103 - Markets Flashcards
(33 cards)
Define market
A place where buyers and sellers meet to exchange goods and services
What is competition?
Competition refers to the number of businesses in a market
what is meant by local markets?
selling goods in a specific area
what is a mass market?
mass marketing is where a business sells to the whole market and markets the product to all consumers in the same way
what is a niche market?
This is when a business targets a small segment of the overall market that has very specific needs and wants
what are trade markets?
Where businesses sell goods to other businesses, also known as B2B
what are consumer markets?
A consumer market is made up of the general public who purchase the product for their own consumption, (B2C)
what are product, service and seasonal markets?
product = for physical tangible products
service = marketing of services
seasonal = e.g. ice cream
what is market size?
The total number of sales, by value or volume, in a market as a whole
what is market share?
The proportion of total sales that a particular firm controls
what is market segmentation?
The process of subdividing a market into identifiable segments or subgroups, having similar needs, wants or characteristics and providing them with goods or services that meet their needs and wants
How are markets segmented (three ways) ?
1) Demographic- age, social class, gender, income
2) Psychographic - personality and emotionally based behaviour - attitudes, opinions and lifestyle
3) Geographic - regions of the country - different products are often needed for different countries
Evaluation of the importance and impact of segmentation to a business and its customers
(+) better meet customers needs ->loyalty
(+) can attract new customers as it creates new demand -> increased revenue
(+) advertising specific groups can be more time and cost efficient
(-) risky due to potential change in customer taste could lead to loosing all sales
(-)number of sales may be limited therefore profit may also be limited
(-) some customer may feel excluded
what are the features of a monopoly?
- one firm dominates the market
-pure monopoly = a business has 100% of market - Any business with over 25% market share is said to have a legal monopoly under the UK law and can be investigated by the CMA
- higher barriers to entry
- They are price makers
what are the feature of an oligopoly?
- few businesses dominate the market
- sell differentiated products and have strong brand identity
- heavy promotional and promotional costs to ensure brand loyalty
- do not like to compete on price
- high barriers to entry
- price makers
what is monopolistic competition?
- large number of relatively small firms compete with each other. No firm dominates the market
- few barriers to entry
- products are similar but slightly differentiated
- limited control over prices they are charging, more likely to be price takers
what is perfect competition?
- large businesses and very low barriers to entry
- products are homogenous - no differentiation
- all buyers and sellers have perfect information about each other
- they are price takers
what are consumers protected from?
-poor quality goods/services that are not fit for purpose or match the description given
- the business making untrue statements about goods/services or misleading them about the price or not giving full information
- all of the above online
what does the trading standard department do?
-checks the business is complying with the trading laws
-trading standard officers visit business to investigate whether their goods are e.g.correctly described, priced clearly and sold in correct quantities
why do consumers need protected?
-products sold may not meet description
-some customers are particularly vulnerable
-consumers need protection when buying online
what is demand?
Demand is the quantity of a product that consumers are able and willing to purchase at various prices over a period of time
what is supply?
the quantity of a product that producers are wiling and able to provide at different market prices over a period of time
what is the market equilibrium price?
The market equilibrium price is the point at which supply meets demand. At this price all that is supplied to the market will be bought
Factors that lead to a change in the quantity demanded
- incomes
- changes in taste and fashions
- changes in the price of other goods
- advertising/branding/publicity
- changes in population
- changes in government legislation (laws)
