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business > 103 markets > Flashcards

103 markets Flashcards

1
Q

what is a market

A

-a market is a place where buyers and sellers meet to exchange goods and services
-this can be virtual

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2
Q

what is competition

A

competition refers to the number of businesses in a market and how they Interact with each other eg.the number of supermarkets

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3
Q

what is a local/ global market

A

-local:-selling goods and services in a specific area eg. England
-global:- selling goods and services oversees/worldwide

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4
Q

what is a mass/ niche business

A

-mass:- where a business sells to the whole market and markets the product to all the consumers in the same way
-niche:- when a business targets a small segment of the overall market that has very specific needs and wants

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5
Q

what is a trade market

A

where a business sells goods to other business , known as B2B (business to business
they operate before the product reaches the consumer eg.selling and supplying to distributors ext

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6
Q

what is a consumer market

A

a consumer market is made up of the general public who purchase the product for their own consumption -B2C (business to consumer)

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7
Q

what is a profit market/ service market

A

-product market:- for physical tangible products
-service market:-marketing of services such as telecommunications services, hospitality ext

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8
Q

what is a seasonal market

A

markets that have seasonal variations eg,ice cream

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9
Q

(+) & (-) of niche markets

A

(+) possible to build strong customer loyalty
-lower levels of competition-only one section of the market is targeted

(-) potentially lower profits as the market is smaller
-changing customer tastes could make the niche disappear

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10
Q

(+) & (-) of mass markets

A

(+) more potential sales - targeting the whole market ,less risky-more customers to target

(-) more competition, product hard to personalise, need to be able to operate on a larger scale meaning costs could be very high

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11
Q

what is market size

A

the total number of sales , by value or volume , in a market as a whole

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12
Q

what is a market share

A

the proportion of total sales in a market made by one business

market share= sales of one product
——————————- x 100
total market sales

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13
Q

why is market share important

A

-it can be used as an indicator of performance for a business in relation to its competitors
-high market share is important to a business as:
-> can lead to a competitive advantage, help attract new shareholders, increases profitability

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14
Q

what are market trends

A

these are changes and developments in the buying and selling of products and services in a market

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15
Q

what is market segmentation

A

the process of subdividing a market into different subgroups of customers who have similar characteristics , needs or wants , and proving them with goods or services that meet their needs and wants

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16
Q

how are markets segmented

A

-demographic:-age , social class ,gender,income eg.banks offer different accounts to different ages
-psychographic-:targeting of groups on personality (attitudes, options, lifestyles) eg.cars-some pay want safety and capacity for the family car
-geographic:-rural , urban , global marketing often requires different products for different counties eg.McDonalds/ Coca Cola - need different ingredients in different counties

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17
Q

(+) of segmentation to a business and its customers

A

-attracts new customers as it creates new demand and will increase revenue
-target advertising at specific groups reducing costs and time
-better at meeting customer needs and wants, can lead to repeat purchases and give business a competitive advantage

18
Q

(-) of market segmentation to a business and its customers

A

-targeting one market is risky-change in customer tastes could lead to business loosing all sales
-number of sales limited by segment size, if too small, business can’t make profit
-market research will need to be carried out to identity the segments-expensive/ time consuming

19
Q

benefits of segmentation to customers

A

-can receive a product close to expectations
-make them feel like they’re getting value for their money
-because marketing is segmented- customer is aware of new features of a product

20
Q

describe monopoly

A

-one firm dominates the market
(+) they are price makers-have more power to influence the price of products as consumers have little choice to accept it even if it is high
(-) high barriers to entry- hard for smaller businesses to be as cost efficient as monopoly

21
Q

describe oligopoly

A

-few business dominate the market
-strong brand identity ,advertising to ensure brand loyalty , don’t compete on price
(+) cheaper prices to consumer, provides customer with choice/meet different segments needs
(-) high barriers to entry - small business can’t afford high advertising costs

22
Q

describe monopolistic competition

A

-lots of small business in competition with each other-no firm dominates
-products are similar but slightly differentiated from each other-little branding
(+) few barriers to entry
(-) limited control over prices- accept the ‘going rate’-if charged more they would loose too much business

23
Q

describe perfect competition

A

-large number of business- no firm dominates
-products are identical-no product differentiation
(+)low barriers to entry
(-)all buyers and sellers have perfect information about each other-no influence on price-if firm asks for higher price than another firm-customer would buy from competitor-product is identical

24
Q

how are consumers protected from exploitation from businesses

A

-laws protect consumers from- poor quality goods that aren’t fit for purpose or match the description given, business misleading them about price
-trading standards department-checks business are complying with trading laws, trading offices visits businesses-see if goods are correctly priced, described ext

25
Q

why do consumers need protection from exploitation from business

A

-product sold may not meet description or substandard
-mislead about full price - not overcharged
-need protection when buying goods online-goods may not arrive or be as described

26
Q

explain what is meant by demand

A

-the quantity of a product that consumers are able and willing to purchase at various prices over a period of time
-the lower the price , more customers want to buy , more is demanded
(look at the demand curve)

27
Q

explain what is meant by supply

A

-the quantity of a product that producers are willing and able to provide at different market prices over a period of time
-higher the price , the more they want to supply, as the more profit they’re likely to make
(look at supply curve)

28
Q

explain what is meant by market equilibrium price

A

where the demand curve and supply curve intersect - at this price all that is supplied to the market is bought (look at the diagram)

29
Q

how does demand affect equilibrium price diagram

A

-If demand increases, then the demand curve will shift outwards or to the right; if demand falls, then demand will shift inwards or to the left.

30
Q

factors that lead to a change in the quantity supplied

A

-weather -good/bad can increase/decease demand
-new technology-speed up production/increase supply - supply curve shift to the right
-changes in business costs-if costs fall-more can be supplied at the same price-more supply

31
Q

factors that lead to a change in quantity demanaded

A

income:-when income goes up, our ability to purchase increases, and this causes an outward shift in the demand curve - income falls-decreases demand (expert for inferior goods)
-changes in tastes and fashion
-changes in population

32
Q

what does price elasticity of demand show

A

price elasticity of demand shows how sensitive demand is to a change in price

33
Q

define price elastic/inelastic

A

-price elastic:- when a price change eg.fall in price due to special offer leads to a MORE than proportional change in demand (demand changes by a larger percentage than price)
-price inelastic:- when a price changes leads to a LESS than proportional change in demand (demand changes by a smaller percentage than price)

34
Q

price elasticity of demand equation

A

PED= percentage change in quantity demanded
————————————————————
percentage change in price

35
Q

PED equation interpretation

A

0-1 price inelastic
1+ price elastic
-ignore the minus sign interpret the number only

36
Q

what does income elasticity of demand show

A

how sensitive demand is to change in customers income (YED)

37
Q

YED equation

A

YED= percentage change in quantity demanded
—————————————————————-
percentage change in income

38
Q

define income elastic/inesastic

A

-elastic:- when a change in consumers’ income results in a MORE than proportional change in demand
-inelastic:- when a change in consumer’s incomes results in a LESS than proportional change in demand

39
Q

interpretation of YED equation

A

0-1 income Inelastic
1+ income elastic

+ normal good
- inferior good

40
Q

what is an inferior good

A

goods which people tend to buy less of as they have more income- because certain products are in demand when people have less money but as they get better off they would switch to a more expensive product

41
Q

what are normal goods

A

good where people earn more money they will buy more of these goods

42
Q

what are luxury goods

A

as income rises , demand rises but more significantly

business (25 decks)

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