1.1/1.2

Question 1

Market

Answer 1

Buyers and sellers trade a particular type of product in a particular place

Question 2

Mass market

Answer 2

Aimed at a large group of buyers . Wide appeal of different segments

Question 3

Niche market

Answer 3

Aimed at smaller, more specific group of buyers. Specialised products

Question 4

Benefits and drawback of mass market

Answer 4

+ more consumers to sell to
+higher sales volume
+ economies of scale

-Need a lot of capital to create sales volume
-need large production process set up
- may need to spend more on branding

Question 5

Benefits and drawbacks of a niche market

Answer 5

+ less competition
+ specialised products may suit customer needs more
+ Charge higher prices
- more risky
-smaller number and narrow range of customers
-changes in the market can lead to sales being lost quickly 7

Question 6

Market size

Answer 6

Total value of sales in a market over a certain time period
Or total number of consumers

Question 7

Market share

Answer 7

The proportion of the total market a Business holds
Total sales of business / total sales in the market

Question 8

Brand

Answer 8

Clear and obvious logo or statement that is recognisable.

Question 9

Dynamic market

Answer 9

Change and evolve rapidly

Question 10

Benefits of online Retailing

Answer 10

• business costs are lower as no need to have a physical shop
  -available 24/7
• easy to compare prices

Question 11

Limitations of online retailing

Answer 11

Some consumers like to see products before they buy them (can tackle this buy including free returns)
- need to ensure customers personal details are protected which can be expensive to maintain and can damage reputation if not done properly

Question 12

Direct competition

Answer 12

When two or more businesses sell similar products that appeal to the same group of people by many competing businesses.

Question 13

Indirect competition

Answer 13

When two or more businesses sell products that are different but are competing for the same customers

Question 14

Product 4ps

Answer 14

• firms need ensure their product is at a good quality
• is distinctive
  -Unique appeal/USP

Question 15

Promotion 4ps

Answer 15

• lots of promotional campaigns to get their products noticed
  -Informs consumers about business’s products
  -Branding methods e.g celebrities

Question 16

pricing 4ps

Answer 16

-firms in competitive markets often use competitive pricing strategies
- selling a product cheaper than rivals
-prices are cheaper in competitive markets

Question 17

Place 4ps

Answer 17

-easy to access
-e.g online apps

Question 18

Risk

Answer 18

Probabilities of different outcomes are known

Question 19

Uncertainty

Answer 19

Unexpected events- they could happen but hard to predict when

Question 20

Product orientation

Answer 20

Product is designed based on the performance, design and quality of product not the consumers wants and needs

Question 21

Market orientation

Answer 21

Product is designed based on consumer tastes and preferences
-based on demand for a product so can charge higher prices as they are meeting customer needs more

Question 22

Market research

Answer 22

The collection and analysis of market information.

Question 23

Importance of market research

Answer 23

• finds out customer needs and wants and anticipate future needs
  -predict how much demand there will be
  -learn about consumer behaviour e.g online or in person shopping
  -what price consumers will pay
  -identify competitors

Question 24

Examples of primary and secondary research

Answer 24

Primary- focus groups, surveys, interviews
Secondary- government publications, internet sources, market reports

Question 25

Benefits and drawbacks of primary research

Answer 25

-specific -exclusive to the business competitors cannot benefit - labour intensive -expensive -slow

Question 26

Benefits and drawbacks of secondary research

Answer 26

+easier +faster +cheaper -not specific -out of date

Question 27

Use of technology for market research

Answer 27

-range of websites : conduct short surveys on them or analyse the activities of people using the site e.g how many times have they revisited the website - loyalty cards sends info back to data base about consumer preferences

Question 28

Segmentation

Answer 28

Dividing the market into groups of buyers

Question 29

Different ways to segment the market

Answer 29

Demographic e.g age , geographic , income, behavioural e.g amount of use, lifestyle, hobbies

Question 30

Benefits of market mapping

Answer 30

- shows closest competitors -spot gaps in the market

Question 31

Limitations of market mapping

Answer 31

- too simplistic -opinions can be biased

Question 32

Competitive advantage

Answer 32

A condition which allows a firm to generate more sales or to be more profitable than its rivals.

Question 33

Ways to gain a competitive advantage

Answer 33

- lower costs, enables businesses to charge lower prices -product innovation, be first in the market -advertising -product differentiation -reliability and quality -customer service -convenience

Question 34

Added value

Answer 34

Price product sold for - cost to make the product

Question 35

Factors that affect demand

Answer 35

Substitutes- demand for a brand can be changed by a price of a substitute Complementary goods Consumer income Fashion, consumer tastes Advertising and branding Demographics- population changes Seasonal changes External shocks

Question 36

Factors that affect supply

Answer 36

Costs of production Indirect taxes Subsidies- increase supply New tech- increase supply Weather conditions External shocks

Question 37

Which way does the rise in demand shift the line?

Answer 37

To the right

Question 38

Which way does a fall in demand shift the demand line ?

Answer 38

To the left

Question 39

Which way does a rise in supply shift the supply line ?

Answer 39

To the right

Question 40

Which way does a fall in supply shift the supply line ?

Answer 40

To the left

Question 41

Price elasticity of demand (eq)

Answer 41

%change in quantity demanded / %change in price

Question 42

What if the price elasticity is above 1 ?

Answer 42

The product is elastic

Question 43

What if the PED is below 1?

Answer 43

The product is inelastic

Question 44

Factors affecting price elasticity

Answer 44

- Necessity- milk etc are inelastic -loyalty to a product makes a product less elastic - time- product becomes more elastic over time as internet makes it easy to find alternatives -proportion of income

Question 45

Income elasticity (eq)

Answer 45

% change in quantity demanded / change in income