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Business A Level > 1.1 Meeting Consumers Needs > Flashcards

1.1 Meeting Consumers Needs Flashcards

1
Q

What is a market?

A

A physical or online place where buyers by goods or services in demand, in exchange of currency from sellers

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2
Q

What are the two ways to measure market size?

A

Sales volume ( quantity of units sold)
Value (sales)

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3
Q

What is market size?

A

Potential sales of a firm

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4
Q

What does market share show?

A

How the overall market is split between existing competitors. It is a good indicator of competitive advantage
The key is to look for significant +/- changes

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5
Q

How is market share calculated?

A

Based on market value, but volume can also be used

Size of each company share (value or volume) / total market value x 100

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6
Q

Wha tsp the equation for market share?

A

(Sales / market sales) x 100

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7
Q

What is a dynamic market?

A

A market that changes. The pace and nature of change varies considerably by market

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8
Q

Key sources of change in a dynamic market:

A
  • customer tastes and preference
  • impact of technology on what customers buy and how they buy
  • impact of new market entrants
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9
Q

dynamic market with businesses with monopoly power

A

might not face the same dynamic pressures as businesses in more competitive markets

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10
Q

what is the aim of marketing?

A

to help identify, anticipate and satisfy consumer needs and wants profitably

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11
Q

what is market research?

A

process of gathering data from consumers which is used to influence the business decisions

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12
Q

characteristics of a mass market?

A
  • Products are less unique
  • Low average costs due large scale production economies of scale
  • Low prices lead to greater affordability & more sales
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13
Q

characteristics of a niche market?

A
  • Products are unique as they’re aimed at narrow market segments
  • High average costs due to small scale production don’t benefit from economies of scale
  • High price make products less affordable, lead to less sales
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14
Q

advantages of online retailing

A
  • access to more consumers
  • Enables longer trading hours,business open 24/7
  • Cheaper to run as it lowers fixed & variable costs
  • collect data by tracking consumer behavior (primary research)
  • Consumers can shop at a time that suits them
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15
Q

disadvantages of online retailing?

A
  • high costs for website development, maintenance, promotion
  • dominated by larger businesses that are well-known
  • High levels of competition
  • lack of contact with customers, dont get desired level of customer service
  • difficult to return products
  • credit card fraud
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16
Q

the effect with Changing market conditions

A

offer new opportunities for firms, but pose threats. The changes cause markets to be dynamic

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17
Q

what is product innovation

A

involves the adaptation or improvement of existing products

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18
Q

what is Process innovation?

A

involves the adaptation or improvement of existing processes

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19
Q

what factors can Market growth be caused by?

A
  • Increasing population sizes can increase demand in markets
  • Increasing incomes can increase demand in markets
  • Changing tastes & preferences can cause the market to grow
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20
Q

how can a business thrive in a dynamic market?

A

Recognizing and adapting to market changes

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21
Q

strategies to adapt to change include:

A
  • Create flexible business structures, in terms of operations & people management
  • Meet customer needs, via market research
  • communicating with customers
  • Invest in staff training, new products and processes
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22
Q

what is direct competition

A

occurs when the business is targeting customers with the same product as a competitor

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23
Q

what is indirect competition

A

when firms sell different products but compete with each other for the customers disposable income

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24
Q

Competition results in many benefits for the customer, such as

A

offer lower prices
better quality products
better customer service

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25
Q

The difference between risk and uncertainty

A

Risk is the potential threat to business success
Uncertainty is when outcomes are difficult to predict

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26
Q

how can risks be internal and external?
how can they be measured?

A

can be from inside the business (internal) or outside the business (external)
They can be measured and prepared for using risk management

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27
Q

what is product orientation

A

marketing that focuses on the characteristics of the product rather than the needs of the consumer

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28
Q

characteristics of product orientations

A
  • creating a product first & then finding a market
  • business thinks the product will sell itself
  • over time your business may move away from what the market is looking for, increasing the risk of business failure
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29
Q

what is Market orientation

A

marketing that focuses on the needs of consumers & uses this to design products that meet customer needs

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30
Q

characteristics of market orientation?

A
  • Consumers are the centre of marketing decisions
  • Products are developed to respond to consumer needs
  • firm will benefit from increased demand & profits, valued brand image as its products are desirable
31
Q

Niche marketing

A

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

32
Q

effective market research will help the business

A
  • reduce risk when launching new products/ entering markets
  • Anticipate future needs and wants of consumers
  • understand consumer behaviour
  • identify competitors potential strengths and weaknesses
33
Q

Mass marketing

A

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

34
Q

Advantages of mass market

A
  • products with universal appeal
  • strong brands
  • exploit eos to get high profits
  • lower risk, resources focused on one large market
35
Q

Niche marketing advantages

A
  • less competition
  • clear focus
  • builds up specialist skill and knowledge
  • premium price
  • high profit margins
  • loyal customers
36
Q

Niche market disadvantages

A
  • lack of economies of scale
  • risk of over dependence on a single product
  • attract competition of successful
  • vulnerable to market changes
37
Q

definition of innovation

A

putting a new idea or approach into action

38
Q

Benefits of product innovation

A
  • high price and profit
  • opportunity to build early customer loyalty
  • increased market share
39
Q

Benefits of process innovation

A
  • reduced costs
  • greater flexibility
  • high profits
  • improved quality
40
Q

insights provided by effective market research

A
  • competitor strategies
  • needs, wants, expectations of customers
  • market segments
41
Q

primary research advantages

A
  • specific
  • relevant
  • up to date
42
Q

primary research disadvantages

A
  • expensive
  • time consuming
  • risk of survey bias
  • sampling may not be representative
43
Q

secondary research advantages

A
  • cheap
  • easy
  • good source of market insights
44
Q

secondary research disadvantages

A
  • old date
  • not specific
45
Q

benefits of qualitative data?

A
  • focused on understanding customers needs and wants
  • highlight issues that need addressing
  • essential for new product development and launches
46
Q

drawbacks of qualitative data?

A
  • expensive to collect and analyze- require specialist research skills
  • based round opinions - sample may not be representative
47
Q

an example of qualitative data?

A

focus group - people who are asked about their opinions towards a product/ service etc…

48
Q

benefit of quantitative data

A
  • data easy to analyze
  • numerical data provides insights into relevant trends
  • can be compared with data from other sources
49
Q

drawbacks of quantitative data

A
  • focuses on data rather than explaining why things happen
  • doesn’t explain the reasons behind numerical trends
  • may lack reliability is sample size and method is not valid
50
Q

what is sampling

A

involves gathering of data form a sample of respondents. the results of which should be representative of the population ( target market) as a whole

51
Q

benefits of sampling

A
  • a small sample (if representative) can provide useful research insights
  • using sapling before making marketing decisions can reduce risks and costs
  • sampling is flexible and relatively quick
52
Q

drawbacks of sampling?

A
  • biggest risk = sample is unrepresentative of population, leading to incorrect conclusions
  • risk of bias in research questions
  • less useful in market segments where customer tastes are frequently changing
53
Q

benefits of using social media for market research

A
  • Source of primary and secondary research
  • Software can highlight customers opinions of the product or brand
  • Surveys easy to set up and analyse results in real-time
54
Q

benefit of using Data Mining for market research

A
  • secondary research
  • Relies on data that is already there
  • Quick & automated
55
Q

What is market segmentation?

A

Market segmentation involves dividing a market into parts that reflects different customers needs and wants

56
Q

How are markets segmented into different categories

A
  • demographic, e.g. age, g,endear, family
  • geographical, e.g. nations, regions
  • behavioural/ lifestyle
  • income
57
Q

Benefits of effective market segmentation:

A
  • focuses resources on parts of a market where the business can succeed
  • allows a business to grow share in markets
  • helps with new products development focused on needs of customers in the segments
  • helps make the marketing mix more effective, e.g. better targeting of promotion
58
Q

Drawbacks of market segmentation:

A
  • data not always , available, up-to-date or reliable
  • you can identify a segment but that doesn’t mean you can reach customers in it
  • markets are increasingly dynamic- fast- changing; so too are the segments
59
Q

Advantages of market mapping?

A
  • helps spots gaps in market
  • useful for analysing competitors
  • encourages use of market research
60
Q

Disadvantages of market mapping

A
  • just because there is a gap in the market doesn’t mean there is a demand
  • not a guarantee of success
  • how reliable is the market research
  • still need further research
61
Q

Possible positions strategies:

A
  • offer more for less
  • offer more for more
  • offer more for the same
  • offer less for much less
62
Q

What is product differentiation

A

Is when customers perceive a distinct difference between your product and the alternatives provided by customers

63
Q

The 3 purposes of product differentiation

A
  • positioning vs competition
  • protect and build a brand
  • add more value
64
Q

Positioning vs competition

A
  • source of competitive advantage
  • ideally hard to copy
65
Q

Protecting and building a brand

A
  • strengthen customer loyalty
  • build intangible value
66
Q

benefits of adding more value

A
  • strong differentiation should allow a higher price
  • high profit margins
67
Q

What is a USP

A

Something that sets out a product apart from its competitors in the eyes of customers, both new and existing

68
Q

Features of USP

A
  • helps make demand more price in elastic
  • higher profit
69
Q

Requirements for effective product differentiation:

A
  • deliver things that are important to customers
  • communicated and visible to customers
  • not easily copied by competitors
  • affordable by the target customers
70
Q

What is value proposition?

A

Businesses deciding how to compete in their target segments

71
Q

Who defines market position

A

Customers, the place a product occupies in customers mind relative to competing products

72
Q

What is marketing (positioning) map

A

Illustrates the range of “positions “ that a product can take in a market based on two dimensions that are important to customers

73
Q

Possible dimensions of a market map

A
  • low vs high price
  • high vs low quality
  • healthy vs unhealthy
  • heavy vs light
  • complex vs simple

Business A Level (12 decks)

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