Paper 1: A level Business Edexcel

• What is difference between mass market and niche market

  Mass market - largest part of market where there are many similar products offered by competitors

  
  

  Niche market - smaller segments of larger market where customers have specific needs and wants
• What is a brand name

  Name, sign, symbol or other feature that allows consumers to identify the goods of a business and differentiate it from rivals
• What is Online retailing


  Buying goods online
• What is Market share


  Total sales a business has in a particular market that involves one and more other businesses

  
  

  Equation:

  Business sales / Market sales
• What is Primary Research


  Data collected first-hand for a specific purpose (involves questionnaires)
• What is Secondary research


  Data that already exists for a different purpose (can be internal - stock movements/sales figures and external - international publications/rival websites)
• What is Quantitative research


  Data can be measured (financial element to it)
• What is Qualitative research


  Research based on opinions, beliefs and intentions.
• What is Consumer panel

  Group of consumers are asked for feedback of a product after a period of time
• What is Focus groups


  Consumers are invited for a discussion about a product that is going to be launched in the market
• What is Market orientation


  Business that places the needs of the customers at the centre of decision making
• What is Product orientation


  Business that puts emphasis on the product itself - meaning contact with customer comes last
• What is Market research


  Collection, presentation and analysis of data relating to the marketing and consumption of goods and services
• What is Market segmentation

  Group that has similar characteristics in a whole market (behavioural, psychographic, demographic and geographic)
• Ways to add value


  - Build brand

  - Deliver excellent customer service

  - Add product features and benefits that customer want or value
• What is Competitive advantage


  Advantage that helps a business to perform better than its rivals
• What is market map


  Range of positions a product can take in market based on two dimensions that are important to customers

  
• What is Market positioning


  View a customer has of a product compared to other rivals (in terms of quality, value and image)
• What is Product differentiation

  Attempt by a business to set the product apart from its rivals
• What is USP


  Aspect or feature of a product that clearly distinguishes it from its rivals
• What is Demand


  Amount of a product consumers are willing and able to buy at any given price
• What are Factors affecting demand

  - Price of substitutes

  - Complementary goods

  - Advertising and branding

  - Consumer tastes

  - Seasonality

  - Demographics and external shocks (government, competition and economic climate)
• What are complementary goods


  Goods that are purchased together because they are consumed together (milk and cereal)
• What are inferior goods


  Income rising = demand falls (Tesco value crisps)
• What are Substitute good


  Goods that can be bought as an alternative to other but perform the same function
• What is a Normal good


  income rising = demand rises (kettle chips for example)
• What is Supply


  Amount of a product which suppliers will offer at a given price
• What are Factors affecting supply

  - Cost of production

  - Introduction of new technology

  - Indirect taxes

  - Government subsidy and external shocks (weather and government)
• What is a Subsidy


  Grant given to producers using to encourage production
• What is equilibrium price


  the price which demand and supply are equal
• Excess supply


  point at which supply is greater than demand (unsold supply)
• What is total revenue


  Money generated from sales of good (price x quantity)
• What is a supply and demand graph
• How does supply respond to demand
• What is Price Elasticity Demand (PED)


  Measures the responsiveness to a change in quantity demanded to a change in price

  
  

  EQUATION:

  % Change in quant demanded / % Change In Price
• Price/income Elastic

  Change in price/income results in a greater change in demand
• Price/income Inelastic

  Change in price/income results in a small change in demand
• What is Income Elasticity Demand


  Measures the responsiveness to a change in quantity demanded to a change in income

  
  

  EQUATION:

  % Change in Demand / % Change in Income
• Factors affecting PED

  - Time

  - Competition

  - Brand strength

  - Habit, products demanded and consumed as matter of habit tend to be price inelastic
• Factors affecting YED

  Necessity or luxury