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21 Cards in this Set

  • Front
  • Back

Define market.

Any place where buyers and sellers come together to exchange goods and services.

Define consumer goods and services market.

This market involves the purchasing of a finished consumer good by the end consumer.

Define commodity market.

This market involves the trade of raw materials which are later transformed into finished products.

Define capital goods market.

This involes the trade of capital goods.

Define labour market.

This market provides the skilled and unskilled workers who operate in capital and consumer goods markets.

Define mass market.

This is the marketing of a product to all possible consumers in the same way.

Define niche market.

This is the marketing of a product to a particular, small segment of the market.

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

What is the law of demand?

As price increases, demand decreases.

As price decreases, demand increases.

Explain subsitute goods.

If price of a good rises, demand for substitutes rise.

Explain complimentary goods.

If price of a good rises, demand for complimentary goods fall.

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.

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.

Explain supply curves.

As supply decreases, supply curve will shift to the left.

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.

What is the equation to find price elasticity of demand?

PED = % change in price divided by % change in demand.

Explain inelastic demand.

If the answer is <1, demand is inelastic meaning demand is not greatly affected by a change in price.

Explain elastic demand.

If the answer is >1, demand is elastic meaning demand is greatly affected by a change in price.

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.

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.

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.