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Business > 1.1 > Flashcards

1.1 Flashcards

1
Q

Niche marketing

A

Where a business targets a smaller segment of a larger market, where customers have specific needs and wants.

Advantages
Less competition
Clear focus- target particular customers
Builds up specialist skill and knowledge
Can often charge a higher price
Profit margin often higher
Customers tend to be more loyal
compete on quality/customisation = USP

Disadvantages
Lack of economics of scale
Risk of over dependence on a single product or market
Vulnerable to market changes
Niche must be large enough to support profitable business otherwise the revenue generated is not high enough to cover the costs of operating.
Limited number of potential customers

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2
Q

Mass marketing

A

Where a business sells into the largest part of the market, where there are many similar products offered by competitors.

ADV
Leads to high sales, mass production and lower costs to higher profits
Economies of scale (purchasing)

DIS
Highly competitive
May have to compete on price
Requires large investment into marketing
Cant focus on customers needs and wants

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3
Q

Market size

A

Measure of the total variable demand for competitors in a market, used to calculate market shares.

total unit sales x average price

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4
Q

Market growth

A

Market growth measures the rate of change of market size, measured by the increase in demand for a specific product.
change in size of market/ original size of market x 100

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5
Q

Market share

A

The percentage of sales in a given market for which one or more firms are responsible for.
sales of business/total sales in the market x 100

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6
Q

Brand definition

A

A brand is a unique design/sign/symbol/words/logo which makes it recognisable/distinguishes or differentiates it from its competitors

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7
Q

Brand key points:

A

• An identity for the business
• Consumers link expectations to a brand e.g.
quality, satisfaction
• A brand is a trademark that cannot be copied
• Branding add value to a product allowing firms
to charge higher prices
• Branding creates brand loyalty whereby
customers will continue to buy products from that firm

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8
Q

Benefits of building a brand:

A

• Brands help build loyalty and repeat business
• Adding value allowing businesses to charge higher prices
• Brand extension: Adding new product ranges to a recognised brand name
• Once a brand is established, less money can be spent on advertising.

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9
Q

Dynamic market

A
  • Markets that are always changing and have to adapt over a short period of time.

adapting advs:
keep up with customer needs and taste changes
increase product range/innovation
sustain completeness

dis:
might e short term change
expensive
may not be successful, already otehr competitors who specialise

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10
Q

Dynamic market affected by

A

o Social trends
o Changes in technology
o Competitive environment
o Consumer tastes

• Businesses have to adapt their marketing in response to these changes
• A business that fails to keep up with trends in the market will soon lose competitiveness.
Competitiveness: A businesses ability to compete successfully.

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11
Q

Online retailing/ e-tailing

A

The retailing of good online

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12
Q

Benefits of online retailing

A

More access from people 24/7
Some people can’t physically get to shops, distance too long
Lower costs, not as many staff wages
Easier to get customer info and target products and offers
Can be updated easily, deal of the day etc

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13
Q

What is e-commerce?

A

Conducting business transactions online

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14
Q

Innovation and market growth

A

Innovation means bringing a new idea to life, such as launching a new product or service onto the market. Innovation can help a business gain market share, but can also spur market growth.

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15
Q

Why does variety occur in new markets?

A

Economic growth- more disposable income leads to growth
Innovation- new products, cartoons or improvements
Social changes - fewer marriages, more single parents
Changes in legislation- ban of smoking

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16
Q

How do business adapt to change?

A

Flexibility- having flexible culture, multi skilled staff, machinery
Market research- this should be ongoing with current and potential customers
Investment- in new products
Continuous improvements- in all aspects, better customer service means repeat purchases

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17
Q

Competitive Advantage

A

• The ability of a business to add more value for its customers than its rivals and attain a position of relative advantage
• A situation where a business has an advantage over its competitors by being able to offer better value, quality and/or service

18
Q

Market research

A

Market research is the process of collecting and analysing information, ideas, and data. The two main forms are primary and secondary, data can be classed as qualitative or quantitative.

19
Q

Primary research and secondary research

A

New info collected first hand, collected by business first hand or specialist research
questioners and surveys, hall tests, experiments

Existing info collected by someone else, info within the business or info outside the business
newspapers, internet, sales records

20
Q

Advantages and disadvantages to p+s

A
21
Q

Qualitative and quantitative data

A

Qualitative is info collected by obtaining peoples opinions, judgments and attitudes
Quantitative is data that can be expressed as numbers and statistically analysed

22
Q

Adv and dis of qualitative data

A

Essential for important new product development and launches
Focused on understanding customer needs, wants, expectations = very useful insights for a business
Can highlight issues that need addressing e.g. why customers don’t buy
Effective way of testing elements of the marketing mix - e.g. new branding, promotional campaigns

Expensive to collect and analyse requires specialist research skills
Based around opinions - always a risk that sample is not representative

23
Q

Adv and dis of quantitative data

A

Data relatively easy to analyse
Numerical data provides insights into relevant trends
Can be compared with data from other sources (e.g. competitors, history)

Focuses on data rather than explaining why things happen
Doesn’t explain the reasons behind numerical trends
May lack reliability if sample size and method is not valid

24
Q

3 main ICTin market research and adv

A

1) collecting data through Websites
2) Social Media
3) analysing info in Databases

-can be designed well and easy to use
-Cheap to administer and open 24/7
Easy to collect reviews and easy to view competition and compare
-Comparing can also be easily done by checking prices of using price comparison websites

25
Q

Websites

A

automatically generate customer questionnaires. they can target everyone on homepage or subgroup

  • Invite feedback through blogs
  • Analytics monitor number, frequency and timings of visitors
  • Online polls and surveys

Setting up the programme and the automated data collection takes many hours.
Reliability of findings- could be a bias towards those with time on their hands or towards those who think highly of the product/company.

26
Q

Social media

A

provide interactivity to create bonding between consumer and brand - lead to richer market research findings.
gain a fuller understanding of what customers love about the brand and product range.
Better than simple questions that can be misinterpreted.
fast access to a lot of people, relatively cheap compared to other market research.
time and money to establish

27
Q

Market segmentation

A

Market segmentation is the process of dividing the market into groups of customers with similar characteristics
focuses resources on parts of market where business can succeed
helps with new prod dev
marketing mix more effective promo
markets increasingly dynamic and also segments

28
Q

Types of market segmentation

A

Types of market segmentation include:
 demographic – based on age or cultural background
 geographic – based on the country, region or local area where you live
 psychographic – based on personality and attitude
 behavioural – based on interests or needs.

29
Q

Methods of market segmentation

A

Age, occupation, gender, income, lifestyle

30
Q

Benefits and drawbacks of market segmentation

A

Segmentation is an imprecise science - data about each market segment is not always available, up-to-date or reliable
Just because you can identify a segment doesn’t mean you can reach the
customers in it
Markets are increasingly dynamic - fast-changing; so too are the segments

31
Q

What is a market map?

A

Positioning map typically a two dimension diagram that shows two attributes or characteristics of a brand and those of rival brands in the market.

Using this approach could help in identifying a product or market niche that has not yet been filled.
Gain a better understanding of competition and analysing them.
encourages use of market research.

Just because there is a “gap” doesn’t mean there is demand
Not a guarantee of success
reliability of research.

32
Q

Databases

A
  • you can purchase databases full of customer info
    -business will have large databases to analyse
    -it must meet DPA requirements
    Data mining
    Trends
    Information communication
33
Q

Product vs market orientation

A
34
Q

Limitations to market research

A
35
Q

Competitive advantage

A

The ability of a business to add more value for its customers than its rivals and attain a position of relative advantage

36
Q

How can a sustainable competitive advantage be achieved?

A
37
Q

USP

A

something that sets the business apart and makes it distinguishable from its competitors.

38
Q

Adding value ways

A

Adding value = transformational process where value is added to inputs to create outputs
strong diff that allows to charge higher profits

39
Q

Difference between risk and uncertainty

A
40
Q

market positioning

A

effort to influence consumer perception of brand/product, achieve product differeniation and adding value.

Business (22 decks)

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