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business > 1.1 meeting customer needs > Flashcards

1.1 meeting customer needs Flashcards

1
Q

What is a market?

A

A market is any place that buyers and sellers will come together to exchange goods or services. There will normally be an exchange of money at a set price.

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2
Q

What is the nature of the market?

A

Today, markets take numerous forms e.g. local, national, physical or electronic. Examples include the corner shop, the Stock Exchange

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3
Q

Mass market

A

this is the market that is aimed at the general population e.g. regular toothpaste

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4
Q

Niche market

A

this is a subset of the main market and addresses a specialist need e.g. Sensodyne toothpaste for sensitive teeth

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5
Q

characteristics of mass market (4)

A

targeted at a wide range of people

The market is not segmented

Products are widely available through a range of markets

Mass media is used to advertise the products

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6
Q

characteristics of Niche markets (4)

A

Identifying small, currently unsatisfied, gaps in the market

The target market is well defined with distinct characteristics

Promotional activities will be targeted at just a small subsection of the whole market

Can often charge higher prices

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7
Q

advantages of mass market

A

large scale production results in low manufacturing costs
marketing is easy as it is targeted at everyone
large sales = large revenue

revenues can be put into r&d

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8
Q

disadvantages of mass market

A

lots of competition

homogenous/ similar products need to be differentiated thu marketing

high production is not flexible with demand

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9
Q

Market size

A

The size of the market is the TOTAL of all the sales of all the producers in that market

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10
Q

how can market size be measured (2)

A

Volume of sales, or quantity of products sold e.g. 91 million burgers sold every year**

Value, total amount spent by customers e.g. The UK burger bar market is estimated to be worth Β£3.28billion

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11
Q

What does a business do with the information about market size? (3)

A

firms can see if the market is extracting or contracting

firms can calculate market share

firms can look at other markets to see if they are worth entering - international or more niche ones

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12
Q

Market share formula

A

(π‘†π‘Žπ‘™π‘’π‘  π‘œπ‘“ π‘₯)/”Total sales in whole market β€œ x 100

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13
Q

market share definition

A

the proportion of a market that is taken up by a firm

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14
Q

what is a brand

A

A brand is a product produced by one business using a specific name
A brand is a trademark that cannot be copied

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15
Q

benefits of building a brand

A

help build loyalty and repeat business as well as adding value allowing businesses to charge higher prices

Brand value

Brand personality

Brand extension

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16
Q

what is a dynamic market

A

a market that is always changing

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17
Q

features of a dynamic environment (4)

A

Social trends
Changes in technology
Competitive environment
Consumer tastes

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18
Q

Online retailing

A

The process of buying and selling goods and services over the internet
Also known as e-commerce or e-tail

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19
Q

benefits of online retailing (6)

A

Offers greater convenience to the consumer
Can shop 24/7
Breaks down geographical barriers
Offers opportunities to businesses
Lower overhead costs
Access to a wider market

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20
Q

market growth definition

A

the percentage increase in the size of a market

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21
Q

market growth formula

A

change in size of market / original size x 100

22
Q

how does competition affect the market (5)

A

The price a business is able to charge
The buying power of the customer
The selling power of the supplier
Availability of substitutes e.g. Coca Cola and Pepsi Cola
Willingness and ability of new firms to enter the market

23
Q

What are risks

A

a measurable judgement to quantify a degree of risk

24
Q

what are uncertainties

A

the chance of something happening that is not measurable as the outcome is too unpredictable

25
Product orientation
A business is product orientated when it only looks at the product or the production process when deciding what to make next
26
When is product orientation appropriate
There is little competition in the market When there is limited consumer knowledge When there is low disposable income of consumers
27
Market orientated
Market orientation is a business philosophy where the focus is on identifying customer needs or wants and meeting them. When a company has a market orientation approach, it focuses on designing and selling goods and services that satisfy customer needs in order to be profitable.
28
Effective market research will help a business to (6)
Reduce risk Understand how much consumers will pay Understand consumer behaviour forecast sales Identify potential competitors develop marketing plan
29
Primary market research
research the business conduct for themselves. It involves going directly to a source – usually customers and prospective customers in the target market – to ask questions and gather information to make specific descisions
30
types of primary research
questionnaires observations interviews focus groups surveys
31
what data can be gathered from primary market research
qualitative and quantitative
32
Secondary research
gathering data that already exists
33
types of secondary research
Government Sources Trade Publications Market reports Internet sources Newspapers / Magazines / TV / Radio
34
what data can be gathered form secondary market research
qualitative and quantitative
35
qualitative data
subjective data that contains feelings, thoughts and impressions
36
quantitative data
gathering data and measuring responses- displayed in charts and graphs or as percentages
37
Sampling
Sampling is the process of choosing the right people to be part of the research
38
Sample size
the number of respondents who are interviewed during the research needs to be large enough that the data has statistical validity and can be useful to the business for decision making
39
Limitations of market research
human behaviour, sample size and bias - market research depends on the responses of pps
40
Bias
Bias is when research findings cannot be trusted because of the way the research has been carried out
41
what ICT can support market research
Websites social networks business databases
42
Market segments
A market segment is an identifiable group of individuals or part of a market where consumers share one or more characteristics or needs
43
types of segmentation - LIDLAG
Location Income Demographic Lifestyle Age Gender
44
Market Mapping
Market mapping is the process of finding the variables which differentiate brands in a market and then plotting them on a map – to identify a gap in the market
45
Uses of market mapping
to identify which products to produce or which services to provide – so they can be market orientated It could also be used by a traditional brand to reposition itself in the market e.g. The North Face - hikers to youth
46
Competitive advantage
An advantage a business has over its competitors, allowing it to generate larger than average revenue for the industry, either in low cost leadership or on price leadership
47
Ways a business can achieve competitive advantage ACCA PRIQ B
Added value Customer service Convenience Advertising Price leadership Reliability Innovation Quality Branding
48
Product differentiation
Where a product is different from the competition in some way Consumers must be able to perceive this difference and may be willing to pay a premium price for the product
49
Methods of differentiation
Through reputation Through customer service or after sales service Through value for money Through product features
50
Added value
the amount by which the monetary value of an product or service increased at each stage of its production
51
How can a business add value
design production marketing
52
benefits of adding value
higher prices can be charged protection against cheaper competition customer loyalty

business (7 decks)

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