Edexcel- The Market 1.1

Question 1

Sales volume

Answer 1

Number of units sold

Question 2

Sales value

Answer 2

Revenue generated from products

Question 3

Market size

Answer 3

Sales over a period of time

Question 4

Market share

Answer 4

Proportion of total market

Question 5

Market share formula

Answer 5

Sales business/ total market shares x 100

Question 6

Brand

Answer 6

Value and experience customer has with a product or service

Question 7

Brand loyalty

Answer 7

Product or service which will get repeat business

Question 8

Brand loyalty benefits

Answer 8

Customer loyalty
Business can charge higher prices
Retailers will want to stock brands

Question 9

Mass markets pros

Answer 9

Large sales so high revenue
Economies of scale
Everyone can be equally targeted

Question 10

Mass market cons

Answer 10

Lots of competition
Products need to be differentiated
Lower profit margins

Question 11

Niche market pros

Answer 11

Charge premium prices
Easier to target consumers
Less competition

Question 12

Niche market cons

Answer 12

Demand is not constant
No economies of scale
Difficult to target audiences as smaller

Question 13

Dynamic markets

Answer 13

Markets which are constantly changing

Question 14

Why do dynamic markets change

Answer 14

Online retailing
How markets change
Innovation and market growth

Question 15

Innovation

Answer 15

Putting a new idea into action

Question 16

Product innovation

Answer 16

Launching new products

Question 17

Process innovation

Answer 17

Finding better and efficient ways of producing existing products

Question 18

Benefits of product innovation

Answer 18

Added value
Build early customer loyalty
Enhanced reputation

Question 19

Benefits of process innovation

Answer 19

Reduced costs
Improved quality
Higher profits

Question 20

How competition affects market

Answer 20

Battle for market share
Pricing
Battle for competitive advantage

Question 21

Competitive advantage

Answer 21

Business has advantages over competitors

Question 22

Risk

Answer 22

Possibility things will go wrong

Question 23

Unpredictable

Answer 23

Uncontrollable events that affect business

Question 24

Online retailing

Answer 24

Selling products via the internet

Question 25

Advantages to online retailing

Answer 25

Provides businesses access to more consumers Cheaper to run as lower fixed and variable costs Consumers can shop at times that suit them

Question 26

Disadvantages to online retailing

Answer 26

High costs for website development, maintenance and promotion More competitors Difficult to provide good customer service

Question 27

How may markets change?

Answer 27

Changing consumer tastes and preferences Changing demographics Changing legislation

Question 28

Market growth

Answer 28

Measurement of change in entire market expressed as percentage of original size

Question 29

Adapting to change

Answer 29

Create flexible business structures Meet customer needs Invest in staff training

Question 30

Why competition positively affects competitiors?

Answer 30

Businesses offer lower prices Businesses provide better quality products Businesses provide better customer service

Question 31

How is the absence of competitors negative?

Answer 31

Reduce incentives for businesses to innovate May have to offer higher prices to consumers

Question 32

Example of a risk

Answer 32

Currency fluctuations

Question 33

Example of an uncertainty

Answer 33

Interest rates