Unit 11 - The Marketing Environment

A2 AQA Applied Business Key terms. P100-146 Collins texbook Marketing environment. 

  • Created by: Mitesh
  • Created on: 14-01-13 18:04
The Marketing Environment
is the range of forces, outside the direct control of a business, which will affect the buyer behaviour and competition within markets. These include economic, technological, legal and regulatory, and social and ethical forces.
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Economic Forces
are changes in the economic variables, such as taxation, which alter consumer' spending and/or alter the prices set by businesses for their products. For example, an increase in the VAT would increase the price of, and reduce the demand
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Technological forces
are developments in technology that alter the businesses produce and sell products e.g. internet tech has made it easier to sell products to consumers directly.
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Legal and regulatory forces
are laws or government regulations that constrain business practices e.g consumer protection legislation and the was businesses can promote their products.
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Social and Ethical forces
Arise from the attitudes generally held by society, or sections of society e.g changing public attitudes to the environmentare forcing businesses to be eco friendly.
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Markets
where buyers and sellers come together to decide on price and quantity bought and sold. Not always physical
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Monopoly
Is a market with one seller or one with more than 25% of market share will have monopoly power
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Oligopoly
is a merket which is dominated by a few businesses
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Perfect Competition
occurs in market in which there are many businesses relative to the size of the market, all businesses sell the same product with some differentiation present.
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Monopolistic Competition
occurs in a market where there are many businesses relative to the size of the market but in which products are differentiated. Many corner shops sell similar products but they are differentiated by their locations.
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Customer Loyalty
is the tendancy for customers to make repeat purchases of products that they are familiar with and trust.
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Barriers to entry
are the factors that make it difficult for new businesses to enter a market e.g high initial outlay for buildings and equipment.
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National Income
is a measure of the value of goods and services provided by an nation per annum.
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Economic Growth
is a measure of the increase in a nation's national income (usually 2%)
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Unemployment levels
The number of people out of work and actively seeking employment
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Interest rate
Is the financial institution which receives from lending money to a borrower. The interest rate can be used to calculate the cost of the loan to the borrower.
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Fiscal Policy
is a statement which shows how a government will finance its spending through taxes, usually a mis of income or indirect e.g VAT
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Exchange rates
specifies the value of one nations currency in terms of another currency also referred to as foreign exchange rates e.g £1 = $1.50
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Barriers to trade
are any monetary or non monetary action which makes trade between nations more difficult e.g a government may place a limit on the number of imports.
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Office of fair trading
UK government body that seeks to protect the consumer from anticompetitive practices. It can impose significant fines on businesses that are found to be harming consumer intrests though anti-competitive practices such as restricting supply or fixing
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Competition Commission
an independent body responsible for investigating mergers, market shares and condition and the regulations of businesses in the UK.
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Advertising standards agency
is an independent body responsible for regulating broadcast and non broadcast advertising in the UK
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Ethical values
are sets of beliefs that define what society, or a group within that society, considers as acceptable behaviour.
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Rate of Change
measure of how rapidly a variable is changing, calculated as a percentage
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Mean
dividing the sum of the values by the number of values e.g 3;3;10;12;18 = 49, 49/5 = 9.8
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Median
Middle value of a data set within a data set e.g. 3;6;10;12;18 = 10 middle
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Mode
most frequently occurring in a data set.
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Index Numbers
indicates change in a time series of data. The current value of a variable (such as prices) is compared with its value at some specified time in the past.
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Line of best fit
is the line which best represents the apparent relationship between two variables when values for both are plotted as a scatter graph
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Segmentation strategies
involves dividing markets into seperate grops of customers
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Competitive position Strategies
are approaches taken by businesses operating within competitive markets e.e market followers yield to the dominance of the market leader
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Integrated growth strategies
are ways in which a business expands through acquiring other businesses
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Ansoffs competitive strategies
describes how a business can increase sales through developing its products and/or its markets
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Market penetration
The activity or fact of increasing the market share of an existing product, or promoting a new product, through strategies such as bundling, advertising, lower prices, or volume discounts.
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Product Development
The creation of products with new or different characteristics that offer new or additional benefits to the customer. Product development may involve modification of an existing product or its presentation, or formulation of an new product.
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Market Development
The expansion of the total market for a product or company by (1) entering new segments of the market, (2) converting nonusers into users, and/or (3) increasing usage per user.
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Diversification
a firm enters an industry or market different from its core business. Reasons for diversification include (1) reducing risk of relying on only one or few income sources, (2) avoiding cyclical or seasonal fluctuations by producing goods or services.
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Other cards in this set

Card 2

Front

Economic Forces

Back

are changes in the economic variables, such as taxation, which alter consumer' spending and/or alter the prices set by businesses for their products. For example, an increase in the VAT would increase the price of, and reduce the demand

Card 3

Front

Technological forces

Back

Preview of the front of card 3

Card 4

Front

Legal and regulatory forces

Back

Preview of the front of card 4

Card 5

Front

Social and Ethical forces

Back

Preview of the front of card 5
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