Edexcel A level Business Theme 1 notes from 2015. From the 'My Revision Notes' revision guide. Complete notes that are condensed from the revision guide but still make sense and provide excellent explanations.
Theme 1
The market
mass market niche market
characteristi generic products which are similar in specialist products and services are required
cs form and function changes in consumer tastes can be fast and
huge potential number of customers harmful to the market
high production levels allow economies consumer needs are met more precisely so
of scale - lower production costs higher prices can be charged
can use mass media advertising high profit margins
easier to enter market for firms that have
limited financial resources
market size huge market small market
and market large firms operate successfully even successful firms achieve higher shares
share with a low market share
e.g. Ferrero: 5% share of UK chocolate
market
brands large brands develop with name/logo differentiation achieved through product
representing key point of differentiation features and functions
Online retailing
Growth in online retailing has varied between markets, e.g. clothing =
good, books = bad.
Growth unpredictability adds to unpredictability of dynamism in online
retailing
Retailers that don’t switch, fail as online rivals steal sales
Product has to be able to be brought wherever consumers want to buy
it, vital to have online presence
Market change
Change as a result of major external influences: PESTLE (political,
economic, social, technological, legal and environmental)
Examples of market change:
P = 2016 Living Wage push legal minimum wage from £6.70 to £7.20.
good for low-paid employees but hard for low-wage industries.
E = economic recession 2008-09 meant changes in UK grocery retailing,
shoppers opted for Aldi/Lidl
S = increased desire for convenience
T = apps now exist whereas they didn’t 10 years ago
L = growth in e-cig market is affected by new laws for who can buy, how
they’re advertised and where can be used
E = car industry changing to minimise impact of exhaust fumes
Innovation and market growth
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