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A Level Business > 1.1, 1.2 & 1.3 > Flashcards

1.1, 1.2 & 1.3 Flashcards

1
Q

What is niche marketing

A

When a business targets a smaller segment of a larger market where customers have specific needs and wants eg airplane seats

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2
Q

What is mass marketing

A

Where a business sells into the largest part of a market where there are many competitors selling a similar/generic product

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3
Q

What are the features of a mass market

A
  • customer needs/wants are more general/less specific
  • selling high volumes of products
  • High competition so competitive price needed
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4
Q

What are the advantages of mass marketing

A
  • economies of scale (lower unit costs)
  • lower risk
  • high sales revenue
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5
Q

What are advantages of niche marketing

A
  • low volumes of premium price products so high profit margins
  • lower competition
  • more loyal customers
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6
Q

What are drawbacks of niche marketing

A
  • lack of economies of scale
  • vulnerable to market changes
  • likely to attract competition if successful
  • businesses will have to compete on quality
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7
Q

What are the two ways of measuring market size

A

Value - total amount customers spend on a product
Volume - units/quantities sold

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8
Q

What’s the formula for market share

A

Business sales/total market sales x 100

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9
Q

What causes changes in a dynamic market

A
  • customer tastes/trends
  • new market entrants
  • technology
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10
Q

How can a business adapt to change with dynamic markets

A
  • innovation
  • carry out more market research to have a better understanding of customer wants and needs
  • continuous improvement
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11
Q

What are some ways high competition effects the customers

A
  • lots of choice/variety in products
  • low prices
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12
Q

What is competitive advantage

A
  • adding value to gain an advantage
    Eg offering better quality or service
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13
Q

What is the difference between risk and uncertainty

A

Risk - the possibility that things will go wrong eg money could be lost. Can be assessed/managed

Uncertainty- unpredictable and uncontrollable external factors that can affect a business

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14
Q

What’s difference between primary and secondary Market research

A

P- new data collected first hand
S- old data that already exists

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15
Q

What’s 2 benefits and 2 drawbacks for primary market research

A

+ more specific to business needs and more detailed data
+ more up to date and reliable
- can be expensive and time consuming and have bias
- difficult to conduct a large sample size

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16
Q

What’s 2 benefits and 2 drawbacks for secondary market research

A

+ free and easy to access
+ less time consuming
- can be out of date
- not tailored to specific needs

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17
Q

What is market orientation

A

Creating a product based on the needs and wants of the customers in the market

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18
Q

What’s product orientation

A
  • focusing on the product itself eg profit margins and efficient production
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19
Q

What’s the design mix

A

Functions
Cost
Aesthetic

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20
Q

What are some pricing strategies for existing products

A

Competitive - similar to market level price
Cost plus pricing - add a % mark up to the price for a guaranteed profit
Psychological - eg £3.99 instead of £4
Predatory - price set deliberately very low to drive other competitors out

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21
Q

What are some pricing strategies for new products

A

Price skimming - price high at the start and then drops later on. eg new iphone

Penetration pricing - price the same as market level or just below

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22
Q

What’s the the stages of the product lifestyle

A
  1. Intro/R&D
  2. Growth
  3. Maturity
  4. Decline
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23
Q

At what point in the product lifecycle is an extension strategy needed

A

After maturity before the product starts to decline

24
Q

What’s the Star in the Boston matrix

A

High market share in a high growth market

  • one to watch as it may become a huge success
25
Q

What’s the question mark in the Boston matrix

A

Low market share in a high growth market

  • have potential to become a success and turn into stars but require a lot of investment eg advertising so high cost. could turn into dogs if they fail
26
Q

What’s the cash cow in the Boston matrix

A

High market share in a low growth market
- a product that a business can rely on to always be making money consistently
- not that much advertising required. Only enough to keep it relevant and known to customers

27
Q

What’s the dog in the Boston matrix

A

Low market share in a low growth market
- unsuccessful products that are not making a profit. business will want to get rid of dogs as there’s no point investing in it anymore
+ will require less marketing

28
Q

What are the two ways a business can market B2B and B2C

A

B2B- a business selling to another business. few customers, focus on reducing costs & increasing productivity

B2C- a business selling to customers.

29
Q

What are the 4P’s

A

Product
Price
Place (DISTRIBUTION - eg channels)
Promotion

30
Q

What’s the formula for % mark up on a item

A

Profit per item/cost per item x 100

31
Q

What are the disadvantages of mass marketing

A
  • low profit margins
  • requires production on a large scale so lots of capital needed
32
Q

What are some ways high competition effects businesses in a market

A
  • competitive pricing
  • innovation to stand out
33
Q

Why is market orientation needed to survive in a competitive market

A
  • needs of customers are met better than rivals
34
Q

What are benefits/uses of market research

A
  • product development
  • develop marketing strategies
35
Q

What is market segmentation

A

Dividing customers into groups based on certain characteristics to allow a business to target their specific needs

36
Q

What are benefits of market segmentation

A
  • target customers through relevant advertising
  • differentiate from competitors
37
Q

What are benefits of market mapping

A
  • allows businesses to determine a “gap in the market”
  • useful in gaining understanding about customer wants and needs
38
Q

What are the ways of achieving competitive advantage

A
  • innovation
  • good brand reputation
39
Q

What are the two ways of promotion

A

Above the line (ADVERTISING) - eg internet, TV, newspapers, billboards

Below the line (anything that is not advertising) coupons, loyalty cards, sponsorship)

40
Q

What can influence how a business chooses to promote its products?

A
  • target market
  • technology
41
Q

What are ways a business can build a brand?

A
  • USP/differentiation
  • advertising
  • sponsorship
  • social media
42
Q

What is emotional branding?

A

When a business associates their brand with emotional connections, e.g. sports teams or good causes

43
Q

What factors determine what is the most appropriate pricing strategy for a business?

A
  • Level of competition
  • stage in the product life-cycle
  • price elasticity of demand
44
Q

What are some distribution channels?

A

Retailers - eg zara
wholesalers - Costco
direct selling - websites

45
Q

What are some extension strategies to extend the product life cycle?

A
  • Modifications to the design or packaging to make it appear new
  • cutting prices
46
Q

What are benefits of product orientation?

A

Reduces the need for a business to carry out market research

47
Q

What are the benefits of the cost plus pricing strategy

A
  • protects the profit margins of a business
  • easy to estimate profit levels
48
Q

What are the drawbacks of the cost plus pricing strategy

A

It does not take into account the prices of competitors in the market

49
Q

What are benefits of price skimming strategy?

A
  • a high starting price can establish a luxury brand image
  • It can attract early buyers who want the latest product
50
Q

What are drawbacks of the price skimming strategy

A
  • High risk as customers may put off from buying due to the initial high price
51
Q

What are drawbacks of competitive pricing?

A

small businesses may face problems in profit margins as they cannot get economies of scale

52
Q

What are benefits of penetration pricing strategy?

A

Low prices will gain the business more market share immediately and attract customers

53
Q

What are drawbacks of penetration pricing strategy?

A

Reduced revenue due to lower prices

54
Q

What are benefits of B2C marketing?

A
  • it can allow businesses to directly appeal to customers eg using emotional branding
  • potential profit margins for selling B2C are higher because there are fewer intermediaries between producer and consumer taking share of the profits
55
Q

What are drawbacks of B2C marketing?

A

Less profitable in the short term due to the need to set up distribution networks to get the products to customers

56
Q

What are the benefits of having good distribution networks?

A
  • gives customers choice about who they want to buy from
  • Allows businesses to use a range of channels to compete with competitors eg expanding online distribution

A Level Business (15 decks)

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