers, substitutes, dependency on buyer
What is the threat of forward integration for suppliers?
Threat of entering buyer’s industry so they don’t need them anymore
What is the threat of backwards integration for buyers?
Threat of producing the product themselves
What is a price war?
Competiting by cost
What is product orientation?
Business focuses on creating best possible product
What is an advantage of product orientation?
USP through quality
What is a disadvantage of product orientation?
Disconnect from customers
What is market orientation?
Focus on customer needs
What is an advantage of market orientation?
Brand loyalty
What is a disadvantage of market orientation?
Limited innovation
What is primary research?
Collected first hand
What is secondary research?
Collected by someone else
What is an example of primary research?
Interviews
What is an example of secondary research?
Market reports
What type of research is tailored? (primary or secondary)
Primary
What type of research has bias? (primary or secondary)
Primary
What type of research is quick and easy? (primary or secondary)
Secondary
What type of research could be outdated? (primary or secondary)
Secondary
What is usually the cheapest type of research? (primary or secondary)
Secondary
What is qualitative data?
Non-numerical
What is quantitative data?
Numerical
What type of data provides insight? (qualitative or quantitative)
Qualitative
What type of data is flexible? (qualitative or quantitative)
Qualitative
What type of data can you gain rapport in? (qualitative or quantitative)
Qualitative
What type of data is quick and representative? (qualitative or quantitative)
Quantitative
What type of data has no bias? (qualitative or quantitative)
Quantitative
In what data are people more likely to lie? (qualitative or quantitative)
Quantitative
How can you do research via a website?
Survey (and reviews)
What is a main disadvantage of website research?
Ignored
What is a main advantage or website research?
Cheap
What does social networking refer to?
Social media
What is the main advantage of social networking?
Can reach many
What is market segmentation?
Dividing customers into groups
How might you segment a market?
Demographic
Geographic
Psychographic
Behavioural
What is geographic?
Location
What is psychographic?
Personality
What is behavioural?
Purchase habits
What is the main reason for market segmentation?
Targeted marketing
What is a risk of market segmentation?
Over segmentation
What is the problem with over segmentation?
Inefficiency, costs, managing variations
What is risk?
Factors that aren’t expected but can be measured
What is uncertainty?
Lack of predictability
What is a monopoly?
When a business dominates a market
What is a duopoly?
When 2 companies dominate
What is an oligopoly?
When a few companies dominate
What is monopolistic competition?
Producers selling the same product and differentiating through brand
What is market mapping?
Visual diagram of how different products are perceived by customers
What is market positioning?
Defining a products unique value and differentiating it
What is an advantage of market mapping?
Helps spot gaps in market and analyse competiton
What is a risk of finding a gap in the market?
May be there for a reason
What is a disadvantage of market mapping?
Shouldn’t be used on its own
What is an advantage of market positioning?
Helps highlight USP
What is a disadvantage of market positioning?
Perception misalignment
How can a business add value?
USP
Porter’s Generic Strategies state that businesses should either be:
Low cost
Highly differentiated
What is demand?
Quantity customers are willing to buy at a given price
What is demand’s usual relationship with price and quantity?
As price increases, quantity decreases
What is supply’s usual relationship with price and quantity?
As price increases, quantity increases
What is the reason for supply’s relationship with price and quantity?
More money is in it for them if price increases so they supply more
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What is the formula to work out market share?
Sales/total market sales x 100
What is the formula to work out market growth?
Change in size/original size
What is the formula to work out a percentage increase?
New - old/old x 100
What is the formula to work out a percentage decrease?
Old - new/new x 100
What is the formula to work out PED?
% change in quantity demanded/% change in price
What is the formula to work out YED?
% change in quantity demanded/% change in income
What is equilibruim?
When supply and demand meet
What is disequilibruim?
When supply and demand don’t meet