1.2 Competitive Environments

• What is a current economic condition mentioned in the material?


  There’s a recession
• Why is market research important after creating a market map?

  To validate gaps in the market
• What did Ryanair do in the airline market?

  Entered the low price budget segment
• How can existing businesses use market mapping?

  To reposition their brand or product
• What are the pros of using market mapping?

  • Identifies potential market gaps
  • Helps reposition existing brands
  • Highlights overcrowded market areas
  • Encourages market research to reduce risk
• What are the cons of using market mapping?

  • Gaps do not guarantee success
  • Limited to two variables
  • Potential bias in mapping
  • Poor accuracy can lead to bad decisions
• Why might a gap for high price low quality exist?

  No demand for such products
• What limitation does market mapping have regarding variables?

  It only considers two variables at a time
• How can bias affect market mapping results?

  It may misplace competitors on the map
• What could poor accuracy in market mapping lead to?

  Wasted investments and poor decisions
• What is an example of a market mapping variable?

  Price
• How might a business change its product range using market mapping?

  By targeting a different market segment
• Market segmentation divides the market into different sections (segments) to enable the business to specifically target customers with the most appropriate products.
• what are demographics?

  Population characteristics.
• What are some examples of demographics?

  -age

  -gender

  -level of education

  -race

  -religion

  -family size
• What are some of examples of market segments?

  -location

  -demographics

  -lifestyle

  -income

  -age
• what is market research?

  The process of gathering and analyzing information about a market, including customers, competitors, and trends, to make informed business decisions.
• what is marketing?

  Marketing is the process of promoting and selling products or services.
• why do businesses conduct market research?

  To understand customer needs and preferences, identify market opportunities, and make informed business decisions.
• what is primary research?

  Original data collected directly from the source.
• what are some examples of primary research?

  -questionnaires

  -interviews

  -focus groups
• what is secondary research?

  Using existing data and information collected by others for your own research purposes.
• what are some examples of secondary research?

  -online data

  -previously conducted interviews
• what is quantitative market research?

  numerical data collected that is easy to analyse and represent graphically
• what is qualitative market research?

  non numerical, about people’s opinions
• what is some market information that is good to know when starting a business?

  -do market research

  -market competition

  -where the gap in the market is

  -competitors

  -trends

  -USPs
• what is a competitive environment?

  Market competition
• if there are lots of competitors in a market this will increase the power of the consumers
• businesses will compete on price where foods are similar and no strong brand loyalty has been established
• if there are few large competitor, the competition tends to be non-price terms
• if there is only one business selling a good or service, then they can charge any amount they like
• what is market structure?

  Market structure refers to the organizational characteristics of a market, such as the number of firms, barriers to entry, and degree of competition.
• what is monopoly?

  Market control.
• when does monopoly occur?

  when one firm dominates the market
• what is oligopoly?

  Market structure dominated by a small number of large firms.
• when does monopolistic competition occur?

  when there are many firms in the market but there is some form of product differentiation.
• monopoly -> duopoly -> oligopoly -> monopolistic competition -> perfect competition
• what is innovation?

  The process of creating and implementing new ideas, products, or methods.