A Level Section 3: Marketing
25 Marketing
A confidence level shows how certain the market
researcher is of the results given.
Correlation occurs when there are apparent links between
variables (for example, promotional spending and sales).
Cross-price elasticity of demand shows how much
demand for one product (A) changes when the price of
another product B changes:
Percentage change in quantity demanded of A
Percentage change in the price of B
Extrapolation involves identifying the underlying trend in
past data and projecting this trend forwards. For example,
if the underlying trend in sales figures is upwards and
if we assume this trend will continue, we can project it
forward and estimate future sales.
A franchise occurs when one business (a franchisor)
sells the right to use its name and processes to another (a
franchisee).
Income elasticity of demand measures the amount that
demand changes in relation to changes in income, and is
calculated as follows:
Percentage change in quantity demanded
Percentage change in income
Market analysis occurs when a firm undertakes a detailed
examination of the characteristics of a market.
Market research is the process of gathering, analysing
and presenting data relevant to the marketing process.
The market share of firms within the market measures
the sales of a firm relative to the total market size.
Market size may be measured in terms of the volume or
value of sales.
The marketing mix is the combination of factors, such
as the price, product, distribution and promotion, that
influence a customer’s decision to purchase a product.
The marketing objective is the marketing target, such as
X per cent market share.
A marketing plan sets out what a business intends to do
in relation to its marketing activities. The marketing plan
sets out the marketing objectives, strategy, budget and the
activities necessary to achieve objective.
The marketing strategy is the long-term marketing plan
to achieve the marketing objective.
Moving average is a weighted average that shows the
underlying trend of a given set of data.
Cambridge International A and AS Level Business © Hodder & Stoughton 2014
A patent provides legal protection for a new invention.
Primary market research uses data gathered for the
first time.
Promotional elasticity of demand will show the
sensitivity of demand in relation to changes in promotional
expenditure:
Percentage change in the quantity demanded
Percentage change in promotional expenditure
Research and development (R&D) is part of the
innovation process. It refers to the generation and
application of scientific knowledge to create a product or
develop a new production process.
A sales forecast is an estimate of the volume or value of a
firm’s sales in the future.
Secondary market research uses data that has been
gathered previously. (It uses the data for the second time.)
The value of sales measures the amount of money spent
on products in a market.
The volume of sales measures the number of units sold in
a market.
Weather elasticity of demand shows the sensitivity of
demand in relation to changes in factors such as the
temperature or rainfall:
Percentage change in quantity demanded
Percentage change in rainfall
26 Globalisation
and international
marketing
Globalisation occurs when markets across the world
become more open for sales or production.
A global strategy occurs when a business treats the world
as one market and offers the same products to every
country.
A localised strategy adapts the marketing mix for local
conditions.
Localisation occurs when a firm adapts what it offers to
local market conditions.
The World Trade Organisation (WTO) is an organisation
of countries aimed at reducing protectionism across the
world.