1.1 meeting customer needs

Question 1

what is a market?

Answer 1

any medium in which buyers and sellers meet to make a form of exchange

Question 2

what is marketing?

Answer 2

the management process responsible for identifying, anticipating and satisfying customer requirements profitably

Question 3

what is a mass and a niche market?

Answer 3

mass:
>large market
>targets the majority of people with similar needs / wants
>high sales volume
>high competition

niche:
>smaller segment of a larger market
>customers have specific needs and wants
>may be specialised or luxury items

Question 4

what are the advantages and disadvantages of a mass market?

Answer 4

advantages:
high sales volume
large amounts of loyal customers

disadvantages:
higher levels of competition
meaning lower prices

Question 5

what are the advantages and disadvantages of a niche market?

Answer 5

advantages:
charger higher prices for a luxury item
lower levels of competition

disadvantages:
smaller amounts of customers
lower sales volume

Question 6

what is market size?

Answer 6

how large a market is - measured in value or number of units sold

number of units sold x average selling price

Question 7

what is market share?

Answer 7

measures the sales of a business as a % of the total sales in a market

sales of firm / total market sales x 100

Question 8

what is market growth?

Answer 8

the rate of overall growth or decline of a market over time. calculated as a % change

change / original x 100

Question 9

what is market research?

Answer 9

the activity of gathering information about customer’s wants, needs and preferences

Question 10

what is a market orientated approach?

Answer 10

the decisions taken are based around information about customers needs and wants, rather than what the business thinks is right for the customer. this is the most successful.

Question 11

what is a product orientated approach?

Answer 11

businesses develop products based on what it is good at making or doing rather than what a customer wants. this approach is criticised because it often leads to unsuccessful products

Question 12

whats the difference between primary and secondary market research?

Answer 12

primary - collecting information first hand for a specific purpose

secondary - the process of collecting data which has already been compiled for another purpose. the data already exists

Question 13

what are the two main types of secondary data?

Answer 13

internal data - these are from the businesses own records and performance

external data - sources of information available to a business. traditionally in paper format but now they are in internet form

Question 14

what is quantitative and qualitative data?

Answer 14

qualitative - data relating to opinions of quality eg what people think. subjective data that may be difficult to analyse

quantitative - data expressed in quantities and therefore statistical facts. it can be analysed easily

Question 15

what is a dynamic market?

Answer 15

markets that change constantly. they are shaped by forces which change frequently eg. technological changes

Question 16

what is online retailing (e-tailing)

Answer 16

when buyers and sellers meet through virtual platform (such as ebay) and buying and selling occurs.

Question 17

what is sampling?

Answer 17

the selection of a representative group of consumers from a large population and therefore a firm would select a group of consumers from the target market. the larger the sample, the more accurate the results.

Question 18

what is market segmentation?

Answer 18

the classification of customers or potential customers into groups or sub groups with similar characteristics, needs and wants within a market.

Question 19

what are the methods of market segmentation?

Answer 19

> demographic (age, gender)
geographic (regions of the uk)
income levels
behavioural
psychographic

Question 20

what is market positioning?

Answer 20

how individual products or brands are seen in relation to their competition by consumers. this may stem from pricing, marketing or quality

Question 21

what is the market map?

Answer 21

illustrates the range of positions that a product or service can take in a market based on two dimensions that are important to a customer eg. price and quality

Question 22

what is added value?

Answer 22

the difference between the price paid and the total cost of the inputs needed to create a product

Question 23

what are the benefits of added value?

Answer 23

customer - customers pay a set price, but they receive additional benefits, such as after sales service, a quality brand, to feel they’re making a change

business - costs are covered ensuring profit is made. customers show loyalty to the business leading to repeat custom and high rep

Question 24

how can a business add value?

Answer 24

> creating a strong brand image
offering convenience
high quality and design
usp

Question 25

what does the marketing mix refer to?

Answer 25

the 4 ps - product, place, price and promotion

Question 26

what is a competitive advantage?

Answer 26

any feature that enables a business to compete effectively with rivals