1.1 Meeting Customer Needs Flashcards
What are the advantages of mass markets?
Large scale
Economies of scale
Capital intensive
High revenues
What are the disadvantages of mass markets?
Highly competitive and saturated
High costs
Low flexibility
What are the advantages of niche markets?
Premium price
Target customers
Small scale creates flexibility
Less competition
What are the disadvantages of niche markets?
Risky
Demand not constant
No economies of scale
What does online shopping involve?
High quality, user-friendly website
Carefully targeted audience
Personalised
Mobile capabilities
Integrated sales channels
What are the advantages of online shopping?
Detailed information about customers
Easy to build relationships
Greater contact
Social media important
Global
How does competition lead to dynamic markets?
Pressure to provide innovative goods and services
Need to drive costs down and have competitive prices
Need to maintain high-quality products
What is product orientation?
Product developed based on knowledge, skills, and systems that can support the product.
What is market orientation?
Product developed around customer wants/needs.
What are the main findings of market research?
Trends and characteristics
Consumer profiles
Market share
Existing products
Forecast sales
Quantify demand
What are the caveats of primary research?
Expensive
Time-consuming
What are the caveats of secondary research?
May not directly relate to the business itself.
How can ‘ICT’ be used to support market research?
Company websites gather information on shoppers.
Retailers can buy data from firms.
Database technology provides vast quantities of information.
What is market segmentation?
Dividing the market into identifiable submarkets with their own characteristics.
What is market targeting?
Deciding which segment a business wants to operate in.
What is market positioning?
Where a particular brand stands in relation to other brands in the market.
What are the limitations of market research?
Sampling is used as it is impossible to cover a full subject.
Sample bias.
Sample size may be too small.
What are the benefits of the segmentation, targeting, positioning process?
More effective marketing
Resources will be used more effectively
Sales and market share increase
What are the drawbacks of the segmentation, targeting, positioning process?
May overlook a potentially profitable segment.
Changes in taste and fashion overlooked.
What factors influence target market and positioning?
Nature of product.
Degree of competition.
Consumer attitudes.
What is market mapping?
A diagram identifying all products in a market using two key features.
What is the purpose of market mapping?
Enables a business to establish the position of its product in the market.
Reveals where the competition is.
May identify gaps in the market.
What is the aim of product differentiation?
Insulate the product from actions of competitors.
Allow increased prices without demand dropping.
What factors can enable differentiation?
Price
Features
Customisation
Reliability
Quality
Durability
Performance
How can value be added to a product?
Converting raw materials into finished goods.
Brand image
Packaging
Good service
Guarantees
