Theme 1

• What is a dynamic market

  A market that is constantly changing
• Key factors in a dynamic market

  • Online retailing
  • Changing trends
  • Innovation & market growth
  • Adapting to change
• What is a mass market

  Involves meeting the needs of a large group of potential customers whose needs are more generic and less specific.
• What is a niche market

  This involves meeting the needs of a small group of buyers who all have specific needs and wants
• what is product orientation

  Involves developing products the business is good at making
• What is market orientation

  Focuses on developing products to meet the needs and wants of customers
• What is Primary research

  Research that is done first hand by the researcher for their own specific purpose - it's brand new and did not exist before
• What is Secondary research

  Research that already exists before and was conducted by someone else
• What is qualitative data 


  Data that involves thoughts, feelings and opinions
• What is quantitative data 


  Numerical and statistical data
• What is the purpose of a market map

  • Identify a gap in the market
  • Identify if business could succeed
  • identify competition
• What is a market segment 


  Splitting up the market into groups with similar buying habits/ characteristics / interests to be able to meet their needs more effectively.

  • Gender
  • Income
  • Age
  • location
• What is a competitive advantage

  Refers to one or more things a business does which competitors cannot or will not match
• Ways to get a competitive advantage

  • USP
  • Improved quality
  • Branding
  • Lower cost
  • Convenience
  • Customer service
• What is demand 


  Number of people interested in buying a product backed up by their ability to pay.
• Factors affecting demand

  • Seasonality
  • External shocks
  • Changing trends
  • Change in customers income
  • Advertising / branding
  • Demographics
• What is supply 


  the quantity of a product that producers are able and willing to deliver within a specific time period
• Factors that affect supply

  • External shocks
  • physical constraints
  • Price
  • cost of production
  • taxes
  • government subsidies
  • development of new technology
• What is market equilibrium

  The state of balance or equality between supply and demand
• What is price elasticity of demand 


  %change in demand / % change in price
• What does price elastic mean 


  This is when demand for a product is responsive to a change in price.
• What does price inelastic mean 


  This is when demand for a product is unresponsive to a change in price.
• What are determinants of price elasticity

  • Substitute products available
  • Brand loyalty and habitual buying
  • Degree of necessity / luxury
• Income elasticity of demand 


  % change in demand / % change in income
• Determinants of income elasticity

  • target customer
  • Product necessity
• What are the elements of the design mix

  • Aesthetics
  • Function
  • Cost
• What is the product life cycle

  • Introduction
  • Growth
  • Maturity
  • Decline
• What are extension strategies

  • Offering free gifts
  • Developing new models
  • Price reductions
  • Selling in new outlets
  • Limited editions
  • Identifying new uses for existing products
• What are the different pricing strategies

  • Price skimming
  • Predatory pricing
  • Psychological pricing
  • Competitive pricing
  • Cost plus pricing
  • Penetration pricing
• What is price skimming 


  Setting prices initially high and then lowering them as competitors enter the market
• What is predatory pricing 


  This is when you set prices so low that others cannot compete
• What is psychological pricing


  This is when you set prices so they seem better value for money
• What is competitive pricing 


  This is when you set prices based on competitors pricing with the aim to undercut the market leader
• What is cost plus pricing

  This is when a fixed percentage is added onto the cost is takes to produce one unit of a product
• What is penetration pricing 


  This involves setting prices initially low to gain customer interest and then increasing the price later
• What is distribution 


  This involves getting products to the right place for customers at the right time
• What is a distribution channel


  The methods of getting products from manufacturers to consumers
• What is an intermediary 


  Anyone between you and the consumer within the distribution channel
• what are the different types of intermediary

  • Wholesaler
  • Retailer
  • Agent
• What is a product portfolio


  The range of products a business sells