3.1 Key Questions & Answers

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3.1 Edexcel Business Studies - Key Questions & Answers Flashcards

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Question Answer
What is the difference between marketing and market research? Marketing is the whole management process of anticipating, identifying and satisfying customer needs profitably whereas market research is the process of gaining information/data
What is the difference between primary and secondary data? Primary has been directly gathered for a specific purpose whereas secondary is information that already exists
What is the difference between quantitative and qualitative data? Quantitative is expressed as numbers and can be statistically analysed whereas qualitative is about opinions, judgements and attitudes
Give 3 examples of market segments? Part of a market that contains a group of buyers with similar buying habits Age, gender, location, interests, hobbies etc…
What are the 3 stages of market research? Designing the research Undertaking the research Analysing the research
Why is market research essential to the success of all businesses? It allows businesses to be able to make decisions based on evidence/data
What is the difference between a product trial and a repeat purchase? Product trial is when a customer buys a good for the first time and repeat purchase is when a customer is buying a good they have previously bought
Name 3 methods businesses commonly use to try and get customers to trial a product? Advertising, Free Publicity, PR, free samples, user testing, low trial prices, targeting trade buyers, penetration pricing
Name 3 methods that businesses commonly use to try to get customers to make repeat purchases? Promotion – suitable advertising, loyalty cards etc… Price – reasonable for the quality of the product Place – sold in a convenient place with good customer service Product – good quality product
What is the product life cycle? (give definition not list the stages) The typical stages that products will go through, throughout their lifetime
What are the stages of the product life cycle diagram? Development Launch Growth Maturity Saturation Decline
Why would a business want to use an extension strategy in the maturity/saturation stage of the products life cycle? To try and increase the life cycle of the product leading to more sales therefore generating more profit over its life cycle
Explain what cash flow would be typically like during the stages of a products life cycle? Development – negative cash flow, lots of outflows on developing the product but not inflows as not on sale yet Launch – still negative cash flow, high levels of outflows on advertising, no inflows still Growth – inflows now begin to grow as sales grow which narrows the amount of negative cash flow. Still fairly high outflows, during growth stage there will be a point cash flow becomes even. Maturity – Highest point of inflows as sales high, outflows begin to reduce as not as much need for advertising, should be positive cash flow throughout maturity. Saturation – Depends if business use extension strategies or not? Decline – Business will still be in positive cash flow as will be making some sales even though this amount is reducing, outflows should be minimal unless the business is trying extension strategies.
What is meant by the term product portfolio or product mix? The range of different products sold by a business
How can a business analyse its product portfolio? Grouping its products using the Boston Matrix
Why would a business want to analyse its product portfolio using the Boston Matrix? To enable it to make decisions on which products to invest more advertising budgets into and to help make decisions whether to kill products off or not
What is the difference between a brand, an own brand? A brand is a names product that is seen as being different from other products which customers can associate and identify with, a own brand is a product sold under the brand name of a supermarket or retailer
What are the advantages of branding a product? Can charge a premium price Greater customer awareness Customers perceive it as being better quality Increased sales and market share
What are the different ways in which a business can differentiate their product? Name of the product Design, formulation and function of the product Packaging of the product
What is meant by the key term marketing mix? A combination of factors which help a business take into account customer needs when selling a product. Often summarised as the 4 P’s Product, Price, Place, Promotion
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