EDEXCEL A-LEVEL BUSINESS THEME 1 FULL

1.1

Market - where buyers and sellers come together

Marketing - techniques that sellers undertake

 

NICHE; small market with specific needs

  • Charge premium prices

  • Avoid competition

  • NOT spreading risk

  • Larger firms can easily overrun

 

MASS; produce in large quantities to mass

  • Lower unit cost allowing economies of scale to be exploited

  • Higher profit margins

  • High advertising costs

  • Fierce competition

 

Market size - value/volume. Calculated by total sales of business, fluctuate

Market share - sales/total sales X 100. Market leader influence strategy of others and objectives

Brand - distinguish, differentiate, create image. Beneficial in mass market to be able to charge premium prices

 

ONLINE RETAILING

Consumer

  • Global fashion

  • 24/7 (USP)

  • Distance is no object

  • Delivery cost

  • Allientae markets, elderly

  • Quality

Business

  • Save costs

  • Global market

  • Gather consumer info, be able to use direct marketing

  • Website crashes, cause huge losses

  • Cannot tap into certain markets

 

Markets change because of:

  1. SIZE, grow or shrink affected by PLC

  2. NATURE, product/service providing, consumer perceptions and trends

  3. NEW, develop with technology

 

How businesses can adopt to change:

  • Develop a niche

  • Continuous improvement

  • Investment

  • Market research

  • Flexibility

 

COMPETITION

Business

  • Under pressure to get customers and can adopt methods such as

  • Lower prices, better quality, advertise and promote, offer extras adding value

  • Reduce profit potential

  • Make barriers into market

Consumer

  • Choice, in absence of competition consumers may be exploited

 

Risk - action taken by business and outcome unknown

Uncertainty - external influences beyond control

 

Product orientation - focuses on production process, products design, quality and performance

Market orientation - continuously identifies, reviews and analyses consumer needs. More engaged with effective marketing

  • Respond quickly to change

  • Confident in product launch

  • Anticipate change from research/trends

  • Meet and compete with rivals

Influences of market orientation..

  • Nature of product

  • Policy decisions

  • Views of those in control

  • Nature and size of market

  • Degree of competition

 

THREE purposes of market research:

  1. Identify and indicate customer wants and needs

  2. Quantify likely demand

  3. Insight into consumer behaviour

 

DATABASE - stores client info, easily searched and found facility

SOCIAL NETWORKING - global reach, cheap and analyses trends

WEBSITE - surveys, cheap and available 24/7

 

QUALITATIVE RESEARCH - attitudes, beliefs and intentions

QUANTITATIVE RESEARCH - measured and satisticalised

PRIMARY RESEARCH

  • Questionnaires

  • Posta surveys

  • Focus group

  • Test marketing

 

SECONDARY RESEARCH

  • Internal data

  • External data

 

SEGMENTATION

Geographic

  • Different needs depending on where they live and different wants culturally

Demographic

  • Age, gender, income, social class, ethnicity, religion

Psychographic

  • Attitudes, opinions and lifestyle, difficult to collect data type

Behavioural

  • Loyalty or impulse

 

BENEFITS

  • Meet specific needs

  • Increase revenue

  • Avoid wasting resources

  • Gain loyalty

 

Market positioning - conceptions consumers hold can use, benefits of products, USP, attributes of product, origin or classification

Market map - two dimensional, helpful for individual brands not corporate. Can only compare two features

 

Competitive advantage

  • Design - differentiation

  • Quality - premium price

  • Promotion - personalise advertisement

  • Customer service - exceed and deliver encouraging sales

  • Ethical stance - segment

 

Differentiation;

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