an answer greater than 1. demand changes as price changes. the higher the number the more elastic it is and the more the demand will change as the price does. remember it as an elastic band, it can move more.
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what does it mean if a product is inelastic?
an answer less than 1. demand is relatively unresponsive to a change in price. the smaller the decimal, the more in elastic it is.
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what factors impact a price change?
competitors,cost of production, market conditions, state of economy, business location, brand image, product quantity and price elasticity of demand( e.g.are people going to still buy the product if we increase the prices).
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what is market mapping?
it is a technique that anyalses markets by looking at the key fetures that distiguish differn prodcuts or brands. this may include price,quality,product usage or the target audicne.
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why is marketing mapping useful?
it identities possible gaps in the market in relation to rivals.
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if brand a has sales of £120,000, this represents 20% off the market. what is the size of the whole market?
100%= £600,000
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in a new market, brand x sales are 40,000 and this represents 8% of the market. what is the size of the whole market?
40,000/8= 5000
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if the market is worth 4 million and company c has a 2% market share,what is the value of the total shares?
4000000/100=40,000(this is 1%) then 40,000 x 2= 80,000
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what is the PED if the change in demand is 5% and the change in price is -7%
5/-7=0.7%. this means that the product is inelastic.
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what factors influence your choice of what you buy?
how much money you have,whether you already have it or not,how much it is.
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factors that determine your choice of sports car...
whether you can afford it(although this is less significant for the target audience), if it looks nice,practically, brand.
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factors that determine your choice of jeans...
wether they fit, brand,colour,price,if you have enough(or any),trends and fashions,style,quality,comfort and practicality.
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Other cards in this set
Card 2
Front
what does it mean if a product is inelastic?
Back
an answer less than 1. demand is relatively unresponsive to a change in price. the smaller the decimal, the more in elastic it is.
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