The Market

Question 1

What is the market?

Answer 1

a market is any place that buyers and sellers will come together to exchange goods or services. There will normally be an exchange of money at a set price

Question 2

What is marketing?

Answer 2

The department tasked with targeting the right product for the right target market using the 4p’s.

Question 3

What is a mass market?

Answer 3

The attempt to create products or services which is targeted at the whole market

Question 4

What is a niche market?

Answer 4

The attempt to create products or services which is targeted towards a specific segment of the market

Question 5

What are characteristics of a mass market?

Answer 5

People = lots of hierarchy, tall, decentralised,
Product = simple, easily accessible
Promotion = large scale, endorsements
Price = low price cheap
Production = large scale, global distribution, E.O.S

Question 6

What are characteristics of a niche market?

Answer 6

People = less people, specialised, skilled
Product= tailored, valuable, intricate, specific
Promotion = small scale
Price = high premium price, specific to targeted market
Production = lower output, high quality, high costs, slow

Question 7

What are positives and negatives of a mass market?

Answer 7

+ wider range, lower costs, E.O.S, less risk, revenues recognition, footfall
- competition, quality, costly promotion, not flexible,

Question 8

What are positives and negatives of a niche market?

Answer 8

+ targeted, less competition, high quality, better brand image
- less E.O.S, risky, higher costs, requires skills, difficult to uphold production

Question 9

What is the market size?

Answer 9

total value or volume of sales in the market (£)

-> units sold x price

Question 10

What is market share?

Answer 10

the proportion of total market sales that a firm has.

-> (sales of 1 firm / total market sales) x 100

Question 11

How could a business increase market share/gain share?

Answer 11

economy fluctuations, marketing flows, competitors actions, economic landscape.

Question 12

What is a dynamic market?

Answer 12

A market that is constantly, sellers respond to the changing needs of buyers by improving products.

Question 13

Why do markets change?

Answer 13

social trends
technological changes
competition
consumer tastes

Question 14

Why do business have to adapt?

Answer 14

otherwise they will lose competitiveness

Question 15

What is a stable market?

Answer 15

The pace of change is slow with constant market size and shares that has little innovation with little price variation.

Question 16

What is online retailing?

Answer 16

process of buying and selling goods and services over the internet also known as e-commerce

Question 17

What is a long tail?

Answer 17

The idea that the internet has increased customer choice which has increased the importance of niche products due to increased accessibility.

Question 18

what has online retailed allowed?

Answer 18

24/7
convenience
choice
product variation
price transparency
global market
pure play businesses
competition - innovation
faster growth

Question 19

What are the negatives of online retailing?

Answer 19

not for everyone
stigma
increased risk of fraud
reduced prices
IT specialists

Question 20

What is a digital economy?

Answer 20

an economy built on technologies by the internet

Question 21

What are the three areas of a digital economy?

Answer 21

supporting infrastructure
e-business
e-commerce

Question 22

What is a brand?

Answer 22

A product produced by one business using a specific name creating a unique identity.

Question 23

What can branding allow a business to do?

Answer 23

Charge a higher price due to brand loyalty

Question 24

What are positives of building a brand?

Answer 24

• help build loyalty, added value
• brand extension allows a business to add to a product range with new products
• brand personality
• increased market share and sales

Question 25

What are disadvantages of building a brand?

Answer 25

• higher promotion costs
• constant promotion
• bad events may affect products
• needs to be protected worldwide

Question 26

How does a business affect a market?

Answer 26

Prices charged
Buying power of customer
Selling power of supplier
Availability of substitutes
Rivalries to innovation

Question 27

What is the degree of competition?

Answer 27

Number of firms that exist within a market

Question 28

What is a monopoly?

Answer 28

She one firm dominates the industry

Question 29

What is a oligopoly?

Answer 29

When 3 or more businesses are competing in a market.

Question 30

How does a business adapt to changes in the market?

Answer 30

Offensive status
Defensive status
Mixture of both

Question 31

What does it mean when a business is being offensive to change?

Answer 31

Trying to increase sales or develop new markets

Question 32

What does it mean when a business is being defensive to change in a market?

Answer 32

When a business reacts to the competition and try to maintain their market.

Question 33

What is product innovation?

Answer 33

New technology creating new products

Question 34

What is the process of innovation?

Answer 34

New technology to improve everything but products ie distribution, stock, supply chains

Question 35

What is market growth calculated by?

Answer 35

(Change in size of market/original size) x 100