1.1-meeting customer needs

Question 1

What is a market?

Answer 1

-A place where products are sold
–A certain group of customers
-Demand for a product
-Competition

Question 2

What is market size?

Answer 2

-The total amount of sales in a market
- Can be volume of sales, or value spent by customers

Question 3

What is market share?

Answer 3

-A % of the market that each business owns through sales
Market share= sales of x
————— x 100 = ——%
total sales in market

Question 4

What is a mass market?

Answer 4

-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

Question 5

What is a niche market?

Answer 5

-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

Question 6

What is market growth?

Answer 6

-when the market expands as the value of the market and volume of sales increase

Question 7

What is a brand?

Answer 7

-An identity that separates one business from another
-easily recognisable- through logos, colours, slogans

Question 8

What is online retailing?

Answer 8

-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

Question 9

What is market research?

Answer 9

The process of gathering information about products, customer needs and preferences

Question 10

How does it help a business?

Answer 10

-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

Question 11

What is primary market research?

Answer 11

Research that you carry out yourself, and hasn’t been done before (is first hand)

Question 12

methods of primary research

Answer 12

-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

Question 13

advantages and disadvantages of primary research

Answer 13

+ve:
specific
upto date
-ve:
time consuming
expensive

Question 14

what is secondary market research?

Answer 14

Research that has already been carried out

Question 15

methods of secondary market research

Answer 15

-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

Question 16

benefits and drawbacks of secondary market research

Answer 16

+ve:
easily accessible
cheap
-ve:
not specific
not upto date

Question 17

What is market segmentation?

Answer 17

split up market into different groups eg. age gender

Question 18

what is product orientation?

Answer 18

-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

Question 19

what is market orientation

Answer 19

-customers are most important factor when deciding what products to make next
-business identifies customer needs and makes a product to meet it

Question 20

what is market mapping

Answer 20

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

Question 21

what is product differentiation

Answer 21

where you make your products different to competitors

Question 22

what is market positioning

Answer 22

trying to influence customers perceptions of a brand/products over competitors
-can be achieved through differentiation and adding value

Question 23

What is adding value

Answer 23

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

Question 24

What is a competitive advantage?

Answer 24

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