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21 Cards in this Set
- Front
- Back
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Define market. |
Any place where buyers and sellers come together to exchange goods and services. |
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Define consumer goods and services market. |
This market involves the purchasing of a finished consumer good by the end consumer. |
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Define commodity market. |
This market involves the trade of raw materials which are later transformed into finished products. |
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Define capital goods market. |
This involes the trade of capital goods. |
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Define labour market. |
This market provides the skilled and unskilled workers who operate in capital and consumer goods markets. |
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Define mass market. |
This is the marketing of a product to all possible consumers in the same way. |
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Define niche market. |
This is the marketing of a product to a particular, small segment of the market. |
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Give 8 factors that affect the demand for products and services. |
Price of other goods/services Real/disposable income Changes in tastes and preferences Size and structure of the market Expectations of future prices Government policy State of the economy Market influence |
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What is the law of demand? |
As price increases, demand decreases. As price decreases, demand increases. |
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Explain subsitute goods. |
If price of a good rises, demand for substitutes rise. |
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Explain complimentary goods. |
If price of a good rises, demand for complimentary goods fall. |
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Explain the law of supply. |
The higher the price, the more the business will want to supply. The lower the price, the less the business will want to supply. |
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Explain the general rule of supply. |
An increase in supply leads to a decrease in price. A decrease in supply leads to an increase in price. |
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Explain supply curves. |
As supply decreases, supply curve will shift to the left. |
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What are the factors that cause supply to change? |
Changes in the cost of production. Changes outside human control/physical conditions. Development of new technology. Subsidies and production capacity. Number of suppliers. |
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What is the equation to find price elasticity of demand? |
PED = % change in price divided by % change in demand. |
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Explain inelastic demand. |
If the answer is <1, demand is inelastic meaning demand is not greatly affected by a change in price. |
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Explain elastic demand. |
If the answer is >1, demand is elastic meaning demand is greatly affected by a change in price. |
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Evaluate the usefulness of price elasticity when making business decisions. |
+ Forecasts sales. + Gains cost advantage. + Meets objectives. - Need previous sales information. - Difficult when determining a mass market. - Unforseen consequences eg new competitors. |
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Evaluate mass marketing. |
+ Large target audience so high selling potential. + Economies of scale. + Reduced market research costs. - High levels of competition. - Wide range of tastes and preferences. - Many resources required. |
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Evaluate niche marketing. |
+ Specialise and concentrate all its efforts on a small, segment of the market. + Loyal customers with inelastic prices. + Business opportunities for entrepreneurs. - Less risk spread. - Can't benefit from bulk buying. - Less consumers. |
