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Business Theme 1 Marketing and people > 1.1 Meeting customer needs > Flashcards

1.1 Meeting customer needs Flashcards

1
Q

Define Niche Market

A

Where a business targets a smaller segment of a larger market, where customers have specific needs and wants

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2
Q

Define Mass Marketing

A

Where a business sells into the largest part of the market where there are many similar products offered by competitors

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3
Q

Name key features of a mass market?

A

-Products aimed at broad segments with similar characteristics
-Production on large scale, lower average costs, economies of scale
-Lower prices for consumers but lower profit margins

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4
Q

Benefits of mass marketing?

A

-Wider potential customer base
-lower risk - resources focused on one large market
-Economies of scale leading to high profits
-Market research costs relatively low

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5
Q

Advantages of targeting a Niche Market?

A

-Less competition
-Target particular customers
-Builds up specialist skill and knowledge
-Can often charge higher prices, higher margins
-Customers tend to be more loyal

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6
Q

Drawbacks of targeting a Niche Market?

A

-Lack economies of scale
-Risk of over dependance on a single product or market
-Likely to attract competition if successful

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7
Q

Are Niche products price elastic or price inelastic?

A

Price inelastic - because niche products are fulfilling a particular specialist demand we find demand tends to be more price inelastic

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8
Q

What is market size measured in?

A

Sales volume (number of products sold) and Sales value

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9
Q

What can market growth be calculated using?

A

Calculated using either value ( market sales) or volume (units sold)

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10
Q

What does Market Share explain?

A

Proportion of total sales of a product compared to market as a whole

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11
Q

What is the formula for market share?

A

Market share= Sales of company or product / Total sales of the market X100

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12
Q

Define Dynamic Market

A

A market that is subject to rapid and continuous change

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13
Q

What are the 4 areas to consider when examining dynamic markets

A

-Online retailing
-How markets change
-Innovation & market growth
-Adapting to change

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14
Q

Define Product innovation?

A

Adapting or improving existing products

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15
Q

Define process innovation?

A

Finding more efficient ways of producing existing products, or delivering existing services

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16
Q

Benefits of product innovation:

A

-First mover advantage: higher prices and profitability
-Added value, opportunity to build customer loyalty
-Enhances reputation, increases market share

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17
Q

Benefis of Process Innovation:

A

-Reduced costs
-Improved quality
-Higher profits

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18
Q

Ways competition affects the Market?

A

Directly: When businesses sell similar products
Indirectly: When firms sell different products but compete for customers disposable income

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19
Q

Define risk

A

The potential threat to businesses success can be measured and prepared for using risk management

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20
Q

Define uncertainty

A

The unpredictable and uncontrollable events that affect business

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21
Q

Define Product Orientation

A

Focuses on characteristics of the product rather than needs of customer, creating a product first then finding a market. Risk that overtime product might not be what market are looking for.

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22
Q

Define Marketing Orientation

A

Focus on needs of customers and designs product accordingly. Benefit from increased demand, profits and a valued brand image.

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23
Q

Define Primary Research

A

Direct information from consumers information that’s new and collected firsthand eg surveys, interviews, focus groups

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24
Q

Define Secondary Research

A

Data that already exists and has been collected eg governments reports, competitor websites.

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25
Q

Benefits of Primary Research:

A

-Directly focused on the business
-More detailed insights, particularly into customer view

26
Q

Drawbacks of Primary research

A

-Time consuming
-Risk of survey bias and sample not being representative

27
Q

Benefits of Secondary Research

A

-Easy to obtain and quick to collect
-Lower costs of collection

28
Q

Drawbacks of Secondary Research

A

-Can quickly become out of date
-Not tailored to business needs/ lacks relevance
-Specialist reports often quite expensive

29
Q

Define Quantitative research

A

Numerical data

30
Q

Define Qualitative research

A

Based on opinions, attitudes and beliefs

31
Q

Benefits of Qualitative research

A

-Provides useful insights for a business
-Can highlight issues that need addressing
-Effective for testing elements of marketing mix

32
Q

Drawbacks of Qualitative research

A

-Expensive to collect and analyse
-Based around opinion
-Risk of sample not bing representative

33
Q

Benefits of Quantitative research

A

-Data easy to analyse
-Numerical data provides insights into relevant trends
-Can be compared with data from other sources

34
Q

Drawbacks of Quantitative research

A

-Focuses on data rather than explaining why things happen
-May lack reliability

35
Q

Uses of social media in Market Research

A

-Source of both primary and secondary research
-Software quickly highlights what customers are saying about product/brand
-Surveys easy to set up and analyse

36
Q

Drawback of social media in Market Research

A

-Doesn’t give the complete picture that you need to further your product or service
-Not everyone uses social media, unrepresentative

37
Q

Benefits of IT to support Market Research

A

-Quick and automated
-Huge data sets can be analyse, reduce need for sampling
-Social networking
-Company websites

38
Q

Define Market Segmentation

A

Process of dividing a market based on consumer characteristics eg age, gender, income, location

39
Q

4 main categories of Market Segmenting

A
  1. Geographic
  2. Demographic
  3. Psychographic
  4. Behavioral
40
Q

Geographic segmentation

A

Customer location, region, Urban/Rural, classification

41
Q

Demographic segmentation

A

Age, Gender, Occupation, Socio-economic group

42
Q

Bevavioural segmentation

A

Rate of usage, Loyalty status, readiness to purchase

43
Q

Psychographic segmentation

A

Personality, lifestyles, attitudes, class

44
Q

Benefits of effective market segmentation

A

-Recognises not all consumers are identical
-Products altered to meet different needs of groups
-Less expensive and wasteful
-May increase loyalty if needs are being met leading to recreate purchases

45
Q

Drawbacks of Market segmentation

A

-Difficult to identify a segment
-Requires more detailed market research
-Segment may be small & unprofitable

46
Q

Dynamic Markets: Advantages of online retailing

A

-Access to more customers
-Longer trading hours
-Lower costs

47
Q

Dynamic Markets: Disadvantages of online retailing

A

-High costs of website development
-Online retailing dominated by large businesses
-High levels of competition
-Lack of personal contact with customers
-Hard to get desired level of customer service.

48
Q

How does competition benefit customers?

A

-Lower prices
-Better quality products and customer service

49
Q

What does an absence of competition do to businesses?

A

Reduces incentives for businesses to innovate, be efficient or offer lower prices.

50
Q

Define Market positioning

A

How customers percieve a business and how businesses want custromers to percieve them.

51
Q

Define Market mapping

A

A tool for identifying the position of a product within a market against two axes eg price and quality

52
Q

What does it mean if there is no space left on market map?

A

Indicates market is saturated, high competition & low profits

53
Q

Benefits of market mapping

A

-Allows gaps in market to be identified
-Comparisons can be made between rivals and products
-Simple to construct, visual illustration

54
Q

Drawbacks of market mapping

A

-Gap may exist because its not profitable to fill
-Markets often dynamic and a map only provides insights at a specific point in time.

55
Q

Define Competitive advantage

A

Features of a business the are perceived as superior to rivals by customers. Need to be distinctive (Different from competitors) and defensible (Prevent rials form copying)

56
Q

Examples of competitive advantages

A

-Quality/reliability
-Delivery times
-Ethical stance
-Low prices
-Design

57
Q

Define differentiation

A

The process of attempting to distinguish products from competitors

58
Q

What does strong/successful differentiation help firms do?

A

Helps develop a competitive advantage & USP, increase demand, brand loyalty and allow firms to charge higher prices.

59
Q

Define Adding Value

A

Difference between price that’s charged to the customer and the cost of inputs required to create the product

60
Q

Methods of adding value

A

-Marketing & branding
-Functions & features
-Customer service
-Customisation
-Packaging

Business Theme 1 Marketing and people (5 decks)

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