1.1

Question 1

niche market

Answer 1

a subset of the main market that targets a specialist need

Question 2

mass market

Answer 2

market aimed at the general population

Question 3

benefits of a mass market

Answer 3

• large scale production, economies of scale and lower averag unit costs
• large volume of sales = high revenue

Question 4

drawbacks of a mass market

Answer 4

• lots of competition
• homogenous products need to be differentiatd
• high production volume not flexible to demand changes

Question 5

benefits of a niche market

Answer 5

• charge premium prices
• easier to target customers with high differentiated products
• small scale production can be flexible to follow trends
• less competition

Question 6

drawbacks of a niche market

Answer 6

-very risky as demand may not be constant
- high unit costs as no economies of scale
- limited potential for sales growth

Question 7

branding

Answer 7

a feature of a business or product thats recognised by customers and distinguishes it from competition

Question 8

Benefits of branding

Answer 8

• brand loyalty
• brand extension (customers of an established brand are more likely to try new products from the same brand)
• brand value
• brand personality

Question 9

What is market size and how is it calculated

Answer 9

the overall size of the market

Volume of sales

Question 10

What is market growth and how is it calculated

Answer 10

% change in size of the market or sales of a firm within a market

new-old/old x100

Question 11

What is market share and how is it calculated

Answer 11

% of a market that is taken by a business/product

sales of x/total sales in a market x100

Question 12

Dynamic market

Answer 12

one thats subject to rapid and continual change and can be due to:
- consumer preferences
- impact of tech
- competition

Question 13

Online retailing

Answer 13

Business that only exists online

Question 14

Benefits of online retailing

Answer 14

• lower overheads
• more accessible as open 24/7
• easier to take global
• no need for staff to take orders
• stock can be easily withdrawn or updated
• easy to set up
• opurtunities for fast growth

Question 15

Drawbacks of online retailing

Answer 15

• returns are 2x rate of physical stores
• very competitive prices
• issues with online security put off older customers
• very competitive market
• owners need IT skills

Question 16

What is process inovation

Answer 16

making operations of a business more efficient and faster

Question 17

What is process innovation

Answer 17

developing new products

Question 18

Innovation

Answer 18

new ideas that can be used in production or turned into products

Question 19

benefits of innovation

Answer 19

• development of a USP leads to competitive advantage
• ability to charge premium prices due to better quality
• improves efficiency of process
• reputation as being innovative

Question 20

Drawbacks of innovation

Answer 20

heavy time and resource commitment with no guarantee of success

Question 21

What is direct competition

Answer 21

when 2 ormore businesses sell similar products that appeal to the same group

Question 22

What is indirect competition

Answer 22

when 2 or more businesses sell different products but are competing

Question 23

What is risk

Answer 23

When the potential outcomes of a descision are known

Question 24

What is uncertainty

Answer 24

The market in which businesses operate are subject to external influences

Question 25

What is market orientation

Answer 25

the most important factor when providing products is the consumer

Question 26

Benefits of market orientation

Answer 26

- less returns - better reputation -meet customer expectations - create barriers to entry - easy to adapt to dynamic markets

Question 27

Drawbacks of market orientation

Answer 27

- expensive -time consuming - may focus on aspects that arent important to customers

Question 28

What is product orientation

Answer 28

When the product is the most important factor when providing products for a market

Question 29

Benefits of product orientation

Answer 29

- internal efficiency - lower production costs

Question 30

Drawbacks of product orientation

Answer 30

- Hard sell: employ people to convince customers they should buy the product - more vulnerable to customers

Question 31

What is market research

Answer 31

process of gathering data on consumers/ the market

Question 32

primary market research (+ examples)

Answer 32

original data gathered by the researcher first hand observations, questionnaires, focus groups, test marketing

Question 33

secondary market research (+ examples)

Answer 33

Data that already exists and has been prevously collected for a different purpose goverment departments, google, trade associations, market research

Question 34

benefits of primary market research

Answer 34

- specific to research objectives - kept private - more detailed insights

Question 35

Drawbacks of of primary market research

Answer 35

- time consuming - costly to obtain - risk of survey bias - sampling may not be representative

Question 36

benefits of secondary market research

Answer 36

- free and easy to obtain - good source of market insights - quick to access and use

Question 37

drawbacks of secondary market research

Answer 37

- quickly become out of date - not tailored to business needs - specialists reports often expensive

Question 38

Quantitative data

Answer 38

numerical data e.g. graphs, statistics and data

Question 39

Qualititative data

Answer 39

Detail rich data e.g. interviews, focus groups and observations

Question 40

Benefits of quantitative data

Answer 40

- easy to analyse - provides insights into relevent trends - easy to compare

Question 41

Benefits of qualitative data

Answer 41

- focuses on understanding customer needs - can highlight issues that need addressing

Question 42

Drawbacks of quantitative data

Answer 42

- focuses on data rather than explaining why - desnt show causation or reason - may lack reliability if sample isnt valid

Question 43

Drawbacks of qualitative data

Answer 43

- expensive to collect or analyse - based around opinions

Question 44

What is market segmentation

Answer 44

An identifiable group of individuals where consumers share one characteristic or need

Question 45

Examples of types of segmentation

Answer 45

- income segmentation -geographical - demographic - behavioural

Question 46

benefits of market segmentation

Answer 46

- focus resources on parts of a market where the business can succeed - allows business to grow in fast moving segments -helps new product development

Question 47

drawbacks of market segmentation

Answer 47

- can be imprecise - doesnt gurantee you can reach customers in it