The Market

• what is the definition of brands?

  name, image or logo which help one product/service stand out from its competitors
• what does adding value mean?

  process by which firms increase the price that the consumer is willing to pay
• what happens when brands add value?

  makes products/service more desirable to consumers
• how does brands influence the position of business within its markets?

  • mass markets: use branding to stand out from competitors
  • niche markets: use branding to communicate their offering to a small, well defined group of consumers
  • strong brands charge higher prices than weaker brands
  • perceived quality in strong brands is better than weaker brands
• what is a mass market?

  where a business sells into the largest part of the market, where there are many similar products offered by competitors
• what is a market segments?

  groups of consumers who have similar characteristics
• when does a mass market occur?


  when businesses sell their products to most of the available markets
• what are the characteristics of a mass market?

  • products are less unique s
  • low average costs
  • low prices - greater affordability + higher sales volumes + lower profit margins
• what is market research?

  gathering data from consumers which is used to influence business decisions
• what are the aims of a market?

  identify, anticipate and satisfy consumer needs and wants
• what is a market?

  any place where buyers and seller can meet
• what is a niche market?

  where a business targets a smaller segment of a larger market, where customers have specific needs and wants
• when does a niche market occur?


  when businesses identify and satisfy the demands of a small group of consumers within the wider market
• what are the characteristics of a niche market?

  • high prices allows business to earn higher profit margins
  • high prices makes products less affordable
  • high average costs
  • products are more unique
• sales revenue - price x quantity

  sold
• sales of a business / total sales in the market x 100
• what is a dynamic market?

  a market that is always changing
• what is a monopoly power?


  a large business which dominates a market
• what are the four area to consider when examining dynamic markets?

  • online retailing
  • how markets change
  • innovation and market growth
  • adapting to change
• what is online retailing?


  involves selling products via the internet
• what are the advantages on online retailing?

  • access to more consumers
  • longer trading hours
  • cheaper to run
  • collects data by tracking consumer behaviour
  • can receive offers
  • available anytime
• what are the disadvantages of online retailing?

  • can be expensive
  • dominated by larger businesses
  • high levels of competition
  • lack of personal contact with customers
  • some consumers may struggle
  • credit card fraud
• why would a market change?

  changing market conditions offer new opportunities for firms + pose threats
• what are the changes that cause markets to be dynamic?

  • consumer tastes
  • demographic
  • amount of competition
  • legislation
• what is market growth?

  the measurement of the change in the entire market
• what are the market growth factors?

  • increasing population sizes - increases demand
  • increasing incomes - increases demand
  • changing tastes
• why is adapting to market changes important?

  allows business to thrive in dynamic markets
• what are the strategies to adapt to change?

  • create flexible business structure
  • meet customers needs
  • invest in staff training, new products
• what is first mover advantage?


  competitive advantage gained by being the first business to introduce a new product/service to the market
• risk?

  the possibility that things will go wrong
• what is risk management?


  process of identifying, assessing and preparing for potential threats to business success
• what is uncertainty?

  the unpredictable and uncontrollable events that affect businesses
• what is sales volume?


  number of products sold
• when does competition occur?

  when at least two businesses are providing goods to the same target market.
• what is direct competition?


  occurs when the business is targeting customers with the same product as a competitor
• what is indirect competition?


  occurs when firms sell different products but compete with each other for customers disposable income
• what is disposable income?


  money that consumers have left from their pay check after they have paid their taxes
• how does competition benefit consumers?

  • businesses offer lower prices
  • businesses produce better quality products
  • businesses provides better customer service
• what does the absence of competition cause?


  reduces incentives for businesses to innovate, be efficient or offer consumers lower prices
• income: money left over after paying expenses