Theme 1 - 1.1 The market

Question 1

What is a dynamic market ?

Answer 1

A market that is constantly changing to meet customers wants and needs.

Question 2

What is market share ?

Answer 2

The percentage of a market that a business has.

Question 3

What is market size ?

Answer 3

Measured by volume of sales in a market or the value of the total market.

Question 3

What is a niche market ?

Answer 3

A product or service designed to meet specific customers wants and needs. (it is a subset of a mass market).

Question 4

What is a mass market ?

Answer 4

A product or service that is sold or advertised to everyone in the same way at the same time.

Question 5

What is a market segment ?

Answer 5

A specific part of the market based on demographics, e.g age.

Question 6

Whats a target market ?

Answer 6

An identified part of the market for marketing focus.

Question 7

What is marketing/market strategy ?

Answer 7

targeting the right product at the right target market, using the right combination of price, place and promotion.

Question 8

What is short termism ?

Answer 8

When a business focuses on boosting profit in the short run but not necessarily in the long run.

Question 9

What is the marketing mix ?

Answer 9

A combination of price, promotion, place and product.

Question 10

What is product differentiation ?

Answer 10

A way producers change their product in order to make it more appealing to consumers.

Question 11

What is a franchise ?

Answer 11

Buying a known successful business process in order to operate.

Question 12

What are the the advantages of a mass market ?

Answer 12

• Large scale production allows for economies of scale.
• Large volumes of sales mean high revenues, that can be pumped into research and development.

Question 13

What are the disadvantages of a mass market ?

Answer 13

• Lots of competition.
• homogeneous products need to be differentiated through marketing, which is expensive.
• High volume production not flexible to changes in demand.

Question 14

What are the advantages of a niche market ?

Answer 14

• they can charge premium prices.
• small scale production can is flexible to follow trends.
• less competition.

Question 15

What are the disadvantages of a niche market ?

Answer 15

• higher unit costs as there are no economies of scale.
• very risky as demand may not be constant.

Question 16

What is market share ?

Answer 16

The percentage of a market that is taken by a business.

Question 17

What is branding ?

Answer 17

The promotion of a particular product or service by means of advertising and distinctive design.

Question 18

What are the advantages to online retailing ?

Answer 18

• shop open all day round.
• orders can be taken automatically.
• shops can reach international markets easily.
• low overheads as there is no need for a premise
• stock can easily be updated to meet dynamic market

Question 19

What are the disadvantages to online retailing ?

Answer 19

• issues with sending goods back may put customers off.
• highly competitive.
• security problems may put off customers.

Question 20

How do competitive markets benefit the consumer ?

Answer 20

• firms need to be very efficient
• firms must compete on non price factors in the homogeneous market, therefore consumers benefit.
• firms must produce more quality goods.

Question 21

What is risk ?

Answer 21

When potential outcomes of a decision are known.

Question 22

What is uncertainty ?

Answer 22

When none of the outcomes are known.