Theme 1 business

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mass market

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Theme 1 topics

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139 Terms
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mass market

business sells to large market; universal appeal to reach wide audience

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advantage of mass market

associated with economies of scale

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disadvantage of mass market

high competition levels

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niche market

smaller segment of a larger market, specific customer wants and needs

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advantages of niche markets

clear focus, can charge premium prices

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disadvantages of niche markets

vunerable to market change

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market share

total company sales/total market sales x 100

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dynamic market

market subject to continual and rapid change

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factors of dynamic markets

changing customer tastes, technology changes, new market entrants

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implications operating in dynamic market

adaption and changes, higher costs, opportunities and threats

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competiton

rivalry between sellers for the markets avalible demand

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direct competiton

rivalry from same products

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indirect competition

rivalry for same customers

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competitive advantage

ability to add more value than rivals through better value. quality or service

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gain competitive advantage:

more efficient, higher quality, more innovation, better customer service

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value proposition: IKEA

offer more for less

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value proposition: Rolex

offer more for more

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value proposition: iPhone

offer more for the same

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value proposition: Primark

offer less for less

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product differentiation

offering something different from competitors and if customers perceive this as desirable

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USP

unique selling point

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added value

difference between selling price and cost

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intangible value

adding value through building a brand

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differentiation requirements

delivers needs and wants, distinctive, hard to copy, visible to customers

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ways to add value

build brand, excellent customer service, features customers want

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transformation process

Process between inputs and outputs where value is added

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risk

the possibility of what can go wrong

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uncertainty

the unpredictable outcome

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Primary research

the collection of original data . It involves gathering information directly from sources rather than relying on existing data or information. Collected with specific research in mind

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Secondary research

the process of collecting and analysing information that has already been gathered by someone else and already exists

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market segmentation

dividing market into smaller sections of needs and wants

  • demographic

  • behavioural

  • geographic

  • psychological

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product orientation

product most important factor when preparing for a market

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market orientation

consumer most important factor when preparing for market

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market mapping

can be used to find gaps in the market

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demand

level of interest customers have in buying a product

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factors affecting demand

  • changing prices of substitutes

  • change in customer incomes

  • trends

  • advertising

  • seasonality

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Supply

quantity of product that producers are able to deliver

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Supply chain

how each part of producing a product works from material to customer

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Supply curve

shows are supply increases when customers will pay more

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factors affecting supply

  • change in cost of production

  • new technology

  • external shock

  • government subsidies

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market equilibrium

point where demand curve meets supply curve

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equilibrium price

amount customers want to buy = amount producers want to sell

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disequilibrium

not a stable price and quantity

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excess supply

difference between quantity demanded and quantity supplied

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factors affecting PED

  • substitutes

  • brand loyalty

  • habit

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PED more than one

price elastic

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PED less than one

price inelastic

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+ YED

normal/luxury good - income relationship with demand

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- YED

inferior good - poor=buy more

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factors affecting YED

  • degree of necessity

  • disposable income

  • substitutes

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Design mix

finding the right balance between desirability, affordability and reliability

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changes in design mix to reflect social trends

  • sustainability

  • waste

  • recycling

  • ethical sourcing

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branding and promotion

generating customer awareness, interest and desire

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digital coms + -

+ specific customer segments can be targeted

- can cut off older audiences

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sponsorship + -

+ build brand awareness

- high profile = expensive

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public relations + -

+ increase customer loyalty

- time consuming

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advertising + -

+ creates specific brand image

- expensive

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sales promotion + -

+ clear stock, impulsive purchases

- reduce full price sales

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personal selling + -

+ build relationship, personalised

- increase costs; staff and traini

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benefits of strong brand

  • added value

  • ability to charge premium prices

  • reduce PED- loyal to brand

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ways to build brand

  • USP

  • advertising

  • sponsorship

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corporate branding

use of company name or logo to promote all products

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Product Branding

use of unique name, design, symbol for specific product

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Own brand branding

use of retailer name to promote a product or service

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Cost plus

cost of production plus mark up

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Price skimming

set high then lower over time to maintain demand

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Penetration

set low to gain market share

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Predatory

low enough prices to drive rivals out of business

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Competitive pricing

set at market level or at discount to market

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Psychological

$0.99

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factoring influencing pricing

  • number of USP

  • PED

  • level of competition

  • brand strength

  • product life cycle

  • cost of production

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four stage distribution

producer>wholesaler>retailer>customer

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three stage distribution

producer>retailer>customer

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two stage distribution

producer>consumer

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Extension strategy Product

  • improvements

  • line extension

  • repositioning

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extension strategy promotion

  • change in advertising

  • price promotion

  • sales promotion

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how to develop customer loyalty

  • customer service

  • loyalty cards

  • saver schemes

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staff as assest

bring knowledge, skills and expertise

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staff as cost

staffing costs are one of the largest costs business face

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multiskilling

process of training workforce to fulfil multiple roles

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outsourcing

moving part of the company external for someone else to complete

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Flexible working

no more 9-5, can respond to customer 24/7

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dismissal

termination of employment by employer

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Redundancy

job is no longer avalible- reduce workforce size

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