1.1 Flashcards
what is a market?
a place where buyers and sellers come together to exchange goods or services
-doesn’t have to be physical
what is mass marketing?
attempt to create products & services that have universal appeal
what is niche marketing?
a small segment of a much larger market, which targets specific customer needs
what are pros of mass marketing?
-large scale production means economies of scale lower average unit cost, can become more competitive due to lower prices and can get higher profit margin
-very simple, everyone targeted equally, simpler research
-large volume of scales = high revenue
-high revive can be put into research & development
what are cons of mass marketing?
-loss of competition
-products need differentiation, can be costly
-high volume production not flexible to changes in demand
niche marketing is a _____ of the main market which addresses a _______ ____/____
eg _______ ______
subset
specialist needs/wants
wedding cakes
what are pros of niche marketing?
-premium prices can be charged
-targeting customers is easier
-small scale production can be flexible & follow trends
-less competitive than mass market
what are cons of niche marketing?
-very risky as demand can be unpredictable & not constant
-higher cost per unit required
what are pros of online retailing?
-reduced costs, from not store & reduced workers
-much larger group of customers can be reached
what are cons of online retailing?
-barrier between business and customers
-can be hard to stand out, marketing can be expensive
the demand for a product determines the _______ of the ______
size
market
what can be the size of a market be measured in terms of?
volume- quantity of goods purchased
value- amount spent by customers on volume sold
market size matters because it is the basis for ________ _____
calculating trends
market growth occurs when the _____ of the market ____
size
increases
if the market is growing this may mean that there are more ___ ________
sales opportunities
it is helpful for fines to know the market share of all other _______ _____ in the market
existing firms
what is market share?
the market share of a firm/brand is the percentage that it has of market sales
if the total sales in the market remain the same but the firm _______ its own sales then its market shares will increase
increases
if the firm maintains the same _____ __ _____ when the market grows its share will fall
level of sales
what is a dynamic market?
one which implies short product life cycles and is highly competitive & is rapidly changing
eg fashion industry
what are four key factors when considering dynamic markets?
-online retailing
—> dynamic & unpredictable, markets growing fast
-how markets change
—> all markets will change & evolve overtime, can change due to affluence (income), can create greater demand, consumers becoming more socially aware, changing population
-innovation
—>new idea to market, may help gain market share or spur growth within market
-adapting to change
—> consumer tastes change, proactive, jump before you’re pushed, research can be expensive, development = expensive, advertising = expensive, research time consuming, life cycle short so have to do it all again, risky
features of dynamic markets?
-competition
-changing customer needs & wants
-technological development
what is product orientation?
when the business focuses on what it is best at producing and selling
what is the problem with product orientation?
it maintains the status quo (the business continues to do what it always does
-this does not anticipate changes in consumers needs, thus may fall behind competitors
what is market orientation?
when a business finds out what the demand is & then meets those needs
-the firm may focus on creating “gimmicks” rather than the reliability or quality of original product & hence lose sales
what are pros of market orientation?
-responding to needs & wants of customers leads to revenue being more healthy
-product may not have to be marketed as heavily, word of mouth with market orientated businesses as its meeting needs
what are cons of market orientation?
-market research to find customers needs and wants is time consuming
-new substitute products may come out which may decrease revenues if the market orientated business
what is market research?
the process of gathering, analysing and producing data relevant to the marketing process
-it gathers info about consumers, competitors, trends & distributors within a firms target market
market research can enable the entrepreneur to move quickly, ______ and _______, to get to where they want
efficiently
effectively
what is market research typically used for?
-identifying market opportunities
-assessing the alternative options open to the business to meet its customer needs
-assessing the effectiveness of different marketing actions
what is primary research?
-research when you collect data that has not been collected before
what are pros of primary research?
-business able to tailor research to what they want to know
-info is available exclusively to that business & competitors can’t access it
-primary research can help businesses understand customer psychology and get an in depth understanding of them
what are cons of primary research?
-can be very expensive, external agencies may have to be hired and it can cost thousands for high quality in depth info
-can be time consuming & strict deadlines may have to be imposed to meet targets
-if research method flawed, research may be inaccurate, can be faded by leading questions or bias interviewer
-research found may not be reflective of the whole market, especially if a small sample size is used
how can primary data be gathered?
-through observation
-through experiment/ test marketing
-through retailers
-surveys/questionnaires
-interviews
-loyalty cards
-focus groups
-consumer panels
what is secondary market research?
research that used data that already exists
what are pros of secondary market research?
-can be cheap or free
-quick and easy to collect
-can date back in time which can be useful for spotting trends and changes
-can provide a good market overview
-data can be checked across multiple sources to verify reliability
what are cons of secondary market research?
-info may be out of date or irrelevant
-bias may play part in research and there is no way to tell as research methods and researchers can be unknown
-some market reposts can be very expensive to buy
what are methods of secondary research?
-the internet
-trade press
-government produced data
-annual reports
-news
-internet gallery
-EU statistics
what is quantitative data?
data expressed in numerical form
what is qualitative data?
data about opinions, attitudes and feelings
quantitative data is usually collected from _____ scale research
large
how can qualitative data be found?
-focus groups
-depth interviews
-sampling
what is random sampling?
people from target population are selected randomly
what are advantages of random sampling?
-lack of bias
-simple & less complicated than other sampling methods
what are disadvantages of random sampling?
-may not be representative
-time consuming to generate lists of the population, potentially a sign numbers to everyone
-can be costly, potential for sampling errors
what is quota sampling ?
target population is segmented into groups that share the same characteristics like age and gender
what are advantages of quota sampling?
-fairly easy to conduct and administer
-cost effective
-representative, can be generalised
disadvantages of quota sampling
-result of research may be inaccurate as many factors affect
-may be biased
what is stratified sampling?
involved the division of a population into smaller sub groups
advantages of stratified sampling
-lack of researcher bias
-produces a representative sample that can be generalised to a population
disadvantages of stratified sampling
-cannot reflect all differences
-time consuming
-costly
what IT is used to support market research and find a great wealth of info on?
-websites
-social media
-databases
market research is never 100% accurate and should always be treated with _____
caution
-market research may not tell us anything meaningful, as may not see potential ______ _______ in a market
leaps forward
what are the main issues with market research?
-sample size
-sample bias
sample size:
-a low number (eg __) will have high change of ______ so may be meaningless
-a mid range number (eg____) should be more meaningful & should be more statistically _____
-sample size of _____ should lead to more statistically ______ results, but would be expensive
-businesses should consider the size of the firm when finding a sample size
10
variation
100
viable
1000
reliable
sample bias:
-even with a large sample size it is possible to get inaccurate findings
-firm will need to ensure it finds a sample that is truly representative of target market chosen
what are things that may affect the bias?
-demographics
-affluence of the area
-are the people representative
