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A LEVEL BUSINESS - ALL > 1.1 meeting customer needs > Flashcards

1.1 meeting customer needs Flashcards

1
Q

what is a market?

A

places where buyers and sellers come together to trade goods

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2
Q

why do risks exist?

A

because entrepeneurs commit resources that could be lost

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3
Q

why does uncertainty exist?

A

businesses operate in an ever changing environment and are subject to changing external environments

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4
Q

what does marketing involve?

A

-understanding customer needs
-understanding the dynamics of the market
-developing successful products
-promoting the business and its products

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5
Q

mass market

A

targets a large population of the market with a generic product

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6
Q

main facts about mass markets:

A

-mass production/large scale production
-lots of competition
-lots of promotion needed
-economies of scale

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7
Q

niche markets

A

targets a small population of the market with a specialised product

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8
Q

main facts about niche markets

A

-production on a small scale, sometimes bespoke
-low volumes, high profit margins
-few competitors
-mainly focus on quality and customisation
-

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9
Q

dynamic markets

A

markets that are constantly changing due to aspects such as innovation, economic growth, demographic changes, changes in legislation and social change

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10
Q

how can market size be measured?

A

by value (total amount that customers have spent on products) OR by volume (total quantity sold by businesses)

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11
Q

who are the most successful businesses in a dynamic market?

A

businesses that can adapt and keep up with the changes in the market

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12
Q

how does having low competition affect how a business operates and the experience of customers?

A

business:
-can dominate the market
-set high prices

customers:
-limited choice
-high prices
-poor service

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13
Q

how does having high competition affect how a business operates and the experience of customers?

A

business:
-competitive pricing
-focus on improving inefficiencies

customers:
-lots of choice
-good value for customers
-exciting new product development

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14
Q

which stage of the marketing process is market research?

A

the first

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15
Q

what is they key thing that market research shows?

A

customer needs

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16
Q

the market research process:

A

1) define problem/question

2) develop market research plan

3) collect data

4) analyse data

5) interpret and report findings

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17
Q

questions that market research wants to answer:

A

-who are potential customers
-what do our customers want
-how big is the market, is it growing
-who are our competitors
-what are customers willing to pay
-is there a gap in the market

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18
Q

what is primary research?

A

research that is collected first hand

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19
Q

advantages of primary research:

A

-specific to needs of the business
-up to date → reliable
-often better for qualitative data

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20
Q

disadvantages of primary research:

A

-more time consuming
-more expensive
-difficult to conduct a large sample size

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21
Q

what is secondary research?

A

research that already exists, conduction by someone else

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22
Q

advantages of secondary research:

A

-easily accessible
-fast & less time consuming
-often better for quantitative data

23
Q

disadvantages of secondary research:

A

-detailed reports can be expensive
-not always up to date or specific to business

24
Q

product orientated

A

focused on product efficiencies and the improving product itself

25
Q

market orientation

A

focused understanding customers and developing products that meet their needs

26
Q

which orientation do the most successful businesses tend to have, why?

A

market orientation, as businesses can only succeed in a competitive market if they meet the needs of customers better than their rivals

27
Q

limitations of market research

A

-often biased
-a small sample limits the reliability of the research
-collecting is time consuming

28
Q

what can market research be used to do?

A

-develop products
-make a cash flow forecast
-budget
-develop marketing activities

29
Q

sampling

A

sampling involves selecting a representative group of people from the target population

30
Q

advantages of samples:

A

-quicker and easier than trying to collect research from everyone
-the bigger the sample, the more representative it will be

31
Q

correlation

A

the relationship between two factors

32
Q

correlation doesn’t always mean c_________

A

causality

33
Q

how can the internet be used to collect market research data?

A

-collecting data through websites
-social media/networking
-analysing information in databases

34
Q

market segmentation

A

breaking the market into smaller groups based on certain characteristics

35
Q

advantages of market segmentation:

A

-helps a business differentiate itself from competitors
-helps a business develop and build its brand
-helps a business identify and satisfy the needs of a specific group of customers
-helps a business reach its customers with relevant marketing activities such as advertising
-helps a business build loyalty towards its brand and products

36
Q

what is a market map?

A

a technique used to understand how products/businesses are viewed relative to competitors, based on two characteristics

37
Q

benefits of market maps

A

-helps businesses decide whether to set up in a market (is there a gap?)
-is useful for comparing the similarities and differences between businesses (market positioning)
-helps a business gains better understanding of its competitors
-useful as a market research tool to gain an understanding of customer perceptions

38
Q

limitation of market maps

A

only considers two main variables - markets and customer perceptions are complex

39
Q

factors a business may consider when positioning a product or the business?

A

-the attributes of the product (features & quality)
-classification of the product or business

40
Q

head to head competition

A

-there isn’t always a gap in the market for a business to be successful
-businesses can target the same customers as other businesses & still be successful if there’s enough demand/if they meet customer needs better than competitors

41
Q

competitive advantage

A

a set of unique features of a business and its products that are perceived by customers as better than competition

42
Q

how do businesses usually achieve competitive advantage?

A

differentiate their products from those of competitors

43
Q

ways to differentiate:

A

-USP (unique brand characteristics/unique product features
-better customer experience
-good relationships with customers
-more affordable price than competition

44
Q

what does differentiation do about competition ?

A

it means that businesses don’t have to position themselves along rival firms

45
Q

which three ways can a sustainable competitive advantage be achieved?

A

-innovation
-architecture
-reputation

46
Q

innovation

A

the ability of a business to create new and unique processes and products (sometimes legally protected through a patent)

47
Q

architecture

A

refers to the relationships within a business that create synergy and understanding between suppliers, customers and the employees of a business

48
Q

reputation

A

brand values are hard to replicate and may take years to develop

49
Q

why can each of these three factors lead to a sustainable competitive advantage?

A

-they are all unique, not easily copied and take a long time to achieve

50
Q

what is the basic purpose of all businesses?

A

adding value

51
Q

steps of adding value

A

inputs:
labour, capital, raw materials

transformational processes:
add value

outputs:
goods & services

52
Q

different ways to add value:

A

-branding (developing a strong brand identity through promotion)
-better design/features
-customisation
-packaging
-good customer service

53
Q

the more value a business can add…

A

the higher the price & the greater the profit margin

A LEVEL BUSINESS - ALL (8 decks)

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