1.1 Meeting customer needs Flashcards
What is mass marketing?
Attempt to create products or services which have universal appeal
What is niche marketing?
It is a very small segment of a much larger market
What’s one characteristic of a mass market?
Has a long lasting, wide appeal that spans age groups and genders
What’s one characteristic of a niche market?
Has higher unit costs but can charge a more premium price
How does competition affect the market?
Competition stops businesses from getting careless and complacent, eg. low competition means companies can charge high prices
What is a product orientated approach?
An approach which develops products based on what the companies good at doing and more focus on quality and design performance
What is a market orientated approach?
An approach which responds to what customer want and works on meeting their preferences
Advantages of a product orientated approach
- Can lead to increased economies of scale
- Business can focus on what it does best
Advantages of market orientated approach
- As products designed for customer needs, higher chance of success
- Increased customer loyalty and satisfaction
What is primary market research?
Involves collection of first hand data by the business
What is secondary market research?
Involves collection of second hand data/data that already exists
Advantages of primary market research
- Directly focused on research objective
- Not publicly available, can be a competitive advantage
Disadvantages of primary market research
- Time consuming and costly to obtain
- Potential bias risk
Advantages of secondary market research
- Often free and easy to obtain
- Good source of overall market insight
Disadvantages of secondary market research
- Not specific to business needs
- Available to other businesses
What is quantitive market research?
Research based on data and statistics
What is qualitative market research?
Research based on opinions, attitudes and beliefs
Advantages of quantitive market research
- Data relatively easy to analyse
- Numerical data can provide insights to trends
Disadvantages of quantitive market research
- Focuses on data, so doesn’t answer the reasoning of certain trends
- May lack reliability if sample size and method isn’t valid
Advantages of qualitative market research
- Key for new product development and launches
- Produces insights into consumer behaviour
Disadvantages of qualitative market research
- Expensive to collect and analyse
- Based on opinions, always a risk sample isn’t representative
What is sampling?
Gathering of data from a selection of respondents, which should be representative of the whole population
Advantages of sampling
- Even small sample size can provide good insight
- Using it before making marketing decisions can reduce costs and risk
Disadvantages of sampling
- If sampling is unrepresentative of population can lead to incorrect decisions
- Risk of bias
What’s one way in which ICT can support market research?
Social media can offer info on consumers attitudes to a product
What is market segmentation?
Dividing a market into different groups that reflect customers needs and wants
Advantages of market segmentation
- Focuses resources on areas of the market where a business can succeed
- Allows business to grow share in a market
Disadvantages of market segmentation
- Doesn’t mean you can reach the customers in the segment
- Markets and segments increasingly dynamic
