Business 1.1

What is a market?

• A place where buyers and sellers meet

• A product sold in a store

• An online shopping platform

• A type of marketing strategy

Answer explanation

A market is fundamentally defined as a place where buyers and sellers meet to exchange goods and services. This definition encompasses physical locations as well as online platforms, but the core concept remains the interaction between buyers and sellers.

Which of the following is an example of a mass market?

• Organic food market

• High-end fashion market

• Kellogg's Corn Flakes

• Handmade crafts market

Answer explanation

Kellogg's Corn Flakes is a mass market product, widely available and targeted at a broad audience. In contrast, organic food, high-end fashion, and handmade crafts cater to niche markets.

What is the primary goal of marketing?

• To maximize profits only

• To identify, anticipate, and satisfy consumer needs profitably

• To produce goods at the lowest cost

• To create the most innovative product

Answer explanation

The primary goal of marketing is to identify, anticipate, and satisfy consumer needs profitably. This approach ensures that businesses not only meet customer demands but also achieve financial success.

In a niche market, products are typically:

• Produced on a large scale

• Aimed at broad market segments

• Highly specialized and unique

• Low-priced and widely available

Answer explanation

In a niche market, products are highly specialized and unique, catering to specific customer needs rather than being mass-produced or aimed at broad segments. This focus differentiates them from mainstream products.

Market share can be calculated using which of the following formulas?

• Sales of a business / Total sales in the market × 100

• Total market sales / Sales of a business × 100

• Sales value / Sales volume × 100

• Sales of a business - Total sales in the market × 100

Answer explanation

Market share is calculated by dividing the sales of a business by the total sales in the market, then multiplying by 100 to express it as a percentage. Thus, the correct formula is: Sales of a business / Total sales in the market × 100.

Which of the following is an example of a strong brand?

• A generic brand

• A product with low perceived value

• A legally protected name or logo

• A company with a declining market share

Answer explanation

A legally protected name or logo signifies a strong brand as it indicates ownership and recognition in the market, distinguishing it from generic brands or products with low perceived value.

What does it mean when a market is described as dynamic?

• It remains stable over time

• It is subject to rapid or continuous changes

• It has a monopoly

• It faces no competition

Answer explanation

A dynamic market is characterized by rapid or continuous changes, indicating that it is not stable. This contrasts with the other options, which suggest stability, monopoly, or lack of competition.

Which of the following is a disadvantage of online retailing for businesses?

• Access to more consumers

• High website development and maintenance costs

• Ability to collect consumer data

• Longer trading hours

Answer explanation

A disadvantage of online retailing is the high website development and maintenance costs, which can be significant for businesses. In contrast, the other options highlight advantages of online retailing.

A dynamic market can be affected by:

• Changing consumer tastes

• Fixed prices

• A lack of competition

• Stagnant technology

Answer explanation

A dynamic market is influenced by changing consumer tastes, as shifts in preferences can lead to changes in demand and market trends. The other options, like fixed prices and stagnant technology, do not directly impact market dynamics.

Innovation in a dynamic market often leads to:

• Market decline

• Market stability

• Market growth

• Market saturation

Answer explanation

Innovation in a dynamic market typically drives new ideas and products, leading to increased consumer interest and demand, which results in market growth. Thus, the correct answer is market growth.