Lesson 1.2.3b

1.2.3b Market mapping to find gaps and competition Quiz: Pearson Edexcel Business, Unit 2

20 questions

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Lesson 1.2.3b, Market mapping to find gaps and competition: 20 multiple choice questions for the Pearson Edexcel GCSE Business (1BS0), Unit 2: Spotting a business opportunity, written with Revision Ninja.

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The 20 questions

  1. What is market mapping?

    • A technique for drawing up a budget to pay for market research
    • A way of drawing maps of the local area to show where customers live
    • A method of recording the sales of a product over several years
    • A way of plotting competitors on a chart to show how they compare on key features

  2. A market map has price on one axis and quality on the other. What might a gap in the market look like?

    • An area on the map where there are no customers in the local area at all
    • An area on the map where the highest-priced products are always the best
    • An area on the map with high quality and low price that no competitor occupies
    • An area on the map where every competitor sells at the same price and quality

  3. Why is a market map useful to a business?

    • It shows where competitors are positioned and where a gap might exist
    • It shows which government regulations apply to each product in the market
    • It shows the tax paid by every business in the market in one year
    • It shows the exact sales figures of every competitor for the last ten years

  4. Which two features are most commonly plotted on a market map?

    • Staff numbers and office size
    • Tax rate and interest rate
    • Colour and packaging weight
    • Price and quality

  5. A market map shows many competitors clustered at high price and high quality. What might be a sensible opportunity?

    • Ignoring the map and waiting until the competitors have all left the market
    • Entering the cluster and charging a higher price than any of the existing competitors
    • Offering a product with lower quality and an even higher price than the cluster
    • Targeting a lower-price position that offers good quality to a different group

  6. Which of these is a limitation of market mapping?

    • It can only be produced by government bodies with access to official data
    • It always shows the exact sales of every competitor in the market each year
    • It uses only a small number of features, so it may oversimplify a complex market
    • It removes all the risk of launching a new product in a competitive market

  7. A business's market map shows no competitors in the area of low price and high quality. Which decision might follow?

    • Assuming there is no demand, so the idea should be dropped immediately
    • Waiting for a competitor to enter that area before doing any research
    • Investigating whether customers want that combination before launching
    • Launching the product at the highest price in the market straight away

  8. Which of these is most useful when interpreting a market map?

    • Comparing where the business would sit with where existing competitors are positioned
    • Assuming that every point on the map has the same number of customers
    • Reading only the price of the cheapest competitor and ignoring all others
    • Counting the number of employees working for each competitor in the area

  9. A business plots a market map using price and convenience. Which gap would it be looking for?

    • A position with the same price and convenience as the largest competitor
    • A position with high convenience at a low price that few rivals offer
    • A position with low convenience and a high price that every rival already offers
    • A position with no customers at all because the price is too high for anyone

  10. Why might a market map show a gap that is not actually a good opportunity?

    • Gaps on a map cannot exist unless the government has approved a new product
    • Gaps on a map are always caused by competitors who have already left the market
    • There is always more demand in a gap than in any crowded part of the market
    • There may be little demand for that combination of features among customers

  11. Which of these shows a business using market mapping to identify its competition?

    • Recording the energy consumption of its shop over several months of the year
    • Asking the government to publish the names of all businesses in the local area
    • Counting the number of customers who walk past its shop each day in the high street
    • Placing its rivals on a chart by price and product range to see how they compare

  12. A market map has range of products on one axis and location on the other. Which of these is a clear outcome of the map?

    • A business can see exactly how many staff each rival employs in every store
    • A business can see the exact interest rate that each rival pays on loans
    • A business can see the government's tax rate for every product in the market
    • A business can see which combination of range and location is less served by rivals

  13. Which of these is a benefit of using market mapping together with market segmentation?

    • It guarantees that every segment will always buy from the business at a fixed price
    • It removes the need for the business to know anything about its competitors
    • It means the business will never need to change its product in future years
    • It helps a business match its product to a segment that competitors are not serving well

  14. A business finds an under-served segment on its market map. What is the next step?

    • Stopping any further research because the gap has already been found
    • Launching the product in every region of the country at the same time
    • Copying the product of the largest competitor and selling it more cheaply
    • Testing the demand of that segment before committing to launch a product

  15. A business's market map shows a crowded cluster of competitors at high price. Which area might be an opportunity?

    • The same crowded high-price position as all of the existing competitors
    • A position with very low quality and an even higher price than rivals
    • A position where the business charges nothing and offers no product at all
    • A position with quality at a mid-range price that customers can afford

  16. Which of these would be shown on a market map?

    • The tax reference numbers of every business in the local market area
    • The annual wage bill paid by each competitor to its staff each year
    • The number of employees working in each competitor's head office
    • The relative positions of competitors on price and product quality

  17. Why might a business use a market map before entering a new area?

    • To choose the colour of its shop front so that it stands out from rivals
    • To see where competitors are positioned and whether any gap exists
    • To decide which member of staff should lead the launch campaign
    • To calculate the exact profit it will earn in its first year of trading

  18. Which of these is a limitation of a two-feature market map?

    • It requires a specialist market research agency to draw it, so small firms cannot use it
    • It is only useful for businesses that sell their products in more than one country
    • It ignores other factors that customers may value, such as brand or convenience
    • It only compares the prices that competitors charge, not the quality of their products

  19. A market map shows a gap for cheap, fast delivery. What should the business check first?

    • Whether it can copy the logo of the competitor in the same market
    • Whether the gap is already filled by the largest competitor in the market
    • Whether enough customers want fast, cheap delivery to make the gap worthwhile
    • Whether the gap is a sign that the government wants it to close

  20. Market mapping helps a business by showing it:

    • The tax each rival must pay on its sales under the current rules
    • The number of customers each rival has in every town in the country
    • Where it could stand relative to rivals on the features that matter to customers
    • The exact profit each rival made in its last financial year

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