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Business Studies Theme 1 (A- Level) > 1.1 meeting customer needs > Flashcards

1.1 meeting customer needs Flashcards

1
Q

Define a mass market

A

A large number of customers which is undifferentiated and sells products/ services to suit a large number of customers

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2
Q

What are some advantages of mass markets

A

Cheaper to advertise
Causes Economies of scale
Huge potential number of customers

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3
Q

What are some disadvantages of mass markets

A

Fierce competition

A USP is needed to stand out (can lead to higher costs)

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4
Q

Define Economies of Scale

A

Where unit cost falls as the businesses level of production increases

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5
Q

Why do big businesses benefit from economies of scale

A

As they make higher levels of output, meaning the price per unit falls

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6
Q

What is the formula for unit costs

A

= Total costs/output

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7
Q

What is a Niche market

A

A smaller part of a large market with products tailored to fit customers specific needs

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8
Q

Give an example of a Niche market

A

Electric Tesla cars in the large market of cars

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9
Q

Does a business have to be in one market

A

No a business may have a big product portfolio which are in the Niche or mass markets

A niche market can become a mass market (like vegan food)

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10
Q

What are advantages of Niche markets

A

Have a specific target market
Less competition than mass markets
Can charge more for products

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11
Q

What are the disadvantages of Niche markets

A

Less customers than in a mass market
No economies of scale
The production cost is higher

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12
Q

How can market share be measured

A

Volume (number sold)

Value (revenue of all products in the market)

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13
Q

What is the formula for market share

A

Sales of product/ Total market sales X 100%

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14
Q

What is the formula for market size

A

Change in market size / original market size x 100%

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15
Q

What is a brand

A

Is a product with a unique character, for instance in design or image. It is consistent and well recognised

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16
Q

What are the advantages of branding

A

Inspire customer loyalty
Can lead to repeat sales and good word of mouth marketing
Charge higher prices
Can develop barriers of entry(new businesses cannot gain market share)
Can lead to a high market share
A brand itself can have monetary value
Can add to new product development

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17
Q

What are the examples of branding

A 
Logo
Tag line/ slogan
Design
Mascot
Theme tune
Sponsorship(consistent of brand image)
Advertising (what is the brand image)
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18
Q

What is a monopoly

A

A company that has over 25% market share.

The CMA control competition and market share

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19
Q

What is brand extension

A

Is where the strength of the brand can be exploited to develop new products
E.g. Oreo biscuits and oreo ice cream

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20
Q

What is brand stretching

A

Is when the brand is used for a diverse range of products, not necessarily connected.

An example is virgin airlines and virgin broadband

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21
Q

Define a dynamic market

A

Ones characterised by constant change or process

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22
Q

What are examples of dynamic markets

A

Technological market
Stock market
FOREX market
Online retail

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23
Q

What are examples of market changes

Acronym

A 
Political
Environmental
Social
Technological
Legal
Economic
24
Q

What are external factors effect on a business

A

A business cannot change external factors.
They come with risks and opportunities which can be planned for
Uncertainties of external factors means businesses have no contingency plan

25
Q

What is the negative effects of increased competition

A

Less customers
Costs increase (develop tech, more advertising)
Less sales revenue
Less profits

26
Q

What does increased competition depend on

A

Strength of competition
Customer loyalty
Market share

27
Q

What are the potential positive effects of increased competition

A 
Make business operations better
Competitive and high quality products
Increased production and productivity
Leads to innovation
Reduced unit costs
28
Q

What is production

A

The quantity of products made in a given time period - total output

29
Q

What is productivity

A

How much is produced per person in a given time period - output per person

30
Q

Define risk

A

The probability or chance that hoped for outcomes will not occur. Can be predicted, measured or quantified

31
Q

Define uncertainty

A

You cannot predict the possibility of future outcomes

32
Q

Define product orientation

A

Is where a business develops products based on what it is good at making or doing, rather than what the customer wants

33
Q

Define market orientation

A

Is where a business prioritises identifying the needs and wants of the customer and creating products to satisfy them

34
Q

Define primary research

A

New research conducted for a particular purpose

35
Q

Advantages and disadvantages of primary market research

A

Address the specific needs of the business
Data is up to date
Can help to understand the customer psychology

Expensive to do properly
Risk of bias
May be small scale, not reliable enough

36
Q

Define secondary research

A

Uses pre-existing data that has been gathered for another purpose

37
Q

What are the advantages and disadvantages of secondary market research

A

Often free
Provides a good market overview
Usually based on a large scale, reliable research

May be out of date
Not tailored to suit specific needs

38
Q

Define Quantitative research

A

Research conducted to provide statistically reliable data. Can be put into numerical data

39
Q

Define Qualitative research

A

Research aimed at providing insights. Is not numerical and often peoples opinions

40
Q

Define product proposition

A

The total mix of benefits represented by a product and offered to a customer

41
Q

What are examples of primary research

A

Surveys and Questionnaires
In depth interviews
Focus group
Observations

42
Q

What are the examples of secondary market research

A

Internet
Trade press
Government statistics
Past internal sales figures

43
Q

What are the two main limitations of market research

A

Sample size to small : consumer representation is too small to much a decision

Sample bias - certain views may skew the overall total populations views

44
Q

What are the 3 uses of ICT to support market research

A

Company websites - gather data on browser interests

Social media - can see consumer attitudes to a product/service

Database - gives data on customer behavioural patterns

45
Q

Define market segmentation

A

The process of dividing a market into smaller sections which contain customers with similar needs and wants

46
Q

How can market research help segment a market

A

Unearths insights to allow firms to maximise sales and profits

47
Q

What are the ways of segmenting a market

A

Age
Income
Gender
Geographical location

48
Q

What are the benefits of segmenting a market

A

Products and services can de designed to suit target market

Meeting customers specific needs and wants allows higher prices to be charged

Promotional activity is easier to target

49
Q

Define market positioning

A

Deciding exactly what image you are trying to create for your product relative to its competitors

50
Q

Define market mapping

A

A technique that analyses markets by looking at the features that distinguish different products or firms

51
Q

What can a marketing map allow a business to do

A

Spot a gap in the market

52
Q

Define a competitive advantage

A

A way of standing out from competitors

53
Q

What does Porters generic strategies show

A 
That there are two ways of gaining a competitive advantage :
Cost leadership (price)
Product differentiation (quality,USP, range of products)
54
Q

Define product differentiation

A

Attempting to make your product different, in the minds of customers, to any other rival in the market

55
Q

What are the advantages of product differentiation

A

Develop brand loyalty
Meets customer needs
Can charge higher prices

56
Q

Define added value

A

The difference between the cost of bought - in goods and services and the selling price of a product

57
Q

Define extrapolate

A

To predict future outcomes based on information already known

Business Studies Theme 1 (A- Level) (7 decks)

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