1.1 MEETING CUSTOMER NEEDS Flashcards
1.1.1 The Market
What is the market?
Any place that buyers and sellers will come together to exchange goods or service. There will normally be an exchange of money at a set price
1.1.1 The Market
What does a mass market consist of?
- A product is targeted at a wide range of people
- The market is not segmented (“segmented” means dividing a company’s target market into smaller groups, or “segments,” of customers who share similar characteristics, needs, or behaviors, allowing the business to tailor its products and marketing strategies specifically to each group.)
- Products appeal to a wide range of products
- Products are widely available through a range of market
- Mass media is used to advertise the products
1.1.1 The Market
What does a niche market consist of?
- Identifying small, currently unsatisfied, gaps in the market
- The target is well defined with distinct charactersistics
- Promotional activities will be targeted at just a small subsection of the whole market
- Can often charge higher prices
1.1.1 The Market
What is market size and how can it be calculated?
- The total value or volume of sales in the market
Calculated as : Number of units sold X Price
1.1.1 The Market
What is market share and how is it calculated?
The proportion of total market sales that a firm has
Calculated as : Sale of one firm/ Total market sale X 100
1.1.1 The Market
What is a brand and what can it be?
- Brand is a product, logo, or company name that allows customers to identify/ recognise the product and distinguish that firm and its products from other firms
Brand can be:
# Name
# Shape
# Symbol
#Colour
# Logo
1.1.1 The Market
What are the benefits from building a brand?
- Can add value to a product allowing firms to charge higher prices and also lead to brand loyalty whereby customers will continue to buy products from that firm –> repeat purchases
- Competitive advantage is a feature of a business that allows it to perform more successfully than others in a market
- Brand extension:
- Adding new product ranges to a recognised brand name
- Consumer familiar with or loyal to the brand –> more likely to try new products
- Brand Value
- The brand name itself adds value to the products. It is therefore said to have a money value and less has to be spent on advertising the brand once established
-Brand personality
* We associate them with certain human characteristics
1.1.1 The Market
What is the dyanmic market?
- This is a changing market
- A business has to adapt to their marketing in response to these changes
- A business that fails to keep up with trends in the market will soon lose competitiveness
1.1.1 The Market
How is the dyanmic market related to online retailing?
- The process of selling and buying goods and services over the internet ( e-commerce )
- Offers greater convenience to the cosumer
- Can shop 24/7
- Breaks down geographical barriers
- Lower overhead costs
- Access to wider market
- Maybe used as part of a multi-channel distribution strategy
1.1.1 The Market
How is the dyanmic market related to how markets change?
- Businesses have to adapt quickly to changes and develop new ideas, products and services to keep up with technology and new trends.
1.1.1 The Market
How is the dyanmic market related to how it adapts to change?
- Through a constant process of monitoring market trends, analyzing customer behavior, embracing innovation, and quickly adjusting their product offerings and strategies to meet evolving demands.
1.1.1 The Market
How is the dynamic market related to the innovation and market growth?
- Market growth is the percentage increase in the size of the market
CALCULATED AS : Change in the size of market/ orginal size X 100 - Innovation is when a new idea or invention is launched onto the market normally with a view to financial gains
1.1.1 The Market
How does competition affect the market?
- The price a business is able to change
- The buying power of the customer
- The selling power of the supplier
- Availability of substitutes
- Willingness and ability of new firms to enter the market
1.1.1 The Market
What is a risk?
- It is possible to add a probability to quantify the degree of risk
- It is measurable
- Deals with unknows
1.1.1 The Market
What is a uncertainties?
- It is not possible to add a quantifiable probability as the outcome is too unpredictable
- It is not measurable
- Deals with unknowns
1.1.1 The Market
What is Porter’s Five Forces?
- Threat of substitute
- Bargaining power and substitute
- Threat of new entrants
- Bargaining power of suppliers
- Rivalry among exciting competition
1.1.2 Market Research
What is product orientation?
- It is an inwards looking approach to new product developmet where the key focus is on what products can be made about the production process
1.1.2 Market Research
How is product orientation related to market research?
- Informed by scientific research and technical development
- The business will concentrate on producing high quality products and then look to create a market for them
- Most technologically advanced products were the consumer does not have the technical knowledge or insight to realise that this product could exist or that they would want it
1.1.2 Market Research
Whar is market orientation?
Is an outward looking approach to new product development where the key focus is on what products the consumer wants
1.1.2 Market Research
How is market orientation related to market research?
- This approach is informed by market research
- The business will concentrate on understanding the needs of the consumer and then adapting or producing products to meet these needs
- This reduces, but does not elminate, the risk of new product development
1.1.2 Market Research
What is market research and what is the use to collect and analyse data?
Is the collection and analysis or data and information to inform a business about its market
Data collected and analysed is used to:
- Identify and anticipate needs and wants
- Quantify likely demand
- Gain insight into customer behaviour
1.1.2 Market Research
What is primary market research?
Involves the collection of first hand data that did not exist before and therefore it is original data
1.1.2 Market Research
What is secondary market research?
Research that has already been undertaken by another organisation and therefore already exists
1.1.2 Market Research
What is qualitative data?
The gathering of non-statistical information that gives a company in-depth insight into the reason for human behaviour
1.1.2 Market Research
What is quantitative data?
The gathering of statistical data to inform the company about people’s behaviour but does not identify the reason
1.1.2 Market Research
What are the limitations of market research?
- Past data and trends may not be a fair indication of the future
- Accuracy of research findings
- Department upon ability to correctly analyse findings
- Finacial and opportunity costs
- Bias
1.1.2 Market Research
What is the use of ICT to support market research?
- Information communication technology has many uses in supporting both the collection and analysis of research data
1.1.2 Market Research
How does websites support market research?
- Invite feedback through blogs
- Analytics monitor number, frequency and timings of visitors
- Cookies
- Online poles and surveys
1.1.2 Market Research
How does social networking support market research?
- Reviews
- Blogs
- Likes/ Dislikes
- Viral marketing
1.1.2 Market Research
How does databases support market research?
- Data mining ( the process of sorting through large data sets to identify patterns and relationships that can help solve business problems through data analysis )
- Trends
1.1.2 Market Research
What is market segmentation?
Occurs when the market is split into subgroups of consumer with similar characteristics
Helps to identify different types of consumer and different wants and needs
1.1.3 Market Positioning
What is market mapping?
- Market map is a diagrammatic technique that enables business to display the perceptions of customers
1.1.3 Market Positioning
How is market postitioning related to market mapping?
- Compares different variables regarding products and customers
- It can be used to analyse consumer buying habits and preferences
- It can be used to identify what segment of the market is unprovided for and looked at producing a product to fill that gap
- Products are compared between all competitors within a market
1.1.3 Market Positioning
What is competitive advantage of a product or service and how it links to market positioning?
It is a feature of a business that allows it to perform more successfully than others in the market
- Same quality of a product at a lower price
- Superior product achieved through differenctiation
Factors contributing to a competitive advantage
- Product differentiation
- Operational efficiency
- Ability to add value
- Position relative to competitors
1.1.3 Market Positioning
What is Porter’s competitve advantage?
- Generic strategy states that a firm can enjoy a competitive advantage if it is either:
Lower cost OR Higher differentiated
Porter’s Motto : “ Be one thing or the other and not stuck in the middle”
1.1.3 Market Positioning
What is lower costs?
Cost leadership means being able to offer your product or service at the lowest cost possible
1.1.3 Market Positioning
What is differentiation?
Means being able to offer a product or service that stand out from the competition
1.1.3 Market Positioning
What is the purpose of product differentiation?
- USP is a feature that distinguishes a firm’s product from those of its competitors
- Produce differentiation allows a firm to:
- Change a premium price
- Gain brand loyalty
- Add value
- Firms try to make their product different to the comeptition by adapting the actual product in some way or by distinguishing the product through advertising and branding
1.1.3 Market Positioning
What is adding value to their product/ service?
- Adding value is the value of the finished good or service over and above the cost of purchasing it
- This is achieved when a business increases the worth of its factor inputs by creating new output
Factors inputs are the 4 factors of production:
- Land - Labour - Capital - Enterprice
Value can be added in many ways including:
- USP - Marketing - Technology - Customer Service -Manufacturing
