Markets & Marketing Data (AQA A Level Business): Flashcards
Exam code: 7132
1/520Still learning
Know0
- FrontMarkets
Define market.
Was this flashcard helpful?
Cards in this collection (52)
Define market.
A market is any place, physical or online, where buyers and sellers come together to exchange goods or services.
What is the difference between goods and services?
Goods are tangible products that can be physically touched and owned, while services are intangible activities or experiences that cannot be physically owned.
True or False?
Unlike goods, services cannot be produced in advance and held in stock.
True.
Services are consumed at the point of delivery, so they cannot be stored in the way that goods can.
Why do customers often rely on reviews and reputation when buying services?
Services are harder to evaluate before buying, as they cannot be demonstrated or sampled in the same way as goods.
Define business to business (B2B) market.
In a business to business (B2B) market, a business sells its products or services to other businesses.
Why does the buying process in B2B markets often take longer?
The B2B buying process is often complex, involving multiple decision-makers and longer sales cycles.
In B2B markets, ______ selling and direct business relationships are more important than mass advertising.
In B2B markets, personal selling and direct business relationships are more important than mass advertising.
How do buying decisions in B2C markets differ from those in B2B markets?
B2C buying decisions can be more emotional, influenced by branding, advertising and peer recommendations.
True or False?
B2C markets have fewer buyers, but each transaction is larger in value.
False.
This describes B2B markets. B2C markets have large numbers of buyers, each making smaller individual purchases.
Define consumer to consumer (C2C) market.
In a consumer to consumer (C2C) market, individual consumers buy from and sell to each other, usually through an online platform.
Why do C2C platforms focus their marketing on building trust?
The platform acts as an intermediary, so it builds trust through reviews, ratings and buyer protection schemes.
Define monopoly market.
In a monopoly market, one business meets all consumer demand.
Why might a monopoly business spend little on innovation or advertising?
As the single provider in the market, a monopoly business does not need to compete with rivals.
Define oligopoly.
In an oligopoly, a few large businesses dominate the market, such as UK supermarkets.
True or False?
Oligopoly markets usually have intense price competition.
False.
Oligopolies often have limited price competition. Prices are similar, and firms spend large sums on promotion to differentiate their products.
In which type of market is price competition likely to be most intense?
Price competition is most intense where many small and medium-sized businesses compete, as customers can switch with ease between providers.
In some oligopoly markets, _________ intervene to ensure that no one business becomes too powerful.
In some oligopoly markets, governments intervene to ensure that no one business becomes too powerful.
Define competitive behaviour.
Competitive behaviour describes the strategies businesses use to win and retain customers in the face of rivalry.
What is the main risk of price competition?
Cutting prices may lead to a price war, driving down profit margins for all competitors.
Give two methods of non-price competition.
Methods include improving product quality, investing in customer service, building a strong brand, launching loyalty schemes and offering greater convenience.
Developing new products can give a business a ___-mover advantage, securing market share before rivals can respond.
Developing new products can give a business a first-mover advantage, securing market share before rivals can respond.
How does product differentiation benefit a business?
Product differentiation allows a business to charge a premium price and reduces direct price competition.
True or False?
In a fast-growing market, businesses can increase sales without taking customers from rivals.
True.
As the market expands, businesses can increase sales without taking customers from rivals, which reduces the pressure to compete aggressively.
Why might early movers lose their advantage in a growing market?
Growing markets attract new entrants, which increases competition over time.
How might a business respond to a declining market?
A declining market may force a business to cut costs, diversify or exit the market altogether.
Define market size.
Market size is the total value or volume of all sales made within a particular market over a given period.
Define market share.
Market share is the proportion of total market sales held by one business, expressed as a percentage.
Market share = (Business sales ÷ Total market sales) × 100
Define market segment.
A market segment is a distinct group of customers within a broader market who share similar characteristics.
True or False?
A business can lose market share even when its sales are rising.
True.
If the market is growing faster than the business's own sales, it will be losing market share despite rising sales.
Why can a high market share benefit a business?
High market share gives greater bargaining power with suppliers and may allow the business to benefit from economies of scale.
What is the difference between market growth and sales growth?
Market growth is the percentage increase in total market size, while sales growth is the percentage increase in a single business's own sales over the same period.
How is a growth rate calculated?
Growth rate is calculated using this formula:
Growth rate = ((Current year figure − Previous year figure) ÷ Previous year figure) × 100
Define sales data.
Sales data is detailed records of a business's sales performance, broken down by category, such as region, product line or individual store.
Sales data can highlight ______ patterns and trends that inform production planning, staffing and stock decisions.
Sales data can highlight seasonal patterns and trends that inform production planning, staffing and stock decisions.
Define return on marketing spend.
Return on marketing spend (ROMS) measures the revenue generated for every pound spent on marketing.
ROMS (ratio) = Revenue generated by marketing ÷ Marketing spend
A campaign costs £40,000 and generates £160,000 in revenue. What is its ROMS ratio?
The ROMS ratio is £160,000 ÷ £40,000 = 4 : 1, so £4 is returned in sales for every £1 spent.
True or False?
Return on marketing spend fully captures the long-term value of brand-building.
False.
ROMS reflects the short-term revenue impact of marketing and may not capture the long-term value of brand-building.
What is the difference between sales volume and sales value?
Sales volume is the number of units sold, while sales value is the total revenue generated from those sales.
Sales value = Sales volume × Price per unit
How can cutting prices affect sales volume and sales value?
Cutting prices may increase volume but reduce value if the price fall is not offset by higher sales.
Define correlation.
A correlation exists where there is a relationship or connection between two variables.
What does a negative correlation show?
A negative correlation means that as one variable increases, the other decreases, giving a line of best fit that slopes downwards.
True or False?
A correlation between two variables does not prove that one causes the other.
True.
Correlation does not always indicate causation, so businesses need to conduct research to establish whether a causal relationship exists.
Define extrapolation.
Extrapolation is using past data or trends to predict the future by extending an existing pattern beyond the range of known figures.
When is extrapolation most reliable?
Extrapolation is only reliable when market conditions remain broadly stable.
Give two reasons why extrapolation may be unreliable.
Extrapolation can be undermined by economic shocks, disruptive technology, market saturation, changing consumer tastes, new competition or one-off events.
Define index numbers.
Index numbers standardise data by expressing all values relative to a chosen starting point.
Index = (Current period value ÷ Base period value) × 100
When calculating index numbers, the base period is given an index value of __.
When calculating index numbers, the base period is given an index value of 100.
What does an index value of 120 show?
An index of 120 means the variable is 20% higher than in the base period.
How is percentage change calculated?
Percentage change is calculated using this formula:
Percentage change = ((New value − Old value) ÷ Old value) × 100
Monthly sales grow from £80,000 to £96,000. What is the percentage change?
The percentage change is (£96,000 − £80,000) ÷ £80,000 × 100 = +20%.
Define percentage point change.
A percentage point change is the arithmetic difference between two percentages.
True or False?
If market share rises from 20% to 25%, this is a 5% increase.
False.
It is a 5 percentage point increase but a 25% percentage change, as (25 − 20) ÷ 20 × 100 = 25%.
Sign up to unlock flashcards
or