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A Level Business > 1.1 Meeting customer needs > Flashcards

1.1 Meeting customer needs Flashcards

1
Q

Give the definition of a mass market

A

A large market in which products with mass appeal are targeted.

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2
Q

Give four characteristics of a mass market

A

Lots of competition
Standardised products
Lower prices
Lots of customers- large market size

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3
Q

Give the definition of a niche market

A

A smaller market (subsection), usually within a large market or industry.

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4
Q

Give four characteristics of a niche market

A

Limited competition
Small number of customers (Small market size)
Higher prices
More differentiated/customisable products

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5
Q

What is meant by online retailing?

A

When a business sells their goods and services online/through a website

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6
Q

What are the advantages of online retailing to the customers?

A

More convenient as open 24/7, no travel, delivered to door.

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7
Q

What are the advantages of online retailing to the business?

A

Open 24/7- more sales
May not need a retail store- lower costs
Can sell worldwide- bigger target audience

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8
Q

What are the disadvantages of online retailing to the customer?

A

Can’t try before they buy
May have to pay delivery costs
May be a hassle for returns

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9
Q

What are the disadvantages of online retailing to the business?

A

Cost of setting up the website
May have to process more returns because customers can’t try before they buy

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10
Q

What is meant by a static market?

A

A market that doesn’t experience much change over time.

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11
Q

What is meant by a dynamic market?

A

A market that is ever changing.

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12
Q

What is meant by competition?

A

When two or more businesses act independently to supply goods and services to the same group of customers.

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13
Q

What is meant by direct competition?

A

When businesses produce similar products that appeal to the same group of consumers.

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14
Q

What is meant by indirect competition?

A

Occurs when different businesses make or sell products that are not in direct competition but compete for the same expenditure.

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15
Q

How might firms compete with one another?

A

Product/service offered
Pricing
Distribution- where they sell their product
Nature of ownership
Marketing including advertising

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16
Q

What is meant by risk?

A

Something that can be planned for- probabilities of outcomes are known or at least understood and considered.

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17
Q

What is meant by uncertainty?

A

This is caused by unexpected external factors outside of the business control, even though sometimes these factors can be predictable.

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18
Q

What are the two ways to measure the size of the market?

A

Sales volume
Sales value

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19
Q

How do you calculate market share?

A

(Total sales of the business / Total sales of the market) x 100

20
Q

Define the term product orientation.

A

Product orientation is when a business prioritises a product’s design quality or
performance rather than meeting customer preferences to guide production and
marketing decisions.

21
Q

Define the term market orientation

A

This is when the business prioritises customer preferences when producing or marketing their product/service.

22
Q

Define the term secondary market research.

A

This is data that already exists. Sometimes referred to as desk research.

23
Q

Define the term primary market research

A

This is data that is collected first hand. Sometimes referred to as field research

24
Q

Give five examples of primary research

A

Surveys, Observations, interviews, test marketing, focus groups/consumer panels.

25
Q

Give four examples of secondary research

A

Market reports, government data, internet sources, trade publications

26
Q

What is meant by quantitative data?

A

Quantitative data is numerical and can be analysed statistically.

27
Q

What is meant by qualitative data?

A

Qualititative data is based upon opinions and judgements.

28
Q

What is the purpose of effective market research?

A

Reducing risk
Understanding customer preferences and behaviour
Enabling a business to identify customer needs and wants
Spotting trends in the market
Understanding competitors
Understanding key features of the business environment

29
Q

Give two benefits of gathering primary market research

A

Up to Date
Specific to the business needs

30
Q

Give two limitations of gathering primary market research

A

Expensive
Time consuming

31
Q

Give two benefits of gathering secondary market research

A

Quick
Cheap

32
Q

Give two limitations of gathering secondary market research

A

Out of date
Not specific to the business needs

33
Q

What is meant by sampling?

A

Sampling is a process in statistical analysis where researchers take a predetermined number of observations from a larger population.

34
Q

Define the term bias

A

inclination or prejudice for or against one person or group, especially in a way considered to be unfair.

35
Q

What is meant by market segmentation?

A

Grouping customers who share similar characteristics

36
Q

Give three ways a business could segment the market

A

Age, Gender, income, hobbies/interests, location, ethnic origin, occupation, lifestyle

37
Q

Why might a business segment the market?

A

Narrow down the target audience
Provide a product/service more closely in line with customer needs

38
Q

What is market mapping?

A

Market mapping refers to evaluating business ideas and products/services by
setting out the features of a market or product on a diagram.

Each axis represents two polar features; for example: high quality versus lower quality; mass versus niche market; modern versus traditional; functional versus
aesthetic

39
Q

What is the purpose of producing a market map?

A

To identify a gap in the market

To reposition a product

40
Q

What is meant by a competitive advantage

A
41
Q

Give three ways a business can gain a competitive advantage

A

Price
Adding value
Innovation
Reliability
Quality
Reputation/image
Advertising/marketing/branding
Convenience
Customer service

42
Q

What is meant by product differentiation?

A

When a firm makes their product different to others on the market by giving it distinguishing features.

43
Q

What is meant by adding value?

A

The difference between the price charged and the total cost of inputs required to make a product/service.

44
Q

Give three ways a business can add value

A

Design
USP
Convenience
Quality
Branding

45
Q

What is the main benefit to a business of adding value?

A

Being able to charge a higher price.

A Level Business (4 decks)

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