1.1 Meeting customer needs Flashcards
Define market
Where buyers and sellers come together to trade goods
What is the difference between risk and uncertainty
Risk exists due to entrepreneurs committing resources such as money that could be lost
Uncertainty exists due to businesses operating in an ever changing environment and are subject to changing external factors like legal, economic and social factors
Define marketing
involves a range of activities in order to support the process of communicating with customers with the goal of selling them products that meet their needs
What does marketing involve
- understanding the customers’ needs
- understanding the dynamics of the market
- developing successful products
- promoting the business and its products
Features of a mass market
- targets a large audience with a generic product
- requires production on a large scale
- potential for high sales revenue
- may compete with other businesses
- promotion such as TV and newspapers (mass market techniques)
- will have to be competitive on price
Features of a niche market
- targets a small audience with a specialised product
- production on a small scale
- low volumes but high profit margins
- few competitors but limited number of potential customers
What are brands used for
Given to products to distinguish them from other products on the market
Define dynamic market
A market that is constantly changing
Calculate market share
sales of a business / total sales in a market x 100
Define market share
the proportion of a particular market held by a business
How can businesses adapt in a dynamic market
- Being flexible in the way they operate
- carrying out market research to have a better understanding of their customers
- Investment in new technology, people and products
- Continuous improvement
Advs of low competition for business / Dis of low competition for customers
Ads:
- can dominate the market
- set high prices
Dis:
- limited choice
- high prices
- poor service
Why is high competition better for businesses and customers
Businesses:
- incentive to innovate
- focus to improve efficiencies
- competitive pricing
customers:
- lots of choice
- good value for money
- exciting new product development
What does market research involve
gathering and analysing qualitative and quantitative market data
Ads / dis of primary research
Ads:
- specific to the needs of the business
- more up to date and reliable
- better for qualitative data
- better for two-way communication and follow up questions
Dis:
- more time consuming and therefore costly
- difficult to conduct a large sample size
What is secondary research
research that already exists for example on google
what is primary research
research collected first hand
Ads and dis of secondary research
Ads:
- easily accessible
- fast and less time consuming
- better for quantitive data
Dis:
- may have to pay for data
- may not be updated or tailored to the business’s needs
What is product orientated
Marketing focused on production efficiencies and the product itself
What is market oreinatated
Focused on consumer needs:
understanding customers and developing products that meet their needs
What are the drawbacks of market research
- often biased
- a small sample limits the reliability of the research
- collecting it is time consuming
Define sampling
selecting a representative group of people from the target audience
What are the advantages of sampling
- it is quicker and easier than trying to collect research from everyone
- the bigger the sample size, the more representative it will be
What does market segmentation allow for
- differentiate itself from its competitors
- identify and satisfy the needs of a specific group of customers
- develop and build its brand
