1.1 Meeting Customer needs Flashcards
what is the mass market
aimed to the general market
what is the niche market
subset of main market and addresses a specialist need
whats a mass market characterist
a product sold to all customers in the same way
(well established brands)
mass market pros
economies of scale
everyone is equally targeted
increased sales= increased revenue= research and development
mass market cons
lots of competition
homogenous products need to be differentiation through marketing= expensive ( USPs important)
niche market characteristic
subset of main market and caters to a particular segment of the market
niche market pros
charge premium price
easier to target customers
small scale production= flexible to trends
less competition
niche market cons
demand may not be constant
higher unit costs= no economies of scale
what is a dynamic market
one that is always changing ,developing, expanding and offering new products to customers with new ways to shop
provided for the constant changes in consumer wants and needs in the market
how can market size be measured
volume of sales
OR value (spent by customers)
competitive market
benefits the customer as there is a a lot of products to choose from
- businesses need to be very efficient and listen to consumer wants and needs
competition in homogenous market = non price factors need to be unique
primary research + secondary research
original data that helps the business make specific decision (survey, loyalty cards, observation)
existing data
(previous annual reports, internal data, government sources, news
product and market orientation
product: developing products based on what it is good at making rather than what consumer wants.
market: creating products to satisfy customers
collecting market researcher
Collecting data: communication between customers to meet demand
Asses potential demand
Which promotions would best suit a launch
Asses competition
Build a customer profile
Pros:
Reduces risks and poor decision making
Develop a market plan
React to and prepare for changes
See opportunities for growth
market segmentation
a process companies use to break their potential customers into different sections.
-Demographic
-Geographic
-Salary
-Gender
-Age
-Religion
differentiation from rivals
To fill a gap in the saturated market
Consumers must be able to perceive this difference and may be willing to pay a premium price for the product
Reputation (word of mouth)
Customer service ( reviews)
Value of money
Product features
adding value
Difference between the price that is charged to the customer and the cost of inputs to create the product
Design- develop new technology/ design features to make a unique product
Production- achieving quality (higher price) and efficiency (lower costs)
Marketing- creating an image that makes the product more desirable
Convenience- if the product is accessible without struggle
adding value pros
Pros:
Better reputation
Higher profit margin as higher price can be put in place
Protection against competitors offering a lower price
competitive advantage
cost - business has a skilled workforce and efficient operations to provide low cost value to consumers
Differentiation: resources are used by a business to create a superior value for the consumer
calculate market share
business revenue / Toal industry revenue x100
how can markets change
PESTLE
political
economic
social
technological
legal
environmental
limitations to market research
sample size is too small
sample bias ( sample not generalisable to total population)
benefits of market segmentation
- products designed to suit specific customers
- meeting customer needs = higher prices can be charged
- promotional activity is easier to target
market positioning
business decides what image they are trying ti create for product compared to rivals
uses market mapping to spot gaps in the market to make it more profitable