1.1- Meeting Customer Needs Flashcards
What is Marketing?
process involved in identifying, anticipating and satisfying consumer requirements profitably.
What is a Mass Market?
where business sells into larger part of market where there are many similar products offered by competitors
What is a Niche Market?
where business targets smaller segment of a larger market where customers have specific needs and wants
Name 3 benefits of being in a mass market?
-widest potential customer base
-lower risk
-low unit costs
drawbacks of being in a mass market?
-Highly competitive
-Requires large investment in marketing
benefits of being in a Niche market?
-less competition
-profit margins higher
-customers tend to be more loyal
drawbacks of being in a Niche Market?
-vulnerable to market changes
-risk of over dependence on a single product
What is Market Size?
the total volume of a market
- in terms of number of sales or value of sales
Mass markets characteristics
-generic products- similiar in form, function
- customers form majority of market
- needs and wants more general
- higher output and capacity
- low cost, wide distribution
Niche market characteristics
-speciliats products/ services
- loyal customers
- higher profit margins
- lack economies of scale
- can attract competition if successful
What is market share
- the percentage/segment of a market which a business controls
What is the Market Share Formula?
Sales of a business/Total sales in the market x 100
What is a dynamic market
- a market which is constantly changing
Name 3 key sources of change in a dynamic market
-customers tastes and preferences
-impact of tech on what customers buy & how they buy
-impact of new market entrants
How does online retailing impact a dynamic market
-businesses face more competition as customers can easily shop around
-consumers- unable to physically see the products before buying
How does online retailing benefit a market
buisnesses cost
How do markets change
-summarise using PESTLE
PESTLE:
-political- leaving EU- change in importing and exporting
-economic- economic recession- changes in grocery retailing- ppl opted for aldi
-social- increased desire for convenience- ^ in inline retailing
-technological- apps- changed markets
-legal- growth in market for vapes- intro of new laws relating to who can buy them, advertisement, consupmtion
-environmental- car industry facing major changes- minimise damaging impact of exhaust fumes
How does innovation cause market growth
-competing firms continually develop features no rivals offer- so consumer loyalties chnage drastically
-once 1 innovation is successful- companies forced to adaot offerings to keep up with rivals
-so companies try to come up with own innovations to benefit by leading change in makret
Why do businesses have to adapt to change
-identifying subtle changes allows business to adapt to changes to meet customer needs
-changing earlier than rivals- major competitive advantage
Name 4 ways competition affects the market
-need to drive down costs
-need to maintain compeititve prices
-need to devlop innovative prodcuts and servives
-need to maintain high quality products and servivesc
What is product orientation?
-business develops products based on what it is good at doing
What is market orientation?
-business responds to customer needs and wants- designs products accordingly
What is primary research?
-give exazmples
-new research conducted for particular purpose
-surveys
-retailer research
What is secondary research?
-give examples
-pre-existing data gathered for another purpose
-internet
-government statistics
Advantages of primary research
-up to date data
-detailed insights
Advantages of secondary research
-often free
-provides good market overview
Disadvantages of primary research
-expenisve
-risk of bias from imterviewer
Disadvantages of secondary research
-info may be out of date
-can be expensive
What is quantitive data
-factual that aims to be statistically representative of the whole market
What is qualititive data
-opinion- unlikely to be gathered on a alrge enough scale to give statsically reliable data
-designed to give insight into why customers behave the way they do
Name 2 reasons why market research data may be unreliable
-sample size too small- means more chance that respondants who dont reflect overall views of market are over-represented in smaple
-sample bias- way responspendents are selected may cause certain ty[pes of people to be over-represented in the samplke
Name 3 ways ICT supports market research
-websites- can gather data on vistors to website- provide info about online shoppers/ browsers interests
-social media- offer info on consumer attitudes to product/ service
-databases- allows vast quantities of data relating to consumers to be trwled to identify patterns that can explain how consumers behave
What is market segmentation
-splitting up a market into different groups of consumers who share similar characteristics wants and needs
3 benfits of market segmentation
-products and services can be designed to suit specific customers
-meeting customers needs precisely allows a higher price to be charged
-promotional activity is easier to target
What is market positioning
deciding how you want customers to perceive your product
What can market maps show
-gaps in the market
Why are market maps beneficial for businesses
-by using a market map businesses can identify a gap in market
-they can then produce a product that matches the gap identified
What is competitive adavnatge
circumstance that puts a company in a favourable/ superior business position.
Name the 2 major generic routes to finding a competitive advantage
-being lowest cost producer
-finding a sustainable point of differentiation
What is product differentiation
differentiating a product from others in the market to make it more appealing to the target audience.
What are the purposes of product differentiation
-insulating products from actions of competitors
-allowing prices to be increased without a major fall in demand/ sales
What is added value
-difference between the cost of brought-in goods and services and the selling price of a product
Why is added value good for a business
-charge higher prices
- without increasing costs of prodcuing a product will naturally add more value-
- boosts profit margins- as gap between selling price and variable costs widens
What is a market
where buyers & sellers meet to exchange goods/ services
Name 2 aims of a mass market
-create products with universal appeal
-exploit economies of scale
What is innovation
putting a new idea/ approach into action
Name 3 benefits of innovation
-higher prices
-^ market share
-improved quality
What is uncertainty
unpredictable & uncontrollable events that affect business
What is risk
possibility things will go wrong
Name 3 reasons why market orientation is crucial to marketing success
-markets are much more dynamic
–customers are becoming much more demanding
-barriers to market entry are getting lower
What is market research
process of gathering data to help a business develop a product to meet customer needs
What is monopoly power
large business which dominates the market
