1.1

Question 1

what is a market

Answer 1

the group of individuals and organizations that make up the pool of customers

Question 2

what is market size

Answer 2

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

Question 3

what is market growth

Answer 3

the % change in the size of a market compared to the previous year

Question 4

how do you calculate % change

Answer 4

(difference/original) X100

Question 5

what is a mass market

Answer 5

market that is aimed at the general population

Question 6

what is a niche market

Answer 6

subset if the main market that addresses a specialist need

Question 7

what is a dynamic market

Answer 7

one that is subject to rapid or continuous changes in supply & demand

Question 8

list 5 reasons markets change

Answer 8

economic growth
trends
technology
competition
nature of product (luxary)

Question 9

state the 3 ways firms compete

Answer 9

price
product range
customer service

Question 10

what is offensive marketing

Answer 10

trying to increase sales or develop new markets

Question 11

what is defensive marketing

Answer 11

reacting to competition & trying to maintain market share

Question 12

what is innovation

Answer 12

improving a product which already exists

Question 13

what are the advantages of innovation

Answer 13

gain a competitive advantage
add value so a higher price can be charged
encourages people to switch brand loyalty

Question 14

what are the disadvantages of innovation

Answer 14

high research and development costs
high risk of failure
existing products may be cannibalised
disruption to business operations

Question 15

what is online retailing

Answer 15

selling items through the internet

Question 16

what are the advantages of online retailing

Answer 16

open 24/7
reach international markets easily
low overhead (no rent costs)
stock can easily be withdrawn or updated
flexible for customers and the business

Question 17

what are the disadvantages of online retailing

Answer 17

high number of returns
issues with online security
very competitive market
hard to drive traffic to sites
owners need IT skills
competitors can easily see competition

Question 18

what are risks of having a business

Answer 18

insufficient demand due to poor market research or saturated market
external shocks such as economic factors
poor execution due to poor management

Question 19

what are rewards of having a business

Answer 19

increased sales
profits and growth
return on investment
customer loyalty
brand recognition

Question 20

what are calculated risks

Answer 20

a risk which has been carefully considered and the costs and benefits have been weighed up

Question 21

what is a business plan

Answer 21

a plan created to assess new ideas, set business goals and find a strategy

Question 22

how can a business reduce risk financially

Answer 22

raise finance from investors
manage cash flow
avoid bankruptcy

Question 23

how can a business reduce risk managerially

Answer 23

recruit experienced staff
motivate workers
effective communication

Question 24

how can a business reduce risk through marketing

Answer 24

target customers effectively
forecast sales
develop a promotion strategy

Question 25

how can a business reduce risk operationally

Answer 25

invest money effectively manage supplies manage overheads and costs

Question 26

define uncertainty

Answer 26

when a business doesn't know what is likely to happen in the future and can not measure and predict outcomes

Question 27

identify 2 ways to reduce risk when starting a business

Answer 27

have a detailed business plan match your business idea to available finance

Question 28

identify 2 ways to reduce risk when expanding a business

Answer 28

finance growth without taking on debt carry out detailed research on new opportunities

Question 29

identify 2 ways to reduce risk when expanding internationally

Answer 29

research the legal, political and economic situation select the most appropriate methos to enter the international market

Question 30

what is big data

Answer 30

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

Question 31

what are the limitations to big data

Answer 31

- data is unstructured and difficult to analyse - a lot of the data is very recent making it hard to see long term trends - customers may be concerned about privacy and not allow data to be collected - loss and theft of data will damage a businesses reputation

Question 32

state 5 ways businesses use big data

Answer 32

- location - retail e-commerce data - user interactions - target specific customers - innovate

Question 33

what is sampling

Answer 33

involves selecting a way to ask for information from a representative group of customers

Question 34

what are the problems with sampling

Answer 34

- careful sample selection is needed to ensure results are truly representative - bias - margin of error

Question 35

how are customers bias in market research

Answer 35

- people wanting to agree and be positive to look nice - answering questions in the way they think is socially acceptable - answers are given that the survey is looking for (leading questions) - confirmation bias, people want to agree with those around them

Question 36

what is market orientation

Answer 36

decisions taken based around information about customer needs and wants rather than what the business thinks is right for the customer

Question 37

what is product orientation

Answer 37

the business develops a product based on what they are good at making rather than what the customer wants

Question 38

what is quantitative data

Answer 38

number and statistics can create graphs find trends

Question 39

what is qualitative data

Answer 39

opinions and in depth reviews hard to analyse

Question 40

state some examples of primary research

Answer 40

questionnaires interviews observation loyalty cards focus groups test marketing

Question 41

state some examples of secondary research

Answer 41

annual reports internal data government sources trade journals market research companies

Question 42

what is brand extension

Answer 42

innovating/changing some elements of a product in order to extent the product life cycle

Question 43

what is market mapping

Answer 43

illustrates the range of positions that a product can take based on 2 dimensions that are important to customers (e.g. price and quality)

Question 44

what are the advantages and disadvantages of market mapping

Answer 44

+/ spots gaps in the market useful to analyse competitors encourages market research -/ gaps in the market doesn't mean demand dependent on reliability of market research