1.1 Meeting Customer Needs

Question 1

What are the advantages of mass markets?

Answer 1

Large scale
Economies of scale
Capital intensive
High revenues

Question 2

What are the disadvantages of mass markets?

Answer 2

Highly competitive and saturated
High costs
Low flexibility

Question 3

What are the advantages of niche markets?

Answer 3

Premium price
Target customers
Small scale creates flexibility
Less competition

Question 4

What are the disadvantages of niche markets?

Answer 4

Risky
Demand not constant
No economies of scale

Question 5

What does online shopping involve?

Answer 5

High quality, user-friendly website
Carefully targeted audience
Personalised
Mobile capabilities
Integrated sales channels

Question 6

What are the advantages of online shopping?

Answer 6

Detailed information about customers
Easy to build relationships
Greater contact
Social media important
Global

Question 7

How does competition lead to dynamic markets?

Answer 7

Pressure to provide innovative goods and services
Need to drive costs down and have competitive prices
Need to maintain high-quality products

Question 8

What is product orientation?

Answer 8

Product developed based on knowledge, skills, and systems that can support the product.

Question 9

What is market orientation?

Answer 9

Product developed around customer wants/needs.

Question 10

What are the main findings of market research?

Answer 10

Trends and characteristics
Consumer profiles
Market share
Existing products
Forecast sales
Quantify demand

Question 11

What are the caveats of primary research?

Answer 11

Expensive
Time-consuming

Question 12

What are the caveats of secondary research?

Answer 12

May not directly relate to the business itself.

Question 13

How can ‘ICT’ be used to support market research?

Answer 13

Company websites gather information on shoppers.
Retailers can buy data from firms.
Database technology provides vast quantities of information.

Question 14

What is market segmentation?

Answer 14

Dividing the market into identifiable submarkets with their own characteristics.

Question 15

What is market targeting?

Answer 15

Deciding which segment a business wants to operate in.

Question 16

What is market positioning?

Answer 16

Where a particular brand stands in relation to other brands in the market.

Question 17

What are the limitations of market research?

Answer 17

Sampling is used as it is impossible to cover a full subject.
Sample bias.
Sample size may be too small.

Question 18

What are the benefits of the segmentation, targeting, positioning process?

Answer 18

More effective marketing
Resources will be used more effectively
Sales and market share increase

Question 19

What are the drawbacks of the segmentation, targeting, positioning process?

Answer 19

May overlook a potentially profitable segment.
Changes in taste and fashion overlooked.

Question 20

What factors influence target market and positioning?

Answer 20

Nature of product.
Degree of competition.
Consumer attitudes.

Question 21

What is market mapping?

Answer 21

A diagram identifying all products in a market using two key features.

Question 22

What is the purpose of market mapping?

Answer 22

Enables a business to establish the position of its product in the market.
Reveals where the competition is.
May identify gaps in the market.

Question 23

What is the aim of product differentiation?

Answer 23

Insulate the product from actions of competitors.
Allow increased prices without demand dropping.

Question 24

What factors can enable differentiation?

Answer 24

Price
Features
Customisation
Reliability
Quality
Durability
Performance

Question 25

How can value be added to a product?

Answer 25

Converting raw materials into finished goods.
Brand image
Packaging
Good service
Guarantees