1.1 meeting consumer needs

Question 1

market definition

Answer 1

buyers and sellers that trade a particular type of product in a particular place

Question 2

niche marke

Answer 2

where businesses target a smaller segment of a larger marker - where customers have specific needs and wants

Question 3

mass market

Answer 3

• products in the mass market are aimed at a large group of buyers
• product has a wide appeal and useful to a variety of people

Question 4

examples of mass and niche market for chocloate

Answer 4

• mass - cadbury - wide range of products which appeal to wide range or customers
• niche - Moo Free - dairy free chocolate

Question 5

pros and cons to mass market

Answer 5

PROS
- sells to more consumers than niche - higher sales volume
- larger production can reduce costs per unit, leading to higher profits.
- larger market size
CONS
- more competition - many businesses targeting the same consumers
- no brand loyalty

Question 6

pros and cons to niche market

Answer 6

PROS
- less competition
- specialised products so can charge higher prices
- customer loyalty
CONS
- risky bc selling to a smaller number and narrower range of customers
- vulnerable to market changes ‘all eggs in one basket’

Question 7

market size definition

Answer 7

total value of sales in a market over a certain time period (total number of consumers)

Question 8

market share definition and formula

Answer 8

the proportion of the total market that the business holds
- (their sales/ total sales in the total market) x100 = %

Question 9

branding in mass markets

Answer 9

• essential to make their brand distinctive
• logo, name, statement
• recognisable

Question 10

dynamic market definition

Answer 10

market changes and evolves rapidly

Question 11

reasons for a dynamic market (how they change)

Answer 11

• CONSUMER PREFERENCES - trends/technology etc
• INNOVATION - new products emerge eg digital cameras grew and old polaroids declined
• COMPETITION - competitors can enter or leave the market
• LAWS - changes to legalisation eg tax on sugary drinks means a change to product so dont have to pay tax

Question 12

pros to online retailing

Answer 12

• businesses costs lower - no rent/ staff
• order at any time, anywhere in the world
• customers can compare prices easily - find cheapest option
• eaisly create deals/discounts - appeals to customers

Question 13

cons to online retailing

Answer 13

• more competition
• cannot physically see product - might not fit/wrong material etc
• cannot speak to staff - less personal/ efficient customer service
• personal details could be leaked

Question 14

examples of dynamic markets

Answer 14

• film industry —> Netflix
• taxi services —> uber
• camera market —> iphone

Question 15

direct competition definition

Answer 15

2+ businesses sell SIMILAR products that appeal to the same group of customers - eg Aldi and Tesco

Question 16

INdirect competition definition

Answer 16

2+ businesses sell DIFFERENT products for the same group of customers - eg italian and india resturants compeat for anyone wanting a takeaway

Question 17

what does competition affect and how - PPPP

Answer 17

• PRODUCT - good quality, distinctive, unique, innovation
• PROMOTION - promotional campaigns, advertising, branding, events
• PRICE - cheaper than competitors - using competitive pricing stragtegies
• PLACE - easy access - online, apps

Question 18

how does competition affect the nature of ownership

Answer 18

can be a sole trader and change to operate as a franchise - use name, idea and reputation of an existing buisness

Question 19

risk definition

Answer 19

• the possibility that something will go wrong
• CONTROLLABLE
• before making a decision, businesses can consider the probability of negative outcome and try to minimise this

Question 20

uncertainty definition

Answer 20

• unpredictable and uncontrollable events that affect a business
• UNCONTROLLABLE

Question 21

product orientation

Answer 21

• focuses on design, quality and performance of the product rather than what consumer actually wants
• creates new and innovative products that they HOPE consumers like and buy
• eg apple and new iPhones

Question 22

market orientation

Answer 22

• selling products that match customer preferences
• invests lots into market research to find out what the customer wants
• charges higher prices bc its tailored to what customers want
• low risk - based on customer feedback

Question 23

reasons why market research is important

Answer 23

• finds out NEEDS and WANTS and anticipates them for the future
• allows businesses to predict how much demand there will be for products therefore how much it will need to supply
• find out if they buy more online/in-store
• identify competitors
• find SLEPT factors (social, legal, economic, political, technological)

Question 24

quantitative market research

Answer 24

numerical statistics eg multiple choice questionnaires
- quicker
- easier
- can be statistically ananlysed
- CLOSED QUESTIONS

Question 25

qualitative market research

Answer 25

- opinions of consumers - eg 'how did this product make you feel' - OPEN QUESTIONS - more informative and flexible

Question 26

what is primary and secondary market research

Answer 26

primary - businesses gather new data secondary - using data already available

Question 27

types of primary market research

Answer 27

- questionnaires - surveys - interviews - test marketing (launch a product in certain area and record response) - sampling

Question 28

pros and cons to primary research

Answer 28

pros - good for niche markets - competitors cannot benefit from it - essential for a new product bc there wont be any secondary research - specific for purpose cons - labour intensive - slow - £££££££

Question 29

types of secondary market research

Answer 29

- government publications - Internet sources - Statista - trade magazines - market reports

Question 30

pros and cons to secondary market research

Answer 30

pros - easier - faster - cheaper cons - unsuitable - out of date - may be errors

Question 31

samples - niche vs mass

Answer 31

- new buisness in niche is RISKY so should spend more on accurate sampling - business launching product in competitive needs to do less sampling bc it knows that the product is needed by consumers

Question 32

what could and couldn't causes BIASES in market research

Answer 32

bias - interviews (personality of the interviewer and person being interviewed) not bias - anonymous questionaires

Question 33

ICT (information and communication technology)

Answer 33

- helps market research - easier, cheaper, quicker - more info and wider audience - EG webistes, social networking and data bases

Question 34

ICT 1 websites - pros and cons

Answer 34

pros - analyse what times of year/day website is used most - what people are clicking on when they r on the website - how much people are likely to spend on the website - you can look at competitors websites - read reviews cons - if ppl dont buy the product we dont know why

Question 35

ICT 2 social networking - pros and cons

Answer 35

pros - firms can post content on social networking sites and monitor their response - quick and cheap - track current trends - eg Facebook, hashtags, tiktok etc cons - not all consumers use the sam social media eg less older ppl on tiktok - dif results

Question 36

ICT 3 databases

Answer 36

- eg loyalty cards - businesses can see names/adreeses and preferences of consumers

Question 37

segmentation definition

Answer 37

dividing a market into a group of buyers based on characteristics such as hobbies or age

Question 38

4 different ways to segment a market

Answer 38

- demographic segment: age/gender/socio-economic class - geographic segment: city/county/country - income segment: DIOR makeup is targeted at high income and Superdrug at low - behavioural segment: amount of use/hobbies/lifestyle

Question 39

pros and cons to market mapping

Answer 39

pros - reveals gaps in the market - close competitors - help make pricing strategies cons - based on opinion sometimes - simplifies things too much