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Business---------------------------- > 1.1 - Meeting Customer Needs > Flashcards

1.1 - Meeting Customer Needs Flashcards

1
Q

What are some drawbacks of being in a mass market?

A

-Highly competitive
-Requires large investment in marketing –> in 2013 Coke spend $3.3bn on global marketing

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2
Q

What are some benefits of being in a Niche market?

A
  • Opportunity to charge higher prices
    -First in the market advantages
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3
Q

What are some drawbacks of being in a Niche Market?

A

-Risky for a business in a small market
-Vulnerable to large businesses entering the market ( who can also afford to charge lower prices)

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4
Q

What is the Market Share Formula?

A

Sales of a business/Total sales in the market x 100

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5
Q

What can the Market Share Formula be used in comparison with?

A
  • compared to last years figures
  • compared to market shares in other countries
  • compared to competitors
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6
Q

What can businesses do with market share information?

A

-Set new objectives
-replicate what the market leaders are doing

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7
Q

What may branding be used for?

A

-differentiate the product from there rivals
- create customer loyalty
-help product recognition
- develop an image
-charge a premium price when brand becomes strong

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8
Q

When do new markets occur?

A

-with a brand new product e.g. flat screen TVs, mobile phones
- In ‘emerging markets’ –> BRICS/ MINT Market

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9
Q

What does BRICS stand for?

A

-Brazil
-Russia
-India
-China
-South Africa

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10
Q

What does MINT stand for?

A
  • Mexico
  • Indonesia
    -Nigeria
  • Turkey
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11
Q

Why does Growth occur in new markets?

A
  • Economic Growth –> more disposable income leads to growth
  • Innovation –> new products the tablets or 3D printers, but also variations/ improvements i.e. Click and Collect
    -Social changes –> fewer marriages, more single parent families
  • Changes in legislation –> e.g. ban on tobacco advertising and smoking in public places
    -Demographic changes – its growing also other people
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12
Q

How do businesses adapt to change?

A

-Flexibility –> having a flexible culture , with multi-skilled staff, flexible machinery and operations
-Market research –> this should be ongoing with current and potential customers
- Investment –> in new product development and also in training and new, flexible machinery
-Continuous Improvement –> in all aspects, more efficiency - saves money better customer service - means repeat purchases
- Develop a niche –> if that market does change and you cant specialise in what you do do e.g. Harley Davison

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13
Q

How do businesses deal with competition?

A
  • some businesses may decide to take over their competition
  • they may try ways to beat competitors e.g. big advertising campaigns, Laws are in place to stop unfair competition
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14
Q

Who benefits from competition?

A

-customers benefit from this competition as they get more choices
- Government –> when competition doesnt exist they can be exploiter, High prices and little innovation

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15
Q

What are external factors which could impact a businesses?

A

-Competition
-Consumer tastes change because of a social trend
- New government legal policies
- New technology
-Natural disaster i.e. floods
- The economy going into a recession

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16
Q

What is a Product-Orientated business?

A

more historical businesses, they make products they think customers will want to buy and that will sell well

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17
Q

What is a Market-Orientated business?

A

This business is one which continually identifies, reviews and analyses customer needs, they must address the marketing mix

18
Q

How does Market-Orientated businesses have advantages over product orientated businesses?

A

-it can respond move quickly to changes in the market
-it will be in a stronger position to meet challenger of new competition entering the market
-it will be more able to anticipate market changes
-it will be more confident that the launch of a new product will be a success

19
Q

What makes a business become product or market orientation?

A

-The Nature of the product–> new technologies, customers pharmaceuticals - product-based
-Policy decisions –> is the business objective market share or safety
- The views of those in control –> an engineer or marketer
-The nature and size of the market –> if production costs are high - market orientated to ensure you’re launching a product costumers want
- The degree of competition –> highly competitive - market

20
Q

What are disadvantages of market research?

A
  • time-consuming
    -expensive
    -telephone –> if they know their home they are going to be less honest
    -human behaviour
  • postal surveys–> people may not reply
  • consumer panel –> need to gather a wide range of people
21
Q

What can Market Research tell a business?

A
  • what features customers what
    -how much they are willing to pay
    -where they shop
    -what age and gender they are
    -who the main competitors are
    -if the market is shrinking or growing
22
Q

What is Primary research?

A

the gathering of new information, called primary data, which has not been collected before

23
Q

Examples of Primary research…

A

-Questionnaires and Surveys
-Hall tests
-Observation
-Focus groups
-Experiments

24
Q

What is Secondary research?

A

the process of gathering secondary data, which is information that has already been gathered, such as sales records or government statistics

25
Q

Examples of Secondary Research…

A

-Newspapers
-sales records
-government statistics
- Internet
-market research companies
-office of national statistics

26
Q

Advantages to Primary research?

A

-more accurate
- up to date
-specific to needs
-effective at collecting qualitative data
-direct customer contact

27
Q

Disadvantages to Primary research?

A
  • time consuming
  • high costs
28
Q

Advantages to secondary research?

A
  • quicker
    -costed less money
    -effective at collecting quantitative data
29
Q

Disadvantages of secondary research?

A
  • more general
  • no specific to needs
30
Q

What is Qualitative data?

A

information collected by obtaining people’s opinions, judgments and attitudes

31
Q

What is Quantitative data?

A

data that can be expressed as numbers and can be statistically analysed

32
Q

How does Databases help support market research?

A
  • you can purchase databases full of customer info
    -business will have large databases to analyse
    -it must meet DPA requirements
33
Q

What can happen to a businesses products when the markets change?

A

they can reposition
-Burberry –> Hooligans , to high end
-Aldi –> cheap, best value for money

34
Q

What is a Market Map?

A
  • perceptual map or positioning map
  • typically a two dimension diagram that shows two of the attributes or characteristics of a brand and those of a rival brands in the market
35
Q

What is Product as part of the Marketing Mix?

A

-sell the product customers want–> meet the customer needs
- have the correct attributes and features that customers want
-to differentiate their products from the competition

36
Q

What is Place as part of the Marketing Mix?

A
  • is the way the product gets distributed
  • how it gets from the producer to the consumer
    -Even which shelf the product sits on
    -businesses have to consider the channel they go through e.g. online or through retail stores
    -For examples, a luxury suit might be sold in a upmarket boutique
37
Q

What is Promotion as part of the Marketing Mix?

A

-Promotion is the communication between the business and customers to make them aware of its product as well as:
-advertising
-sales promotions
-sponsorship
-public relationship

38
Q

What is Price as Part of the Marketing Mix?

A
  • the value customers place on the product
  • higher quality products normally charge more
    -Customers are wiling to pay more for special features
    -Price is very subjective because it depends on many factors such as commodity prices and the price set by competitors
39
Q

Why arent Market Maps useful?

A

-is only 2D and require lots of primary research (expensive)

40
Q

What is the purpose of differentiation?

A

-Trying to get your product to stand out, giving it a competitive edge
- It could be as simple as the packaging trying to give perceived difference or advertising
- Charge a premium price
-Stand Out
-Extend product range
-Overcome competition - aim gain market share, with large scale business, you can lower costs and gain more Economies of Scale

41
Q

How to add value to a Product or service?

A

-Bundling - offering a package
-Good Customer service
-Speed of response to customers e.g. dry cleaning
- Packaging
-Frequent buyer offers –> reward cards
-Customisation - putting a customers logo or brand in the product

Business---------------------------- (22 decks)

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