1.1 Meeting Customer Needs Flashcards
What is mass marketing??
A business selling into the largest part of the market where there are many similar products sold by competitors
Give 3 characteristics of mass marketing!🤔
- Customer needs & wants are more general
- Success usually associated with low-cost operation
- Higher production output and capacity
potential for economies of scale)
Give 2 aims of mass marketing!
- Leadership of largest market segment
- Exploit economies of scale for high profits
What are 3 benefits of mass marketing??👍
- Widest customer base
- Lower risk
- Economies of scale
What are 3 advantages of niche marketing??👗
- Less competition
- Can charge higher prices
- Loyal customer
What are 3 drawbacks of niche marketing??
- Lack of economies of scale
- Risk of over-dependence on single product or market
- Vulnerable to market changes (dynamic markets)
What is market size??🏹
Total number of customers measured in either sales volume or sales value
What are the 2 things market growth can be calculated using??
Volume (units sold)
or
Value (market sales)
What’s a dynamic market??
A market that is subject to rapid or continuous changes
What are the 4 areas to consider when examining dynamic markets??😶🌫️
- Online retailing
- How markets change
- Innovation and market growth
- Adapting to change
What are 3 advantages of online retailing??📱
- Easier business access
- Longer trading hours (open 24/7)
- Cheaper to run
What are the 4 market changes that can lead to the market becoming dynamic??
- Changing consumer tastes & preferences
- Changing demographics
- Amount of competition
- Changing legislation
What are 3 ways that competition can benefit customers??
- Business offers lower prices
- Business produces better quality products
- Business provides better customer service
What are 3 benefits of product innovation??
- Profitability
- Added value
- Enhanced reputation (e.g more public relations)
What are 3 benefits of process innovation??
- Reduced costs
- More responsive customer service
- Higher profits
What is product orientation??
An approach to marketing that focuses on the characteristics of the product rather than the needs of the customer
Business will focus on making the product and then finding the market in belief that the product will ‘sell itself’.
What is the problem with product orientation??
Over time, the product may move further and further away from what the market is looking for, thus increasing the risk of business failure.
What is market orientation??
Approach to marketing that focuses on the needs of the customers and therefore designs products that meet customer needs
What are the 3 benefits of market orientation??
- Increased demand
- Increased profits
- Valued brand image
What are the 6 purposes of market research??
- Reduce risk
- Understand consumer behaviour
- Identify potential demand
- How much consumers are prepared to pay
- Identify competitors
What are the 5 types of primary market research??
- Surveys
- Observation
- Interviews
- Test marketing
- Focus Groups
What are the 3 advantages of primary market research??
- Focused on needs of the business
- In-depth information
- More up-to-date and specific
What are the 3 disadvantages of primary market research??
- Sample size too small to be representative
- Researcher may ask leading questions (bias)
- Expensive and time-consuming
What are 2 type of secondary market research??
- Market reports
- Government statistics
What are 3 advantages of secondary market research??
- Quicker to collect (already available)
- Often free (cheaper to collect)
- Suitable for small businesses that lack large marketing budget/expertise
What are 3 disadvantages of secondary market research??
- May lack relevance
- Can be expensive to purchase
- May be out-of-date
What are 3 ways that ICT can be used for market research??
- Company websites for cheaper primary data (e.g tracking consumer searches)
- Databases (store large amounts of info)
- Social networking
What are the 4 ways of segmenting a market??
- Behavioural
- Geographic
- Psychological
- Demographic
What are the 4 advantages of market segmentation??
- Recognises consumers are not identical
- Meet different needs of different groups of customers
- Increase loyalty (needs are being met)
- Less expensive and wasteful
What are the 4 disadvantages of market segmentation??
- Not everyone within a segment is identical
- Difficult to identify segment
What are the 2 benefits and 1 drawback of random sampling??
Pos: Simple, unbiased
Neg: Less representative
What are the 2 positives and 2 negatives of stratified sampling??
+ Representative
+ More precision
- Time consuming
- What defines the subsets?
What is quota sampling??
Divide larger population into subsets
Samples deliberately selected from these subsets
What is market positioning??
Business decides where they want to position the product in the market with regard to price, quality, branding & consumer perception
What are 4 advantages of market mapping??
- Identify gaps in the market
- Comparison to competition
- Visual illustration & simple
- Enable market research
What are 4 disadvantages of market mapping??
- Gaps may not always be profitable to fill
- May require primary market research
- Too simplistic
- Only provides insight for a specific point in time (bad for dynamic markets)
What are the 8 sources of competitive advantage??
- Delivery times
- Customer service
- Price
- Reliability
- Brand image & reputation
- Ethical stance
- Design
- Quality
What are the 8 methods of adding value??
- Branding
- Functions/features
- Packaging
- Customisation
- Customer service
- Convenience
- Design
- Product differentiation
What is product differentiation??
An attempt by a business to distinguish its products from competitors
Helps create USP & develop comp advantage
