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Howorth/Car > 1.1 > Flashcards

1.1 Flashcards

1
Q

Market is

A

The group of individuals and organisations that make up the pool of actual and potential customers
Markets are dynamic, they are always changing
Business must be aware of market trends and evolving customer customer requirements

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2
Q

Market size is

A

The total value of a market in terms of money spent, or number of products

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3
Q

Market growth is

A

The percentage change in the size of the market compared to the previous year

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4
Q

Market share is

A

The percentage of the market in held by one company or product

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5
Q

Price premium calc

A

Revenue market share/unit market share

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6
Q

Dynamic market is

A

One that is subject to rapid or continuous changes in supply and demand
-Supply changes due to competition between firms
-Demand changes due to change in consumers

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7
Q

Offensive market is when

A

They try and increase sales or develop new markets
-Break into new markets
-Invest in innovation
-Acquire other businesses
-Move into related market

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8
Q

Defence marketing is when

A

They react to competition and try to maintain their market share
-Cutting cost
-rationalisation of products by cutting unsuccessful products
-Capacity reduction

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9
Q

Mass market is
Advantage / disadvantages

A

The market that is aimed at the general population, E.G toothpaste

AD
-Not as expensive
-Large scale production
-Marketing is straightforward
-Large, volume of sales means high revenue

DIS
-Lots of competition
-high marketing costs to create brand image
-High volume production, flexible to the demand changes

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10
Q

niche market is
Ad/dis

A

Is a subset of the main market and addresses a specific need

AD
-Charge premium price
-Easier to target customers
-Small scale, production can be flexible and follow trend
-Less competition than mass market

DIS
-Risky as demand can change
-Higher unit costs are there as no economies a scale

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11
Q

Three ways firms compete

A

-Price
-Product range
-Customer service

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12
Q

Why markets change

A

-economic growth
-The nature of the product
-Changes in tastes and fashion
-Social changes
-Changes in technology
-The amount of competition

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13
Q

What is innovation?

A

Carrying out research and development, organising production, and planning a marketing campaign
New product development involves a degree of risk taking improving and existing product
Changing design from original product

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14
Q

Ad/ dis of Innovation

A

AD
-Gaining a competitive advantage
-Adding values so that a higher price can be charged
-Branding switching

DIS
-High costs of research and development
-High risk of failure
-Impact on sales of existing product which may be cannibalism
-Distribution caused to the way businesses, operate

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15
Q

online retailing is

A

-Buying and selling through the Internet

It is a dynamic market

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16
Q

Ad/dis of online retailing

A

AD
-Open 24/7
-Reach international markets
-Low overheads, no need for retail premises
-Stock can easily be withdrawn or updated to keep up with the dynamic market
-Flexible-owners can be anywhere in the world
-Opportunities for fast growth

DIS
-Increase number of returns
-issues with online security, E.G.fraud, spam viruses
-very competitive market hard to drive traffic to sites
-Owners need IT skills
-Competitors know exactly what you are up to .E.G.business model, prices, activity

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17
Q

Rewards and risks for businesses

A

RISKS
-failure
-Poor management
-Lack of financial control
-No demand
-External shocks
-Poor marketing research

REWARDS
-Increased sales
-Profit and growth
-Returns on investment for owners
-Increased share price
-Customer loyalty and brand recognition

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18
Q

What are calculated risks?

A

Risks which are carefully considered and the cost and benefits have been weighed up

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19
Q

What is a business plan?

A

It is a formal statement of a business goals, reasons why they are attainable, risks, rewards, marketing, financial plans, production, and staff plans

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20
Q

Advantages of planning financial forecasts

A

-Raise finance from investors
-Managed cash flow
-Avoid bankruptcy

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21
Q

Planning
management and employees can

A

Recruit experienced staff
Motivate workers
Effective communication

22
Q

Planning
Market and sales can

A

Target customers effectively
Forecast sales
Develop promotion strategies

23
Q

Planning operations can

A

Invest money effectively
Manage suppliers
Manage overhead costs

24
Q

Calculated risks refer to

A

Situation where the business has an idea about the potential outcome and the chance of them occurring

25
Q

Uncertainty happens when

A

A business doesn’t know what it is likely to happen in the future and can not measure and predict outcome

(External shocks)

26
Q

What can reduce risks when
1. Starting a business
2. Expanding a business
3. Entering international markets

A
  1. Detailed business plan, match your business idea to your available finance
  2. Finance your growth, without taking on debt
    Carry out detail research into new opportunity
  3. research the legal, political and economic situations carefully.
    Select the most appropriate method to enter the market in another country
27
Q

Market orientation means

A

Means decisions taken, are based around info about customers, needs and wants rather than what the business thinks is right for the customer
- Usually most successful businesses

28
Q

Product orientation means

A

Means the business develops products based on what it is good at making or doing, rather than what customers want
(Usually criticised as often leads to higher risk)

29
Q

Market research is

A

The collection of data on customers habits to help decision making in marketing

30
Q

Quantitative/qualitative

A

Quantitative- (provides facts)
-Data collected that is based on facts or numbers. It is usually easier to analyse than qualitative data.

Qualitative-(opinions of customers)
- Data based on the opinions of those being asked

31
Q

Primary research is

A

Is new research carried out to answer specific issued or questions
Examples:
Questionnaires, - a set of question asked to the public/customers
Loyalty cards- can track what customers buy

32
Q

Secondary research
Example

A

Secondary research makes use of information previously research for other purposes and publicly available

Government sources - finds out info about all UK households every 10 years
Market research companies - gathering data the analysing it to understand what groups of people need

33
Q

What is brand extension

A

Expanding the life of a product

34
Q

What are the risks involved in developing a new product

A

Customers may not like it and the product will fail

35
Q

Primary research ad

A
  • no one else has access to data
  • specific to businesses
36
Q

Primary research dis

A
  • Takes a long time
    -Expensive
37
Q

Secondary research ad

A

Quick
Cheap

38
Q

Secondary research dis

A

-Every one has access to the same data
-not specific

39
Q

What is big data.

A

Big data is the process of collecting and analysing large data sets from traditional and digital sources to identify trends from patterns that can be used in decision making

40
Q

Limitations of big data

A
  • Data is unstructured and difficult to analyse
  • much of the data is very recent and does not go back in time so it is more difficult to see long term trends
  • consumers are concerned about privacy and may resent the amount of data collected about them
  • loss and theft of data can damage businesses
41
Q

How businesses use big data

A
  • Analysis -help make decisions
  • to see trends
42
Q

What is sampling

A
  • Sampling involves selecting a way to ask info from representative group of customers
43
Q

Problems with sampling

A
  • Careful sample selection is needed to ensure result and representative
  • bias may be introduced to make result innaccurate
  • there will always be a margin of error in sampled data
44
Q

Bias in market research

A

Friendliness bras - tending to just agree
Social desirability bias-answering questions in a socially acceptable way
Confirmation bias - the research interprets results and leave out negative info
Leading questions-suggest answers that they are looking for

45
Q

What is market segmentation
e.g. Segments

A

A group of consumers that have similar set of characteristics

e.g.
Age, gender, income, location, religion, lifestyle, how educated you are

46
Q

Why is segmentation needed

A

Because customers differ in the…
- benefits they want
- amount they are able or willing to pay
-Media
- quantities they buy
- how to promote the product to increase sales

47
Q

Methods of segmentation

A

Geographic- customers location, region, urban/rural, acorn classification
Demographic-gender, age, occupation social , economic group, income, background
Behaviaral - rate of usage, benefits sought, loyalty status, readiness to purchase, loyalty to what products / brands
Psychographic - personality lifestyle, attitudes, class

48
Q

Benifits of segmentation

A
  • Better match your customer needs
    -Enhanced profits for business - different customers are more sensitive on price
  • retain more customers- appear to different customers
  • target marketing communication- businesses need to deliver their marketing message to different customers
49
Q

Market map is

A

A grid that measures 2 different aspects of the brands or businesses within a market

Eg. Old, female, young, male

50
Q

Purpose of market maps

A

-use it to identify the marketing strategy of competitors is a market
-Show how a market is segmented
-Identify dying gaps in the market
-To show where a sector is overcrowded
-To stop the producers from becoming over reliant on one sector

Howorth/Car (9 decks)

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