1.1 Meeting Customer Needs Flashcards
Define the mass market
A market aimed at a general population
Define niche market
Subset of main market, usually to fill a need
Define market share and state the formula
The proportion of a market controlled by a single brand/ company
Market share = (sales of a product business / total market share) X 100
State the advantages and disadvantages of a mass market
+large size market
+economies of scale
+widespread availability
-low profit margins
-highly competitive
-less variety
State the advantages and disadvantages of a Niche market
+customer loyalty
+less competition
+larger profit margins
-smaller market
-low economies of scale
Define ‘economies of scale’
a proportionate saving in costs gained by an increased level of production
What is a dynamic market?
A market that is subject to rapid and continuous change
Give an example of a dynamic market and the ads and dis-ads of it
An example is online markets
+often around the clock
+flexible as owner can work from anywhere
+low overheads, no need for a shop premise
-71% of customers still prefer to browse online than to buy from a shop
-Issues with returning goods puts people off
-Owners need IT skills
How does competition affect the market?
-More competition means business’ must produce a good quality product or service.
-More competition means business’ must differentiate its self.
Define ‘risk’
Potential outcomes of a decision are known
Define ‘uncertainty’
Non of the outcomes are known in advance.
What is the difference between market orientation and product orientation?
Market orientation- business responds to customer needs and wants
Product orientation- business developed products based on what it is good at doing
What is primary research and give examples
Original data gathered first hand by the researcher for a specific project.
For example: surveys, interviews, focus groups, loyalty cards
What is secondary research and give examples
Gathering pre-existing data and reporting, analysing and interpreting that.
For example: Annual reports, government sources, trade journals
State the positives and negatives of secondary research
+often free and easy to maintain
+good source of market insight
+quick to access and use
-out of date quickly
-not tailored to business needs
-specialist reports often quite expensive
State the positives and negatives of primary research
+Directly focused on research objectives
+kept private
+More detailed insight
-Time consuming and costly to maintain
-Risk of survey bias
-Sampling may not be representative
What is quantitative research and list the positives and negatives
Based on data and addresses questions such as who?, What? There are larger samples sizes and collects data through surveys
+data relatively easy to analyse
+provides insight into relevant trends
+can be compared with data from other sources
-Focuses on data rather than explaining why
-Doesn’t explain the reasons behind numerical trends
-May lack reliability if sample size and method isn’t valid
What is qualitative data and state the positives and negatives
Based on opinions and addresses questions such as why?, how?, would?
+essential for new development and launches
+can highlight issues that need addressing
+focused on understanding customers
-expensive to collect data
-Risk the sample may not be representative
State 2 limitations to carrying out market research
Budgetary constraints- Business may not be able to afford primary research
Legal and ethical constraints- Data protection act has a number of implications of withholding personal data
What is market segment and what are the segments?
A process companies use to break their potential customers into different sectors.
Demographic, geographic, behavioural and life stage
