1.1 Meeting Customer Needs Flashcards
Market
Groups and individuals and organisations that make up the pool of actual and potential customers
Dynamic Markets
Market which is always changing due to trends and evolving customer requirements
Market size
Total value of market in terms of money spent or no. products
Market growth
The % change in the size of a market compared to the previous year
Market Share
The % of the market held by one company or product
Innovation
The development of new products, changes in design of established products
Pros of Innovation
Gaining a competitive advantage
Adding value so that a higher price can be charged
Cons of Innovation
High costs of r and d
High risk of failure
Disruption caused to the way the business operates
Risk of cannibalisation
Pros of Online retailing
Shop open 24/7
Can reach international markets
Low overhead costs
Stock can be easily withdrawn or updated
Flexible
Opportunities for fast growth
Cons of Online retailing
High no. returns
Issues with online security
Competitive Market
IT skills
Risks in a business
Insufficient demand due to poor market research or the reaction of competitors
Poor execution due to poor management and lack of financial control
External shocks
Rewards in business
Increased sales
Profits and Growth
Return on investment for owners
Increased share price
Customer loyalty and Brand recognition
Business plan
Formal statement of goals, risks and rewards etc
Calculated risk
Refer to situations where the business as an idea about the potential outcomes and chances of occurring
Uncertainty
A business doesn’t know what is likely to happen in the future and can not measure and predict outcomes
Market orientated approach
Decisions are taken based around information about customers needs or wants rather than the what the business thinks
Product orientated approach
The business develops products based on what it is good at making or doing rather than what a customer wants
Primary research
New research carried out to answer specific issues or questions
Secondary research
Makes use of information previously researched for other purposes and publicly available
Methods of primary research
Questionnaires
Interviews
Observation
Loyalty Cards
Focus Groups
Test Marketing
Methods of secondary research
Annual reports
Internal data
Gov sources
Trade journals
Market research companies
Market segments
A group of consumers that have similar set of characteristics
How a market can be segmented
Age
Gender
Income
Lifestyle
Education
Geographical
Religion/ Ethnicity
Geographic market segmentation
Where people live e.g. region, post code, urban or rural
Demographic market segmentation
Age, occupation, education, income, gender, family size
Behavioural market segmentation
Looks at behaviour of groups of customers and details on frequency of purchase and loyalty to brands
Psychographic market segmentation
Social class, personality type and lifestyle
Benefits of segmentation
Better matching of customer needs
Enhanced profits for business
Retain more customers
Target marketing communications
Market Mapping
Grid that measures two different aspects of brand or businesses within a market
