1.1-meeting customer needs Flashcards
What is a market?
-A place where products are sold
–A certain group of customers
-Demand for a product
-Competition
What is market size?
-The total amount of sales in a market
- Can be volume of sales, or value spent by customers
What is market share?
-A % of the market that each business owns through sales
Market share= sales of x
————— x 100 = ——%
total sales in market
What is a mass market?
-A more generalised market that is on a larger scale
+ves:
-more potential customers
-mass production-lower unit costs/ economies of scale
-high demand for workers
-ves:
-more competition - may lose sales if price not lowered
What is a niche market?
-Smaller scale, that addresses specialist needs
+ves:
-can charge a premium price
-less competition
-easy to target customers- with specific needs
-ves:
-risky- inconsistent demand
-high unit costs- no economies of scale
-requires skilled workers to make the products- demand a higher pay
What is market growth?
-when the market expands as the value of the market and volume of sales increase
What is a brand?
-An identity that separates one business from another
-easily recognisable- through logos, colours, slogans
What is online retailing?
-Where you find products online, through websites and social media
+ve:
-cheaper
-easy to compare with other businesses
-available 24/7
-less costs as no premises needed
-ves:
-cant see in person so there will be more returns
-high delivery costs
-more competition
-can have tech issues
What is market research?
The process of gathering information about products, customer needs and preferences
How does it help a business?
-Can reduce risk and help make informed decisions
-understand consumer behaviour
-identify potential competitors
-understand consumer demand and how much they are willing to pay
What is primary market research?
Research that you carry out yourself, and hasn’t been done before (is first hand)
methods of primary research
-questionnaire/survey
-observation- see where customers go and what products attract them
-interviews
-test marketing- exploring customer responses to a product that is available on a limited basis
-focus group- group discussion to collect opinions/ feedback
advantages and disadvantages of primary research
+ve:
specific
upto date
-ve:
time consuming
expensive
what is secondary market research?
Research that has already been carried out
methods of secondary market research
-government sources- documents by government that are published online
-trade publications- people that work in a particular industry
-market reports-collecting data from marketing sources
-internet- sources online that have already been collected
newspapers/magazines/tv -identify trends
benefits and drawbacks of secondary market research
+ve:
easily accessible
cheap
-ve:
not specific
not upto date
What is market segmentation?
split up market into different groups eg. age gender
what is product orientation?
-only looks at the product or production process when deciding what to make next
-is inward looking- produces what they are good at rather than what consumers want
what is market orientation
-customers are most important factor when deciding what products to make next
-business identifies customer needs and makes a product to meet it
what is market mapping
plot existing businesses on an axes with two chosen variables eg. price and quality
it then allows you to spot any gaps in the market, and identify competitors
what is product differentiation
where you make your products different to competitors
what is market positioning
trying to influence customers perceptions of a brand/products over competitors
-can be achieved through differentiation and adding value
What is adding value
the difference between the price charged to customers for a product and the cost of inputs required to make the product
added value = price product is sold for - cost of making the product
What is a competitive advantage?
unique features of a company and its products that are seen as superior to competitors
can be developed by:
-usp
-low price
-quality
-reputation
-branding
convenience
-customer service
advertising
