1.1 - Meeting customer needs Flashcards
What is a mass market
Definition: Products aimed at broad market segments with high sales volume.
Characteristics: Large-scale production, economies of scale, low prices, less uniqueness.
Example: Kellogg’s Corn Flakes.
what is a niche market
Niche Market
Definition: Products targeted at a specific, smaller group of consumers with specialized needs.
Characteristics: Small-scale production, higher costs, higher prices, and greater uniqueness.
Example: Xerjoff
What is a dynamic market
Definition: A market that experiences rapid or continuous changes due to competitive pressures.
Characteristics:Constant evolution and high competition.
Businesses must adapt or risk becoming obsolete.
Some markets change very quickly (e.g., mobile phones) while others remain stable (e.g., eggs and milk).
Example: The mobile phone market is highly dynamic, with frequent technological advancements and shifting consumer trends.
How Competition Affects the Market
Multiple businesses target the same customers, directly or indirectly.
Competition drives lower prices, better quality, and improved service.
Without competition, innovation and efficiency decline.
What is risk & uncertainty
Risk is the potential calculated threat to business success
Uncertainty is when outcomes are difficult to predict
What primary research
Primary research is research from within.
Adv & Dis of primary research
+Specific to needs of the business
+up to date and reliable information
+good for qualitative
-more time consuming’
-difficult to conduct a large sample
-expensive
What is secondary research
Secondary research is research gathered from an outside source, e.g. internet.
Adv & Dis of Secondary research
+easy to access
+good for quantitative data
+time efficient
-may not be accurate information
-may not be up to date
-may to be directly tailored to the needs of the business
What is product orientation
-Focusing on the creation of the product itself, and production efficiencies (product features & profit margins
What is market orientation?
-focused on meeting consumer needs, this is done by understanding customers and developing products to meet their needs
What is Quantitative data?
-numerical data
-easier to analyse
What is qualitative data?
-written data
-more detailed analysis
Limitations of market research
-it is often bias, especially if done in a group setting
-a small sample limits the ability to project the demands of the entire market
-can be time consuming
What is market segmentation?
-Separating marketing into sub-groups, this could be according to demographics e,g, gender and age.
Adv of market segmentation
+helps businesses to differentiate from competitors
+develop and build its brand
+identify and satisfy the needs of a specific group of customers
+build loyalty between its brand and costumers
What is market mapping?
-A tool for identifying the position of a product within a market
-A market map is a two-dimensional diagram e.g. high price, high quality
Benefits of market mapping
-Can identify new gaps within the market
-Comparisons can be made between close competitors
-simple to construct and understand
Limitations of market mapping
-A gap in the market may not exist because it is not profitable to fill
-may require primary research, therefore expensive
-too simplistic, as only two criteria can be chosen e,g, price and quality
-the market may be dynamic, therefore the map may get outdated quickly
What is competitive advantage?
Refers to the features of a business and its products that are perceived as superior to its rivals by customers
Main sources of competitive advantage
-innovation, reputation (branding)
-building strong relationships with stakeholders
-adding value
-differentiation
-market segmentation
-price leadership
What is product differentiation?
An attempt by a business to distinguish its products from those of competitors
Main reason to use product differentiation
-To create a unique selling point that gives a competitive edge
-This increases the demand, increases brand loyalty, and supports premium pricing.
What is adding value?
The process of increasing a product’s or service’s worth by transforming raw materials or enhancing features, measured as the difference between the final sale price and the cost of inputs.
