Markets (12)

Question 1

What is a market

Answer 1

A market is a place where buyers and sellers can exchange or transact goods and services.

Question 2

What is competition

Answer 2

The contest between organizations that provide similar products or services or that target the same audience of consumers. Businesses compete to convert and retain customers, increase revenue and gain more market share.

Question 3

What are the types of markets

Answer 3

Niche market
Mass market
Trade market
Consumer market
Seasonal market
Local market
Global market
Product/service market

Question 4

What is a niche market

Answer 4

A niche market is a specialized market segment where you cater for the demand for products/services that are not currently being supplied by the main suppliers

Question 5

What is a mass market

Answer 5

Mass marketing involves a business aiming products at a whole market rather than particular parts of them

Question 6

What is a trade market

Answer 6

Focus on firms, distributors, retailers and wholesalers rather than consumers with the goal of increasing demand with supply chain partners.

Question 7

What is a consumer market

Answer 7

Focuses on consumers, when individuals purchase products or services for their own personal use.

Question 8

What is a seasonal market

Answer 8

the process of marketing products or services during special points of the year.

Question 9

What is a product/service market

Answer 9

Product market is a market where they sell products and service markets is a market where they sell services.

Question 10

What is a local market

Answer 10

Where goods and services are sold locally as firms are setup there (domestic)

Question 11

What is a global market

Answer 11

Global marketing is all about selling
goods or services to overseas markets

Question 12

What is market segmentation

Answer 12

Any subgroup of a larger market, Business’ divide their target markets into segments that have common features/ similar characteristics

Question 13

How are markets segmented

Answer 13

Psychographic segmentation
Demographic segmentation
Geographical segmentation

Question 14

What is Psychographic segmentation

Answer 14

Based on characteristics, needs & wants, age, ethnic background, gender, income and occupation

Question 15

What is demographic segmentation

Answer 15

Based on consumer personality and emotionally based behaviour.

Question 16

What is geographical segmentation

Answer 16

Based on geographic area, climate, population densities.

Question 17

What is the importance/ advantages of market segmentation to firms

Answer 17

Firms gain greater knowledge about its customers

Can identify requirements/Match the needs of different groups more precisely

Can target their advertising therefore maximising it’s efforts

Higher profits

Increase brand loyalty as their needs are being met

Question 18

Types of competition

Answer 18

Competition ranges from:

Perfect competition
Monopolistic competition
Oligopoly competition
Monopoly competition

Question 19

What are the characteristics of perfect competition

Answer 19

Assumes all products are the same (homogenous)

Consumers have perfect knowledge of the market

No barriers to entry

Large number of small firms

Individual firms are price takers no influence of price of good

Example agriculture

Question 20

What the characteristics of monopolistic competition

Answer 20

Products are differentiated from others through branding & marketing mix

Few barriers to entry

Relatively large numbers of small firms compete

Example restaurants

Question 21

What are the characteristics of oligopoly competition

Answer 21

Business tries to differentiate products

Most common type of market

Dominated by small number of large firms

Significant barriers to entry: high startup costs, high advertising

Prices remain stable

Collusion between business to stop new entrants

Example supermarkets

Question 22

What are the characteristics of monopoly competition

Answer 22

Only a single seller of a unique product

No competition the firm is the whole market

High barriers: high costs etc.

Potential abuse of the position

Question 23

Why do consumers need protection from exploitation of firms

Answer 23

Consumers need protection as some organisations resort to unfair tactics in order to increase sales and revenue and reduce costs

Question 24

What do consumers need protection from

Answer 24

Poor quality/unsafe goods - Firms seek to reduce costs this can lead to unsafe products.

substandard services - A substandard service or product is unacceptable because it is below a required standard, firms do this to reduce costs.

misleading information - When advertising some ads can be be misleading and false information

pressurised selling tactics - Some businesses charge a large amount of interest to pressure customers into signing an agreement to purchase goods they don’t want

Question 25

What is demand

Answer 25

demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given time

Question 26

What is supply

Answer 26

supply is the amount of a resource that firms and producers are willing and able to provide to the marketplace or to an individual

Question 27

What is the equalibrium

Answer 27

In a demand and supply diagram is the point when the demand and supply is equal.

Question 28

Why is demand and supply important in markets

Answer 28

Supply and demand have an important relationship because together they determine the prices and quantities of most goods and services available in a given market.

Question 29

What is a competitive market

Answer 29

Competitive market - A competitive market is a market where there are numerous producers that compete with one another to provide goods and services for consumers wants and needs

Question 30

What is the market share

Answer 30

This measures the sales of a firm relative to the market size

Question 31

Equation for market share

Answer 31

Sales of business/Total sales in the market x100

Question 32

Factors of Supply

Answer 32

Productivity Indirect Taxes Number of Firms Technology Subsidies Weather Cost of Production

Question 33

Factors of demand

Answer 33

Structure of Population Advertising Substitutes (price of) Income – general level Fashion and Taste Price level Complements (price of) Expectation of consumer

Question 34

What is the role of an ombudsman service

Answer 34

If a customer has a complaint that in their view has not been satisfactorily dealt with by the business concerned, the next step in finding redress might be the Ombudsman Service.

Question 35

Give the range of competition in order

Answer 35

Perfect - Monopolistic - Oligopoly - monopoly

Question 36

What are the pros & Cons for niche markets to firms

Answer 36

+ Charge higher prices Low competition Promotion costs can stay low - Firms that exploit a niche market often bring along competition. Cannot benefit from economies of scale. Limited profit as of market size

Question 37

Benefits to customer of market segmentation

Answer 37

Receive a product closer to their expectations Make them feel that they are getting there value for money Because marketing is targeted the consumer is aware of new products/ new features

Question 38

Benefits of R&D

Answer 38

Cuts costs and increases productivity Innovates and creates new products Gives the business a competitive edge

Question 39

Drawbacks of R&D

Answer 39

Costs a lot to run R&D Potential risk of failure Resource intensive