mr smith-the market

Question 1

what is demand

Answer 1

quantity of a product that that consumers want to buy within a given amount of time

Question 2

supply

Answer 2

quantity of a product that consumers are willing and able to supply in a given time

Question 3

demand slope

Answer 3

normally goes downwards
shows as a price increases, demand decreases
beacsue at higher price, fewer consumers wanting to spend the money so demand falls

Question 4

supply slope

Answer 4

shows difference in price and quanity supplied
usually slopes upwards the higher the price charged, higher the quanity supplied

Question 5

what is equillbrium price

Answer 5

when amount demanded matches the amount supplied

Question 6

what happens to the slopes during a surplus

Answer 6

surplus-where prices are increased
cause movement to right across supply curve and movement to left across demand curve

Question 7

what happens to sopes during a shortage

Answer 7

demand cruve goes to right
supply cruve goes to left

Question 8

factors which influence demand
SAC

Answer 8

substitutes-demand for a praticualr product tyoe can eb affected by chnage in price of subsitute
e.g amount for butter rises, demand for margarine will rise
adveristing and branding-increases demand as encourage existing consumers to stay loyal
complemetatiry goods-products which worjk together e,g printer and ink cartilages
e.g if demand for printers falls, so could ink cartilaidges
consumers prefernces-relies on what consumers want. e.g increase in diets, decrease demand for sugary drinks
incomes-higher income increase demand for expensive products, lower income decreases demand for expensive products

Question 9

relationship between demand and price

Answer 9

as price increases, demand will fall
as price decreases, demand will rise

Question 10

facts affecting supply
NIC

Answer 10

New tchnology
Indirect taxes
C

Question 11

price elasticity of demand

Answer 11

how much the price change affects rhe demand

Question 12

calcualtion of price elasticity of demand
PED

Answer 12

percentage chnage of qunaity demanded
divided by percenatge chnage in price

Question 13

price elastic

Answer 13

if price elasticty of demand is greter then 1, product is price elastic

Question 14

price inelastic

Answer 14

if price elsaticity of demand is lower then 1, productis price inelastic

Question 15

price elasticity of demand depends on several factors

Answer 15

nessary products-e.g milk are price ine;astic
chnaging price does not affect price much

Question 16

what is distribution

Answer 16

route a product takes from manfacturer or producer to consumer
usally passes through an intermediaries e.g ratins, wholesalers

Question 17

retailers

Answer 17

shops who sell to consumers
final stage of distribution channel e.g asda, aldi

Question 18

wholesalers

Answer 18

make life easier for retailers
buys goods from manufactureres in bulk
sells them in samller quantities to retailers
called breaking bulk
do not have to wait for customers to buy product before getting cash like retailers
make distribution simplier
without wholesaler, manufacturer would have to make seperate deliveries to retailers
selling to whoelsaler cuts down number of journeys
wholsalers act asstorage cupboads for retailers
can store more goods than a retailer can

Question 19

agents

Answer 19

e.g travel agents
sell products to cuncometers on behalf of businesses

Question 20

different channels of distribution

Answer 20

direct selling-manufacturer to consumer
e.g internet, buying and selling on internet is ecommerence
can also be done by door to door selling

indirect selling(three stage channel)-manufacturer to retailer to consumer
often for clothes in high streets

indirect selling (four stage channel)-manufacturer-wholesaler-retailer-consumer
used for groceries

Question 21

what is a munlti channel distribution

Answer 21

business sell through more than one method e.g online and in store

Question 22

online distribution

Answer 22

steaming or downloading media content via the internet
consumer able to pirchase and have right to download rather then buying a ohsycial product

Question 23

advantages of online retailing

Answer 23

lower costs for boxing items
persson gets product immediately /doesnt have to wait for product to come
moreenviormentally friendsly
reduces pollution from transporting pshycial goods
can be run from anywhere
easy to set up

Question 24

Dis of online retailing

Answer 24

need different set of skills IT training required

Question 25

what is a product life cycle

Answer 25

shows sales of a product over time valuable for planning ,marketing strategies

Question 26

developemnt stage of product life cycle

Answer 26

research and devlopment department develop product marketing department do research costs high, arent any sales yet to cover costs high failure rate

Question 27

introduction stage of product life cycle

Answer 27

where product is launched somtimes launched with complementiry products promotion high to get sales price skimming may be used so that initial costs cover promotional costs may start low to encorugae sales-penetration pricing have to pay for fixed cost of development before can make profit not many outlets for new product-business work hard to get retailers to sel it competion may be limited (innovative product)

Question 28

growth stage of product life cycle

Answer 28

sales grow fast new customers and repeat customers ciompetitors may be attracted to market products often improved or developed and maybe trgeted at new target makets

Question 29

maturity stage of product life cycle

Answer 29

sales reach a peak saturation (market full and has reached full growth) sales may begin to drop sales more liekly to drop for products which are long-lasting and customers are not liely to switch

Question 30

decline stage of product life cycle

Answer 30

product does not appeal anymore sales fall rapidly profitsdedcrease if sales carry on falling, product may be withdrwan or sold to another business

Question 31

what are extension strategies

Answer 31

strategies that improve sales of a product which are starting to decline e.g product development dredisgning product e.g chnaging packaging to make it mre up to date or can change way it promotes the product e,g ad campaign or special offers

Question 32

boston matrix

Answer 32

compares market gworth with market share each circle represents on eproduct size of circel represent sale volume of product

Question 33

what does the boston matrix consist of

Answer 33

question marks cash cows stars dogs

Question 34

quesion marks

Answer 34

all new products small market share high market growth arent profitable yet, could succeed, could fail need heay marking to give them a chance

Question 35

cash cows

Answer 35

low market grwth but high market share there in maturity phase already been promoted bring in plenty of money

Question 36

stars

Answer 36

high market growht and high market share in growth phase and have most potential however, competiors liekly to take advanatge so need good mrketing

Question 37

dogs

Answer 37

low market share and low makret growth pretty much a lost no growth may vene be sold off in end

Question 38

adv of boston matrix

Answer 38

way of showing where businesses postioned withing a makret

Question 39

what is a business to business marketing strategy

Answer 39

where a busienss sells to another businenss somethig of theirs e.g givig hosptial new gloves

Question 40

bsuiness to consumer makring strategy

Answer 40

sellign of a business product to consumer e.g ready meals to shoppers in supermarkets

Question 41

customer loyalty

Answer 41

having good customer service, lead to good relaitonships with customers meanign repeated purchases salespeaople should make customerrs feel happy impornt for large products e.g car house need info and imporrant on functionality before buying it

Question 42

ways of keeping customers loyalty

Answer 42

loyalty cards for repeated puracases e.g starbucks collect points fo ecah visot saver schemes-customers collect points basd on how mmuch they sppedn e.f TESCOS CLUBCARD

Question 43

what doesz it mean when it says cutomers are an asset to a business

Answer 43

means they have value to a business

Question 44

product life cycyle stages

Answer 44

development intorduction growth maturity decline

Question 45

devlopment stage of product life cycyle