1.1 Meeting customer needs Flashcards
Advantages of mass market
- Large market size (More likely to sell)
- Exploits large economies of scale
- Widespread availability
Disadvantages of mass market
- Lower profit margins (per unit)
- Highly competitive
- A lot of money needs to be spent on advertising
Advantages of niche market
- Less competition
- Larger profit margins (Per unit)
- Increased customer loyalty
- Can charge premium price
2 Disadvantages of niche market
- Low economies of scale
- Vulnerable to market changes (Changes in consumer taste)
- Smaller market (Less likely to sell)
- Lower overall profit
Define market size
Total sales of all businesses in a market
Define market share
How the overall market is split between existing competitors
Formula for market share
(Sales of a business / total market sales) * 100
Formula for revenue
Number of units * selling price
Define niche and mass market
Niche market is when a business targets a smaller segment of a larger market.
Mass market is when a business sells to the largest part of a market.
Define market positioning
The consumers perceptions about a product
Define competitive advantage
Competitive advantage is a feature of a business that allows it to perform more successfully than others in the market.
The two ways of enjoying competitive advantage are?
- Lowest cost
- Highest differentiation
Define primary research.
Primary research involve collecting data that doesn’t already exist before the research
Define secondary research
Secondary research involves using and analysing already existing data
4 main methods of primary research are?
- Surveys and Questionnaires
- Focus groups and interviews
- Test Marketing
- Observation
4 Main methods of secondary research are?
- Internet Research
- Market Reports
- Government Reports
- Internal sources
2 Benefits of primary research
- Findings are specific to business
- Relevant and up to date
- Gives competitive advantage because competitors have no access to data
2 Drawbacks of primary research
- Can be expensive and time consuming
- Risk of research bias
- Difficult to attract customers to participate
Define Product Orientation
Product orientation is when a business develops and makes products which they think customer want and will sell well.
2 Benefits of secondary research
- Quick and easy collection of data
- Free of charge or cost effective
- Easy to analyse or already analysed
2 Drawbacks of secondary research
- The findings aren’t specific to the business.
- Becomes outdated quickly.
- Risk of research bis or inaccurate data.
Define Market Orientation
Market Orientation is when a business continually identifies, reviews and analyses consumer needs and trends in the market.
2 Advantages of a market orientated business
- Responds quickly to changes in the market
- In a stronger position to meet the challenge of new competition.
- More able to anticipate changes in the market.
- More confident that a launch of a new product will be successful.
Define quantitative research
Quantitative research involves collecting and analysing numerical data.
