Business, section 1.1

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What is a market?
A market is any place that brings together anyone who wishes to sell a product/service with anyone looking to buy it.
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What is a mass market?
A mass market is a market which involves and targets a wide range of customers who have varied backgrounds and interests.
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Give 3 examples of a mass market product.
Petrol, mobile phones and jeans.
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What is a niche market?
A market with much smaller target audiences and generally focus on products/services that have been ignored by a big business.
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Give 3 examples of a niche market product.
Fishing equipment, boutique jewellery and bespoke furniture.
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What is meant by market size?
The number of customers in one market who are potential buyers or sellers. For example, the music industry is worth £50 billion (not true)
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What is market share?
The portion of a market controlled by a particular company or product.
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Why can niche businesses often claim a large market share?
Because they may be the only business providing that product/service and therefore there will not be many competitors.
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What is the disadvantage to a niche business?
A niche business will attract fewer customers and therefore fewer sales.
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Why is this in contrast to mass market businesses?
A mass market business has the ability to target a wider range of customers however there will most likely be more competition resulting in a low market share.
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What is a brand?
A type of product manufactured by a particular company under a particular name.
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Why is a brand important to businesses?
Because a strong brand will make the business stand out and can increase customer awareness of their product/service. It may also generate customer loyalty.
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What is a dynamic market?
A market which is constantly changing due to various factors.
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Give an example of a dynamic market.
An example of a dynamic market is the technology and electronic market due to evolving technology and customer demand.
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Give an example in contrast to the previous question.
An example of a market which isn't dynamic would be the items such as eggs and milk
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What factors can effect a market (7)?
Seasonal, consumer tastes, consumer attitudes, government regulations, new tech, competitors, changes in business structure
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What is a trend?
The general direction in which things tend to move.
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Why is it important that businesses review and analyse trends?
Make better decisions, modify forecasts+set realistic targets, Anticipate and deliver to the right people, at the right time+place, Recognise opportunities for innovation+improvement, Develop strategic vision+formulate alternative futures on product.
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How has technology changed how businesses operate?
Reduce costs due to less staff+opening times, wider target audience, more efficient (sell when closed), more convenient for customers, allows customers to view ratings/reviews, however there are more competition.
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What is an integrated marketing process?
A combination of marketing methods and techniques which help a business target potential customers and gain a better understanding of their needs and wants.
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How does this help the business?
Developing appropriate goods and services to customers and gives a business a strong competitive advantages over their rivals.
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What does an integrated marketing approach encourage?
Encourages businesses to be more proactive and flexible with regard to new product development, quality, price, promotion distribution, competitor threats
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What does an integrated marketing approach allow businesses to do?
Offers businesses to be more competitive by providing it with tools to help analyse, understand and satisfy dynamic market environment.
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What does being competitive show about a business?
Shows that they're energetic and effective in all business function areas that add sufficient value to the product or service to make it more desirable to buyers.
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How can businesses increase competitiveness within their market?
Reduce costs, improves quality of product+customer service, promotion, after sales service, warranty, offers, staff training.
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What factors must businesses consider in order to be competitive? (8)
Assess organisational strengths+weakness, Develop strategies for external change in economy, Financial safety, Use new tech, Devise+monitor an integrated HR policy, Know customers, Outsource work externally, Ensure a top quality service/product.
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What is a risk in business?
A risk is something which a business can identify the probability of the outcome and can therefore plan for the risk.
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Give an example of a risk within business.
Purchasing new, expensive, products which have no guarantee of selling.
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What is an uncertainty in business?
An uncertainty is something which a business cannot predict but may prepare for, there is no guarantee it will happen.
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Give an example of an uncertainty?
Setting aside money in case of damages to equipment etc, spare finance for repairs and replacement equipment.
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What is product orientation?
Old traditional approach in which the business tends to concentrate upon the product, its quality and production process without taking into consideration customer needs/wants.
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What are the advantages and disadvantages to product orientation?
+Usually higher quality, +Potentially easier to build a brand, +Save money if successful, -May not be what customers want, -May be more expensive compared to others, -If unsuccessful this will cost the business substantially.
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What is a market orientated product?
Puts the customer at the centre of the businesses decision making process. Focuses on what the customers want.
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What are the advantages and disadvantages to market orientation?
+What the customer wants, +If successful create good reputation+brand, +Can improve upon product, -Must keep up with trends, -More competition, -Uncertainty
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What is market research?
The process in which businesses take to find out what their market/target audience wants/thinks on a subject/product/service.
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What is primary research?
First hand, original research, done by the business which involves gathering information directly from the target audience of potential customers.
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Give some examples of primary research.
Telephone calls, online forms, surveys, polls, interviews, focus groups, questionnaires.
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What are the advantages of primary research?
Finds new info about target market, Relevant+up to date info, Focus on solely target market (not wasting money+time).
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What are the disadvantages of primary research?
Cost time and money, may not get significant results, customers may not answer questions honestly.
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What is secondary research?
The collection of data from other information that already exists.
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Give some examples of secondary research.
Magazines, newspapers, business reports, government departments, internet, business journals, market reports.
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What are the advantages of secondary research?
Cheap and quick, data can be gathered regarding a mass market rather than just a target audience, Allows the business to examine trends
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What are the disadvantages of secondary research?
May not be reliable data, may be out of date or not relevant to the business, available to competitors, may be hard to find if about specific/niche subject.
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What is quantitative research?
When businesses ask closed quesitons, questions which have very little scope for development other than a one word answer. Usually given in numerical form.
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Give some examples of quantitative research questions.
How many hours of tv do you watch per week? How much do you spend a day on food?
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What is qualitative research?
Open questions, questions which are open for interpretation where answers can be short or long. More focused on peoples opinions and feelings.
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Give some examples of qualitative research questions.
What do you think of this product? Do you like our new branding?
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What can market research help businesses identify? (8 main points)
Size of market, state of market (demand is growing or shrinking?), Central elements to market (social, economic etc), Competitors, Publics opinion, Target market, Structure of market, Consumer behaviour
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What are the 8 steps to market research (planning)?
Identify problem, Decide on research method, Determine data type, Design capture form, Location of research+size, Collect data, Analyse+interpret, Produce report.
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What are the overall disadvantages to market research?
Structure (info may be vague+useless), Size (e.g research in Lancaster wont represent UK), Representation (different places may want different things), Bias (interviewer+interviewee, Time+money.
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What type of questions need to be considered when conducting sampling/market research?
Cost? Will it be bias? How long will it take? How much do we have to spend? Is it the best method? Who and where? Can population be divided into groups? What type of product/service is being tested?How closely will itrepresent majority of population?
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What are the risks when conducting market research+sampling?
Was the truth told? Has the right sample been chosen? Been collected without bias? Appropriate questions asked? Target audience+location appropriate? Appropriate sampling technique? Results analysed correctly? Accurate results or fictitious?
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What are the limitations of analysing marketing data?
Sample size too small, may be expensive to collect data, out of date data, inaccurate data, problems with regional differences, data may be taken out of context
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How can ICT be used to help market research?
Can compare databases with government records to see trends (data can be accessed by others), Loyalty cards (show what people buy the most but can be expensive to produce+maintain), Social networks (see customer opinions but not show mass market opin
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What is market segmentation?
A market segment is a group of people who share one or more common characteristics, lumped together for marketing purposes. Marketing professionals approach each segment differently, after fully understanding the needs, lifestyles, demographics etc.
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What is the summary of what market segmentation identifies for businesses?
Helps business accurately target potential customers, recognise competitors, measure performance, anticipate future market trends,.
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How can this help businesses?
Allows the business to pick out the segment of people who are most likely to buy their product/service and target them.
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What does market segmentation do to businesses?
Each segment the businesses wishes to target requires a specific marketing mix and allows the to ensure that any marketing budget is used effectively to produce a high return.
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Whats the difference between differentiated and undifferentiated marketing?
Differentiated marketing focuses on the different needs of customers whereas undifferentiated marketing treats customers needs as all the same (aka mass market)
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What are the four common methods of market segmentation?
Demographic segmentation (age, gender occupation etc), Geographic segmentation (town, country, population growth rate etc), Behavioural segmentation (how customers behave/react towards products), Psychographic segmentation, customers lifestyle+values
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What are the advantages of market segmentation?
Helps business know customers, Focuses business strategy on specific target audience, Encourages business to focus on meeting the needs of a segment, Provides focus for the allocation of business resources.
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What are the disadvantages of market segmentation?
Costs time and money, Could lead to manufacturing too many products, Over-narrow the focus of the business.
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What is market mapping?
A market map takes two features (e.g price, size, speed + quantity) and compares them on two axes. It is a good way to identify businesses and products in a market.
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How can businesses gain an edge over their rivals?
Reliability of products/services, Quality, Price, Key product features, Customer service, Convenience, Infrastructures able to cope with demand, Branding and promotion, Innovation, Marketing and advertising.
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What do companies use product differentiation?
As a way to gain advantage over their competitors.
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What does this involve?
Having their product/service with USPs and then marketing those features to make sure the product stands out from the competition.
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What is the main benefit of product differentiation?
The producer does not have to bring down its prices in order to compete.
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Why do businesses add value to their products/service?
In order to make them more attractive and desirable to the customer.
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What is the equation for added value?
Selling price of product/service - Total cost of producing the product/service
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How can value be added to a product functionally?
Alternative payment methods, Purchasing gift vouchers, Loyalty cards, Discounts/promotions, Warranties, After sales service, Possibility of add ons or upgrades, Price needs to be accurate+appropriate.
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How can value be added to a product aesthetically?
Associate the product or service with well known personalities or businesses. Have good packaging+presentation, Present as a must have item.
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What is a mass market?

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Card 4

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What is a niche market?

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KatieSteele

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Finally some business revision thats relevant to this years course! Ty so much

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