1.1 Meeting Customer Needs Flashcards
What is a market?
A place where buyers and sellers come together.
What is a mass market?
A market where products are aimed at a broad range of consumers.
What is a niche market?
A market where products are aimed at a subset of the larger market.
What are the characteristics of a mass market?
1)products are less unique
2)lower average cost(EOS)
3)greater affordability
4)lower profit margins
What are the characteristics of a niche market?
1) products are more specialised
2)high average cost
3)lower sales volumes
4)higher profit margin
What is market share?
The proportion of the total sales of a product/service compared to the market as a whole.
What is the formula for market share?
Sales of a business/total sales in the market x100
What is a dynamic market?
A dynamic market is a market that is subject to rapid or continuous change.
4 areas to consider when examining dynamic markets?
1)Online retailing
2)How markets change
3)innovation and market growth
4)Adapting to change
What is direct competition?
Direct competition occurs when the business is targeting customers with the same product as a competitor.
What is indirect competition?
Indirect competition occurs when firms sell different products but compete with each other for the customers disposable income.
What is risk within a business?
Risk is the potential threat to business success.
What is uncertainty within a business?
Uncertainty is when outcomes are difficult to predict.
What is product orientation?
An approach to marketing that focuses on the characteristics of the product rather than the needs of the customer.
What is market orientation?
An approach to marketing that focuses on the needs of customers and uses this information to design products that meet customer needs.
Reasons for market research being carried out?
1)reduce risk
2)understand consumer behaviour
3)identify consumer demand
3)identify what consumers are prepared to pay
4)identify competitors
What is primary research?
The process of gathering information directly from consumers.
What are the 5 primary research methods
1)surveys
2)Observation
3)interviews
4)test marketing
5)focus groups
What is secondary market research?
Secondary research is the collection and analysis of data that already exists.
What is market segmentation?
The process in which a single market is divided into submarkets or segments.
Advantages of primary research?
1)focused on the needs of the business
2)can get more in depth information
3)more up to date information
Disadvantages of primary research
1)the sample size may be to small
2)researchers may be bias
3)expensive and time consuming
Advantages of secondary research?
1)information is quicker to gather
2)cheaper to collect
Disadvantages of secondary research
1)may lack relevance
2)information may be out of date
3) information may be bias
What is market positioning?
The process a business goes through when launching a new product or service.
What is market mapping?
Market mapping is a tool for identifying the position of a product within a market.
What is the usefulness of market mapping?
1)market gaps can be identified
2)easy to construct
3)comparisons can be made with competitors
What are the limitations of market mapping?
1)can be expensive
2)only two criteria’s can be chosen
3)markets are dynamic so they become outdated quickly.
4)a gap may exist, however it is not profitable to fill.
What is a competitive advantage?
The features of a business and its products that are perceived as superior to its rivals by customers.
What are the 8 methods of adding value?
1)marketing and branding
2)product differentiation
3)design
4)convenience
5)customer service
6)customisation
7)packaging
8)functions and features
Ways a firm can gain a competitive advantage?
1)innovation, reputation
2)building strong relationships with stakeholders
3)adding value
4)differentiation
5)market segmentation
6)price leadership
What is the purpose of product differentiation?
To distinguish your products/service from those of competitors.
