Business Exam 1 Flashcards
(25 cards)
What is a benefit and a drawback of targeting a niche market?
+ Adds value-higher profit margin.
Less competition
More customer loyalty.
- Small market
sometimes harder to get attention
What is a benefit of adding value?
Business can charge more. Higher profit margin.
Customer loyalty.
What does differentiation mean?
How you/your company is different from others/competitors.
What are the 3 factors which influence supply to a market?
1) Price
2) Cost of production
3) Subsidies
What are the 3 factors which influence demand to a market?
1) Trends
2) Seasonality
3) Income
What does “price elastic” mean
A change in price in a product/service will have an affect in demand
What does “price inelastic” mean?
A change in price in a product/service won’t have much affect in demand
What does demographic segmentation mean?
Where business can categorise and target people based on demographics. e.g age, gender.
What are other examples of segmentation in a market?
In a market people can get split up into groups based on their similar characteristics.
What is a star product in the Boston Matrix?
They are the big market share holders, generate most cash.
What are three product extension strategies?
1) Re-Branding
2) Price discounting
3) Seeking new markets
What are three social trends impacting on pricing?
1) Lifestyles
2) Buying habits
3) Average disposable income
What are three social trends impacting on promotion?
1) Attitudes toward green or ecological products
2) Influencer marketing
3) User platforms
What is a benefit and drawback of being an ecomerce business
+ No physical shop, more money advertising.
+ More convenient for customer
- No connection with customer/business
- Cost of delivery, hassle with refunds/returns.
How do you calculate market share?
Total sales of company/Total sales of market x100
How do you calculate market growth?
New market size - Old market size
/ Old market size x 100
How do you calculate PED?
% change in quantity demanded/ % change in price
How do you calculate YED?
% change in quantity/ % change in income(Y)
What are the benefits for a company having customer loyalty from their target audience?
+ Improves profits, sales success, allows sustainable growth.
What are two ways competitors can influence a business?
1) Differentiation
2) Customer service
What is competitive pricing strategy?
where the final prices on their products or services have been evaluated against the prices of their competitors
What is Destroyer (predatory) pricing strategy?
strategy used to eliminate competition. It involves a business setting a very low price in order to attract customers away from competitors.
What is a skimming price strategy?
This involves setting a higher price for a new product when it first enters the market. (e.g new iPhone)
What is a penetration price strategy?
When businesses introduce a low price for their new product or service. The initial price forces them to match the offer.
