1.1.1 the market

Question 1

Market

Answer 1

Is anywhere buyers and sellers come together to transact with each other

Question 2

What does a business need to understand?

Answer 2

~ needs and wants of customers

~ buying behaviour

~ understand market segments

~ how prices and other factors influence the quantity of demand

~ size and growth rate of the overall market

~ competitors

Question 3

Niche market

Answer 3

Where a business targets a smaller segment of a larger market, where customers have specific needs and wants

Question 4

Mass market

Answer 4

Where a business sells into the largest part of the market, where there are similar products offered by competitors

Question 5

Key features of a mass market

Answer 5

~ customers from the majority in the market

~ customer needs and wants are more general and less specific

Question 6

Benefits of niche market

Answer 6

~ less competition

~ clear focus ~ targets particular customers

~ profit margins often higher

~ customers tend to be more loyal

Question 7

Drawbacks of niche market

Answer 7

~ less opportunity for economies of scale

~ risk of over-dependence on a single product or market

~ likely to attract competition if successful

~ vulnerable to market changes

Question 8

Market size

Answer 8

Is a measure of the total available demand for competitors in a market

Question 9

Key points of market size

Answer 9

~ indicates the potential sales for a firm

~ measured in terms of annual sales or revenue or volume sold per year

~ size of individual segments

~ not usually a marketing objective

~ not always easy to measure

Question 10

Market size formula

Question 11

Market growth

Answer 11

Measures the rate of change of market size, which might rising, falling, or remaining stable

Question 12

Key points of market growth

Answer 12

~ key indicator for existing snd potential market entrants

~ growth rate can be calculated by either value (revenue) or volume (units sold)

~ expressed as a percentage change on previous period

~ measured on an annual basis

Question 13

Market growth formula

Question 14

Market share

Answer 14

Is an extremely important measure, and in many business, it forms the basis for a key business objective

Question 15

Key points of market share

Answer 15

~ expressed as a percentage

~ explains how the overall market is divided up between the existing competitors

~ calculated based on market value, but volume can be used as well

~ good indicator of competitive advantage

~ look for significant +/- changes

Question 16

Market share formula

Answer 16

Sales of a business (volume or value) / Total market sales (volume or value) X100

expressed as a percentage

Question 17

Brand

Answer 17

Is a product with unique character, for instance, in design or image

Question 18

Benefits of a brand

Answer 18

~ inspire customer loyalty leading to repeat sales

~ can charge higher prices, especially if the brand has the largest market share

~ retailers or service sellers want to stock top-selling brands

Question 19

Dynamic market

Answer 19

A market that is subject to continual and rapid change

Question 20

Key reasons for change within a market

Answer 20

~ customer tastes and preferences

~ impact of technology on what customers buy and how they buy

~ impact of new market entrants

Question 21

Online retailing

Answer 21

Is a business or individual sells retail products and services through online store

Question 22

Omnichannel retail approach

Answer 22

Is where a business uses and combines a wide range of distribution channels, including digital and physical stores

Question 23

Benefits of online retailing for a business

Answer 23

~ easier market access

~ reduced overheads compared to physical stores

Question 24

Drawbacks of online retailing for a business

Answer 24

~ high set-up and infrastructure

~ increased competition

Question 25

Benefits of online retailing for a customers

Answer 25

~ increased choice ~ ease of shopping

Question 26

Drawbacks of online retailing for a customers

Answer 26

~ concerns around privacy and security ~ returning unwanted or unsuitable products

Question 27

Adapting to change

Answer 27

The ability to quickly and successfully embrace change and change effectively in response

Question 28

Competition

Answer 28

Is rivalry among sellers, where each seller tried to increase sales, profits and market share, by varying the marketing mix of price, product, distribution and promotion

Question 29

Competition can be affect the market in several ways

Answer 29

~ battle of market share ~ pricing ~ pressure to innovate ~ pressure to differentiate

Question 30

Competitive advantage

Answer 30

~ is the ability of a business to add more value for its customers than its rivals and attian a position of relative advantage ~ is a situation where a business has an advantage over its competitors by being able to offer better value, quality and/or service

Question 31

Risk

Answer 31

~ the possibility that things will go wrong ~ can be planned for and is often a deliberate decision ~ can be assessed and/or managed through techniques such as scenario planning;

Question 32

Uncertainty

Answer 32

Is caused by unpredictable and uncontrollable events that affect business, but which are beyond the control of the business