AS Business Studies 9609
Business Studies – 3.1 Nature of Marketing
- The role of marketing and its relationship to other business activities.
- Demand and supply – interactions between demand, supply and price
- Markets – Consumer, Industrial, Product orientated and Market-oriented
- Mass and niche marketing how to measure the size of a market
- Market segmentation – Geographic, Demographic and Psychographic
The role of marketing
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Exam tip
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Demand and Supply
A market is any place where buyers and sellers meet to trade products. The market price is the amount customers are charged for items and depends on demand and supply. Economists, marketing managers and business owners need to know what effects a price change has on the quantity purchased (Demanded).
Demand is the amount of product customers are prepared to buy at different prices. Supply is the amount of a product businesses are prepared to sell at different prices.
How to calculate the elasticity of demand
To calculate a percentage change in demand: Change in demand / original demand x100.
Elasticity of Demand
Price Elasticity measures how responsive demand is to changes in price. When products are elastic price changes will result in a large change in demand. In the following image lowering the price from £300 to £200 increases the demand.
When a product has an inelastic demand curve changing the price does not result in a large change of demand. Fuel is a good example of a product that is inelastic as people will still need to buy fuel even if prices are increased. The following image shows an inelastic demand curve. Not that the line is much more vertical (inelastic).
A demand curve is Inelastic when a percentage change in price results in a proportionally smaller percentage change in the quantity demanded.
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3.1.3 Markets
3.1.5 Mass and Niche Marketing
3.1.6 Market Segmentation
Section A 3.1 Nature of Marketing Practice for Paper One
Section B 3.1 Nature of Marketing Practice for Paper One
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