1.1 - markets Flashcards
What are the 4 Ps of markets?
Product
Promotion
Price
Place
What is sales volume?
The number of items sold
What is sales value?
The financial worth of all the items sold
What is market share?
Proportion/percentage of total sales of a product or service achieved by a specific brand
What is the formula for market share?
Market share = ( brand_sales / total_sales ) * 100
What is a mass market?
A product that is aimed at everyone
Example: McDonald’s
What are the advantages of a mass market?
- High brand awareness
- Low production costs
- Large customer base
What are the disadvantages of a mass market?
- High, fixed capital cost
- Competition
- Hard to add unique value
What is a niche market?
Products aimed at a very specific group of people
Advantages of a niche market?
- Can sell for a higher price
- Dedicated customer base
- Less competition
- Easier to react to changes
Disadvantages of a niche market?
- Smaller customer base
- More expensive to produce
What is branding?
The process of differenciating a product from the name/sign/symbol/design or slogan
What makes building a brand hard?
It is time consuming and very expensive, it also relies on the customer’s constant exposure to the firm’s product.
What are the benefits of branding?
- High brand recognition
- Increased demand
- Increased price
- Reduced competition
- Protection against recessions
What are dynamic markets?
Markets that are subject to continual and rapid change.
How do you adapt to change?
- React to trends
- React to legislation
- Multi-skilled staff
- Market research
- Investment into R&D
- Develop a niche
- Continuous improvement
How does competition effect customers?
- Competitive prices
- More choice
What is good about online retailing?
- 24/7 service
- Larger target market
- Convenience
- Lower O/H costs, no shop rent
- Easier to gather personal info
- Afford greater flexibility
- Global movement
- Easy to adjust prices for inflation
What is product orientation?
Focus on the products, not the consumers. Develop wants for the consumers
What is market orientation?
A focus on the market, respond to customer needs and wants
What are the aims of market research?
- Identify and anticipate needs and wants
- Quantify likely demand
- Provide insight into consumer behaviour
What is market research?
Gathering, presenting and analysing data
What is primary research?
Information that did not exist before the company started it.
Top methods of primary research
- Questionnaires
- Telephone interviews
- Personal interviews
- Focus groups
What is secondary reseaerch?
Collecting data that was already available before the company started research.
Advantages of Primary Research
- More accurate
- Controlled environment
Disadvantages of Primary Research
- Expensive
- Time consuming
Advantages of Secondary Research
- Quick to complete
- Cheaper
Disadvantages of Secondary Research
- Data may be inaccurate
- May find patterns in the data that do not exist
What are the two types of secondary data?
- Internal Data
- External Data
Internal data comes from?
Internal documents (inside the business) or previous studies conducted by the business
External data comes from?
Outside the business, individuals or organisations that have collected data for their own reasons (repurposed)
What is the use of IT resources for?
Using the internet to gather data outside of the business, link to secondary research
What does human behaviour do to research?
We may not be fully honest to be kinder, human nature
What is sampling and bias?
Gathering data from a group of respondents that may not reflect the general public
What is sampling and bias known as?
Sampling discrepancy
What is market segmentation?
Dividing the market up and grouping consumers with similar needs
What is demographic segmentation?
Changes through age, gender, income, ethnicity
What is geographic segmentation?
Region, country
What is psychographic segmentation?
Attitudes, opinions and lifestyles
What is behavioral segmentation?
Usage rate and loyalty
What are the benefits of segmentation?
- Stop wasting money
- Extend into new markets
- Change price to meet the income
- Meet customers needs better
- Increase sales, due to fitting customers desires
- Adapting marketing pricing for areas or people
What are the disadvantages of market segmentation?
- Costs a lot
- Hard to complete and not always accurate
- May lose out on potential sales
What is market positioning?
Where your product or brand stands in relations to the products of other businesses.
Example of repositioning
Lucosade, changing from a health drink to a fitness drink
What is risk?
Where the owners take actions that have unknown outcomes
What is uncertainty?
External issues that could influence the business
Examples of uncertainty?
- Economic changes
- Social changes
- Labor growth
- Supply chain issues
- Natural disasters
- War
