Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business > 1.1 and 1.2 > Flashcards

1.1 and 1.2 Flashcards

1
Q

What is a market?

A

Any medium in which buyers and sellers interest and agree to trade at a price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is a niche market?

A

Where a business identifies a small market with specific needs for specialised products or services.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is a mass market?

A

A very large market where most people will tend to buy the same or similar products. Involves mass marketing.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Advantages of mass markets?

A

Mass producers have many customers, a standardised product and high sales revenues.
They can use their profits to expand output further, increasing market share.
Mass production usually means lower production costs and so lower prices.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Disadvantages of mass markets?

A

Competition may be stiff
Being price competitive reduces profit margins
High advertising and promotional costs may reduce profitability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Advantages of niche markets?

A

Less competition in some markets
Meeting customer need may be easier
Increased loyalty and repeat purchases
May be more flexible; can respond to changes in the market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Disadvantages of niche markets?

A

Little room for expansion
Vulnerable to economic downturns & changes in consumer tastes
Successful niche producers can be taken over by bigger businesses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is market size?

A

The actual number of items sold measured by sales revenue or volume

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is market share?

A

The amount sold by a single business as a % of total market sales for a specific product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How can profit be used to increase market share?

A

Attracting more customers with keen prices
Developing their products so that they are perceived as superior to competing products
Offering services that are attractive e.g. good customer service

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are dynamic markets?

A

Markets that are constantly changing.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Steps of market change?

A 
Consumer demand
⬇️
Innovation
⬇️
Government intervention
⬇️
Competition
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is production innovation?

A

Occurs when new technologies make it possible to create completely new products or improve the quality of existing ones

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is process innovation?

A

Means using new technologies to improve production methods, so that costs are reduced.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What businesses can do to compete?

A 
Lower prices
Better quality 
More choice
Innovation
Greater efficiency
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is product orientation?

A

Means that a business will focus its efforts upon creating the product rather than responding to the needs of the market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is market orientation?

A

A business will concentrate on consumer preferences and decisions will be based on their understanding of the market.

18
Q

Advantages and disadvantages of primary research?

A

Can be designed to meet exact needs
Info is relevant and up to date

Can be expensive and time consuming
Care must be taken to avoid errors

19
Q

Advantages and disadvantages of secondary research?

A

Hard work already done by someone else
Easy and cheap to collect

May not fix the exact needs of the business
May be out of date or inaccurate

20
Q

Limitations of market research?

A

Can only give accurate results if questions are well designed and do not lead interviewee in a certain direction
Samples must be big enough to be representative but not too costly
Sample must not be biased in terms of representation
Tricky in foreign markets
Some markets are so dynamic that research goes out of date quickly

21
Q

What is market segmentation?

A

The way markets can be divided up into segments, each of which has different customer preferences.

22
Q

Advantages of market segments?

A

Means that a business can design products to meet needs of customers with distinct preferences > premium prices
Because consumers get exactly what they want, brand loyalty & repeat purchases occur

23
Q

Disadvantages of market segments?

A

Can raise production costs and prices
Selling in a whole range of markets may be costly
Targeting a mass market and cutting costs by focusing on a single standardised product may be more profitable

24
Q

What is market positioning?

A

Examines customers views on individual products or brands, in relation to each other.

25
Q

What does market position help businesses to do?

A

Design a product that fits the preferences of a target market
If a business can find a gap and design a product for a neglected market, there will be little competition

26
Q

What is a market map?

A

A tool that plots brands in the market according to how they meet customers needs

27
Q

Advantages and disadvantages of market mapping?

A

Enables a business to spot gaps in the market
Can help a business to differentiate its product

Can be hard to catergorise some products/services
Identifying a gap does not mean there is a need for it

28
Q

What is adding value?

A

When a business increase the worth customers place on a product by improving it or creating a fresh image allowing them to charge more

29
Q

Ways to add value?

A

Introduce new products
Re-design existing ones
Target product reliability or customer service with staff training
Create a USP

30
Q

Factors that cause a change in demand?

A 
Change in price of substitute or complementary goods
Incomes
Fashions, tastes and preferences 
Advertising and branding
Demographics
External shocks
Seasonality
31
Q

Factors causing a change in supply?

A 
Changes in the costs of production
New technology
Indirect taxes
Government subsidies 
External shocks
32
Q

What is PED?

Formula?

A

Measures the extent to which a change in price leads to a change in quantity demanded

PED = % change in QD / % change in P

33
Q

Price elastic numerical value?

A

Beyond -1

34
Q

Unit price elasticity numerical value?

A

-1

35
Q

Price inelastic numerical value?

A

Between 0 and -1

36
Q

Factors influencing PED?

A

Number and closeness of substitutes
Luxury or necessity goods
Proportion of income spent on a good
Time scale

37
Q

What is YED?

Formula?

A

Measures the responsiveness of quantity demand to a change in income.

YED = % change in QD / % change in Y

38
Q

Income elastic numerical value?

A

Greater than 1

39
Q

Unitary income elasticity numerical value?

A

1

40
Q

Income inelastic?

A

Between 0 and 1

41
Q

Factors affecting YED?

A

Luxury or necessity good

Business (15 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions