1.1 Flashcards
Define market
A market is any medium in which buyers and sellers interact and agree to trade at a price
Define market size
The total number of sales across all businesses which operate in that market
Define market share
The percentage of the market that a business sells to
Define mass marketing
The attempt to create products or services that have universal appeal
Define niche marketing
A niche market is a very small segment of a much larger market
Define dynamic market
One that is subject to rapid or continuous change
Benefits of operating in a mass market
- large scale production
- large sales = high sales revenue
- increased competitive advantage
- creates brand awareness
- reaches a larger audience
Drawbacks of operating in a mass market
- lots of competition
- high volume production may not be flexible enough to keep up with changes in demand
- easy for competitors to join market
- expensive to develop products that meet customer needs
Benefits of operating in a niche market
- premium prices could be charged
- small scale production may allow for more flexibility
- can target marketing in a very specific way
- usually less competition than in mass markets
Drawbacks of operating in a niche market
- lacks economies of scale
- often these markets are not profitable enough to cover the costs because the sales volumes are lower
- demand for the products may not be constant - especially for seasonal products
Define dynamic market
A market that is subject to rapid or continuous changes
What is an example of a dynamic market?
Online retailing
It is constantly changing ,developing, expanding and offering customers new products and new ways to shop
Define product orientation
A product orientated approach means the business develops products based on what it is good at making and doing rather than what consumers want
Advantages of product orientation?
- does not require MR
- easier/quicker production
- decisions are made much quicker
- business can create the product they want
Disadvantages of product orientation?
- does not consult consumer and therefore may not be what they want
- new business ventures cannot be confident the product will be a success without market research
- cannot compete successfully
Define market orientation
When the consumer is the most important factor when providing products for the market
Advantages of market orientation?
- respond quickly to changes in the market
- stronger position to meet the challenge of new competition
- anticipate market changes
- confidence in success of new product launch
- expand product portfolio
- celebrity endorsements
Disadvantages of market orientation?
- requires constant and continuous market research to keep up with trends
- requires products to be flexible
- some products are only market orientated to an extent (technology may limit this)
- increases costs - production/labour - may decrease profit margins
Define market research
Involves gathering and analysing information about the marketing and consumption of goods and services
What is primary research?
The collection of information first-hand for a specific purpose
What is secondary research?
The use of information that has already been collected
Examples of primary research?
- focus group
- test marketing
- observation
- personal interview
- surveys
Examples of secondary research?
- government publications
- loyalty cards
- internet
- competitors
- trade journals/ industry publications
- research agencies
Benefits and drawbacks of primary research?
Benefits: Up to date and detailed, meets specific needs of researchers, researchers have a good level of control
Drawbacks: Can be expensive, time-consuming and difficult to collect/analyse, issues with validity
Benefits and drawbacks of secondary research?
Benefits: Information is readily available and therefore quicker to collect, generally inexpensive , can gather data from a range of sources easily
Drawbacks: May have been gathered for a different purpose therefore may not be relevant or specific to the businesses needs, may be out of date, may be difficult to obtain as it may not exist or be accessible, difficult to know if data was gathered accurately
What is sampling?
The process of choosing the right people to be apart of the research
What is sample size?
The number of people who are interviewed during the research
What is bias?
When the research findings cannot be trusted because of the way the research has been carried out
- e.g.
- interviewer bias (leading questions)
- biased questions
- respondent bias (consumer already uses different product)
Define qualitative research
based on feelings and thoughts gathered by: -interviews -focus group discussions -observations of buyer behaviour
Define quantitative research
fact based and numerical
usually closed-ended questions
Benefits + drawbacks of qualitative data?
Benefits: products more relatable to target audience, business can understand why things need to be changed, helps business come up with new ideas
Drawbacks: expensive as they may pay someone to go through large amounts of data, bias as the consumer may already be loyal to another business, time consuming as it is harder to analyse
Benefits + drawbacks of quantitative data?
Benefits: easier to analyse, quicker for consumer to complete, less expensive to carry out, larger sample can be collected
Drawbacks: no explanation, bias could alter accuracy of numerical data, could be miscounted, bad design may be unreliable
Define market segment
Identifiable group of individuals or a part of a market where consumers share one or more characteristic or needs
What are examples of market segments?
- location
- lifestyle
- income
- age
- gender
Define market positioning?
When launching a new product or service, companies need to decide where exactly they want to position the brand in relation to customer perception and the positioning of competitors
