Marketing 1

Question 1

Mass Market ADVANTAGES

Answer 1

-Large customer base
-High revenues
-Barriers to entry-Factors that can prevent or impede newcomers into a market or industry sector
-Strong Brand Awareness
-Brand loyalty

Question 2

Mass Market DISADVANTAGES

Answer 2

-High fixed capital costs (machinery,factories)
-Lots of competition
-Harder to add value (charge a higher price) as standardised products-all the products are the same

Question 3

Niche Market ADVANTAGES + DISADVANTAGES

Answer 3

ADV:
-Less competition
-React to changes in the market
-Charge a higher price
DIS ADV:
-Smaller Market =Less Sales

Question 4

What is market size ?

Answer 4

Measured by sales volume (measures the number of items sold ) or sales value (measures the financial worth of the items)

Question 5

What is Market Share ?

Answer 5

The proportion or percentage of total sales of product or service achieved by a firm or a specific brand of a product.

Question 6

Market Share Calculation

Answer 6

Sales of one product/brand/company/total shares in the market X100

Question 7

Benefits of Branding

Answer 7

-Increased demand
-Increased price
-Reduced competition
-Protection against downturns (recessions)

Question 8

What is a dynamic market?

Answer 8

A market which is subject to continual and rapid change

Question 9

What causes a market to grow ?

Answer 9

Social changes(consumer preferences,trends/fashion,identity)
Demographic changes(immigration-diverse culture,ageing population)
Innovation(create new wants + needs, new ideas)
Changes in legislation (environmental- growth in green energy, sugar tax)
Economic growth(gross domestic products , consumer demands)

Question 10

How to businesses adapt to change?

Answer 10

Flexibility -adapt to changing customer needs
-Staff(multi skilled/flexible contracts)
Market trends-primary + secondary
Investment -researcher + development
Continuous improvement
Develop a niche- unique selling point

Question 11

How does competition affect the market?

Answer 11

-Encourage customers to buy product/service (branding , advertisements)
-Lowering price/create a unique selling point
-Better quality products
-Promotions
-High quality customer service

Question 12

Difference between risk and uncertainty

Answer 12

A risk is where owners take action/make decisions where the outcome is unknown where as uncertainty is an external influence impacts a businesses success .

Question 13

Risk examples

Answer 13

Financial risk
Financial loss
Lack of security
Business failure

Question 14

Uncertainty examples

Answer 14

External influences
Inflation,interest rates,tax
Legislation
Natural disasters

Question 15

Advantages to online retailing

Answer 15

Accessibility
Later target market
Convenience
Lower costs
Easier to gather personal information from customers
Affords greater flexibility
Global market

Question 16

Different areas in market segmentation

Answer 16

Demographic segments-Age,Gender,Income,Social class,Ethnicity,Religion
Geographic segments-Residence(region,country)
Psychographic Segments-Attitudes,Opinion,Lifestyles
Behavioural segments-Usage rates, Loyalty