Market

• What is the definition of a market?

  A market is the buyers and sellers that trade a particular type of product.
• What are the two types of markets businesses can target?

  Businesses can target mass markets and niche markets.
• How are products in a mass market characterized?

  Products in a mass market are aimed at a large group of buyers and have a wide appeal.
• What is the focus of products in a niche market?

  Products in a niche market are aimed at a specific group of buyers and meet their particular requirements.
• Give an example of a mass market in the confectionery sector.

  The mass market for standard chocolate includes businesses like Cadbury.
• What is an example of a niche market in the confectionery sector?


  Moo Free is an example of a business in a niche market specializing in dairy-free chocolate.
• Why do businesses in mass markets benefit from economies of scale?

  Businesses in mass markets benefit from economies of scale because they sell to more consumers, leading to higher sales volumes.
• What is a risk associated with businesses in niche markets?

  Businesses in niche markets can be more risky because they sell to a smaller number of customers.
• How does competition differ between mass and niche markets?

  There is usually less competition in niche markets than in mass markets.
• What is market size?

  Market size is the total value of sales in a market over a certain time period.
• How is market share calculated?

  Market share is calculated by dividing a business's sales in a certain time period by the total sales in the total market.
• How does the market size of mass markets compare to niche markets?

  Mass markets have a larger market size than niche markets.
• Why do firms in mass markets need to make their brand distinctive?

  Firms in mass markets need to make their brand distinctive to help consumers differentiate their products from competitors.
• What role does branding play in a competitive market?

  Branding helps encourage consumers to buy products and affects the market share of a business.
• How does competition affect the marketing mix of firms?

  Competition affects the marketing mix by influencing decisions about product quality, promotion, pricing, and distribution.
• What is direct competition?

  Direct competition occurs when two or more businesses sell similar products that appeal to the same group of customers.
• What is indirect competition?

  Indirect competition occurs when businesses sell different products but compete for the same customers.
• How does competition affect product quality in a competitive market?

  In a competitive market, firms need to ensure their products are of good quality to attract customers.
• What is a competitive pricing strategy?

  A competitive pricing strategy means setting prices based on competitor prices.
• What is penetration pricing?

  Penetration pricing is when firms set low prices for their products initially to attract customers.
• Why do businesses need to adapt to changes in the market?

  Businesses need to adapt to changes in the market to be successful and maintain their market share.
• What are some ways markets can change?

  Markets can change due to shifts in consumer preferences, innovation, changes in shopping methods, and new competitors entering or leaving the market.
• How can legislation affect markets?

  Changes in legislation can affect the products sold in a market, such as taxes on certain goods.
• What is online retailing?

  Online retailing is selling products via the internet, such as through apps or websites.
• What impact has online retailing had on traditional retailers?

  The growth of online retailing has negatively impacted traditional retailers, leading many to close down.
• What are the benefits and drawbacks of online retailing for businesses and customers?

  Benefits:

  • Lower costs for businesses due to no physical shop.
  • Convenience for customers to order anytime and from anywhere.

  
  

  Drawbacks:

  • Increased competition for businesses.
  • Some customers prefer to see products before buying.
• How does competition affect the promotion strategies of firms?

  Competition leads firms to heavily promote their products to stand out from competitors.
• What is the nature of ownership in competitive markets?

  Competitive markets are often dominated by a few large businesses, making it hard for smaller firms to survive.
• How can a franchise help a new firm succeed in a competitive market?

  A franchise allows a new firm to use the established brand name and reputation of an existing business.
• What is the difference between risk and uncertainty in business?

  Risk involves known probabilities of outcomes, while uncertainty involves unexpected events that are difficult to predict.
• How can businesses manage risks?

  Businesses can manage risks by considering probabilities of negative outcomes and implementing strategies to minimize them.
• What are examples of uncertainties that businesses face?

  Examples of uncertainties include unexpected weather events and changes in consumer preferences.
• How did a change in legislation affect a car manufacturer?

  A change in legislation increased taxes on diesel cars, leading to lower demand for a new diesel model.
• What is the impact of consumer preferences on businesses?

  Changes in consumer preferences can significantly affect sales and market demand for products.
• How can businesses adapt to changing consumer preferences?

  Businesses can adapt by changing existing products, developing new products, or altering marketing strategies.
• What is the significance of market research for businesses?

  Market research helps businesses predict demand and understand consumer preferences.
• How can businesses maintain demand in a changing market?

  Businesses can maintain demand by finding ways to cut costs and lower prices.
• What is the role of innovation in market changes?

  Innovation can lead to the emergence of new products or processes, affecting market growth and decline.
• How does online shopping affect consumer behavior?

  Online shopping allows customers to compare prices easily and shop conveniently from anywhere.
• What are the consequences of having an insecure online retail site?

  Having an insecure site can lead to financial losses and damage a firm's reputation.