Theme 1 business

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mass market

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Theme 1 topics

139 Terms

1

mass market

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

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2

advantage of mass market

associated with economies of scale

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3

disadvantage of mass market

high competition levels

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4

niche market

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

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5

advantages of niche markets

clear focus, can charge premium prices

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6

disadvantages of niche markets

vunerable to market change

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7

market share

total company sales/total market sales x 100

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8

dynamic market

market subject to continual and rapid change

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9

factors of dynamic markets

changing customer tastes, technology changes, new market entrants

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10

implications operating in dynamic market

adaption and changes, higher costs, opportunities and threats

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11

competiton

rivalry between sellers for the markets avalible demand

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12

direct competiton

rivalry from same products

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13

indirect competition

rivalry for same customers

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14

competitive advantage

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

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15

gain competitive advantage:

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

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16

value proposition: IKEA

offer more for less

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17

value proposition: Rolex

offer more for more

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18

value proposition: iPhone

offer more for the same

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19

value proposition: Primark

offer less for less

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20

product differentiation

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

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21

USP

unique selling point

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22

added value

difference between selling price and cost

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23

intangible value

adding value through building a brand

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24

differentiation requirements

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

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25

ways to add value

build brand, excellent customer service, features customers want

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26

transformation process

Process between inputs and outputs where value is added

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27

risk

the possibility of what can go wrong

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28

uncertainty

the unpredictable outcome

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29

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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30

Secondary research

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

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31

market segmentation

dividing market into smaller sections of needs and wants

  • demographic

  • behavioural

  • geographic

  • psychological

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32

product orientation

product most important factor when preparing for a market

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33

market orientation

consumer most important factor when preparing for market

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34

market mapping

can be used to find gaps in the market

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35

demand

level of interest customers have in buying a product

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36

factors affecting demand

  • changing prices of substitutes

  • change in customer incomes

  • trends

  • advertising

  • seasonality

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37

Supply

quantity of product that producers are able to deliver

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38

Supply chain

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

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39

Supply curve

shows are supply increases when customers will pay more

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40

factors affecting supply

  • change in cost of production

  • new technology

  • external shock

  • government subsidies

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41

market equilibrium

point where demand curve meets supply curve

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42

equilibrium price

amount customers want to buy = amount producers want to sell

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43

disequilibrium

not a stable price and quantity

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44

excess supply

difference between quantity demanded and quantity supplied

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45

factors affecting PED

  • substitutes

  • brand loyalty

  • habit

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46

PED more than one

price elastic

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47

PED less than one

price inelastic

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48

+ YED

normal/luxury good - income relationship with demand

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49

- YED

inferior good - poor=buy more

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50

factors affecting YED

  • degree of necessity

  • disposable income

  • substitutes

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51

Design mix

finding the right balance between desirability, affordability and reliability

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52

changes in design mix to reflect social trends

  • sustainability

  • waste

  • recycling

  • ethical sourcing

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53

branding and promotion

generating customer awareness, interest and desire

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54

digital coms + -

+ specific customer segments can be targeted

- can cut off older audiences

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55

sponsorship + -

+ build brand awareness

- high profile = expensive

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56

public relations + -

+ increase customer loyalty

- time consuming

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57

advertising + -

+ creates specific brand image

- expensive

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58

sales promotion + -

+ clear stock, impulsive purchases

- reduce full price sales

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59

personal selling + -

+ build relationship, personalised

- increase costs; staff and traini

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60

benefits of strong brand

  • added value

  • ability to charge premium prices

  • reduce PED- loyal to brand

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61

ways to build brand

  • USP

  • advertising

  • sponsorship

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62

corporate branding

use of company name or logo to promote all products

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63

Product Branding

use of unique name, design, symbol for specific product

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64

Own brand branding

use of retailer name to promote a product or service

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65

Cost plus

cost of production plus mark up

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66

Price skimming

set high then lower over time to maintain demand

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67

Penetration

set low to gain market share

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68

Predatory

low enough prices to drive rivals out of business

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69

Competitive pricing

set at market level or at discount to market

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70

Psychological

$0.99

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71

factoring influencing pricing

  • number of USP

  • PED

  • level of competition

  • brand strength

  • product life cycle

  • cost of production

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72

four stage distribution

producer>wholesaler>retailer>customer

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73

three stage distribution

producer>retailer>customer

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74

two stage distribution

producer>consumer

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75

Extension strategy Product

  • improvements

  • line extension

  • repositioning

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76

extension strategy promotion

  • change in advertising

  • price promotion

  • sales promotion

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77

how to develop customer loyalty

  • customer service

  • loyalty cards

  • saver schemes

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78

staff as assest

bring knowledge, skills and expertise

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79

staff as cost

staffing costs are one of the largest costs business face

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80

multiskilling

process of training workforce to fulfil multiple roles

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81

outsourcing

moving part of the company external for someone else to complete

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82

Flexible working

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

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83

dismissal

termination of employment by employer

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84

Redundancy

job is no longer avalible- reduce workforce size

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85

internal recruitment

filling vacancies from existing workforce

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86

External recruitment

filling vacancies from outside the business

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87

recruitment costs

  • process of hiring

  • advertising

  • recruiting

  • interviewing

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88

training costs

  • trainers

  • materials

  • facilities

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89

selection costs

  • background checks

  • visa costs

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90

on-the-job training

training while working

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91

off-the-job training

training outside of the workplace

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92

induction training

training a new employee recieves as intro to company and role

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93

chain of command

formal line of authority, who reports to whom

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94

span of control

number of employees a manager can effectively manage

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95

centralised

decison making authority concentrated at top

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96

decentralised

decison making authority distributed through organisation

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97

tall organisational structure

multiple levels of management, centralised

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98

flat organisational structure

fewer management levels, decentralised, short chain of command

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99

matrix organisational structure

built around specific products

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100

intrinsic motivation

from within a person

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