1.1 meeting cutomer needs Flashcards
what is a mass market?
- where a business sells into the largest part of the market
- there are many similar products offered by competitors
what is a niche market?
- where a business targets a smaller segment of a larger market
- customers have more specific needs and wants
what are key features of a mass market?
- customer needs and wants more general
- associated with higher production output
- success associated with low cost operation
advantages of a mass market?
- cheaper production, economies of scale
- larger audience
- cheaper labour
- cheaper prices=attraction
disadvantages of a mass market?
- associated with lower quality due to price
- harder to charge premium price
- if people don’t want the product they’re left with lots of stock
- mass production= 1 mistake= stock wasted
advantages of a niche market?
- less competition
- clear focus, specific target market
- builds specialist skills
- charge premium price
- profit margins often higher
- more loyal customers
disadvantages of a niche market?
- lack of economies of scale
- risk of over dependence on one product
- likely to attract competition if successful
- vulnerable to market changes
what is the formula for growth rate?
units sold for previous year
what is market share?
- how the market is split between the existing competition
what is a dynamic market?
- they all change
- place and nature of change varies by market
what are key sources of change in dynamic markets?
- customer tastes and preferences
- impact of technology on what and how customers buy
- impact of new market entrances
what are examples of highly dynamic markets?
- film industry
- taxi service
- camera market
what is an industry disputer?
- does something different in the industry which disturbs flow
why do markets change?
- to meet the needs of an ever changing society
what is market research?
- gathering information about the target market
- (consumers, competitors, distribution)
why is market research important?
- amounts people are wiling to pay
- quantities they buy
- time and place they buy
- media they see
what insights are provided by market research?
- dimensions of the market
- competitor strategy
- needs and wants of customers
- market segments
what is production orientated?
- business develops products based on what it is good at doing
what is marketing orientated?
- businesses respond to customer needs and wants
- designs products accordingly
what are types of market research?
- primary
- secondary
what is primary research?
- data collected first hand for a specific purpose
what is secondary research?
- data that already exists and which has been collected for a different purpose
what are advantages of primary research?
- more reliable
- gains opinions
- specific to your business
what are disadvantages of primary research?
- high costs
- time consuming
- inaccurate feedback
what are advantages of secondary research?
- quicker
- cheaper
- lots of it
what are disadvantages or secondary data?
- not specific
- may not be reliable
what is market segmentation?
- involves dividing a market into parts that reflect different customer needs
what are the main market segments?
- demographic
- income
- behavioural
- geographical
what is market positioning?
- when launching a new product/service companies need to decide where they want to position the brand in relation to customer perceptions and positioning of competitors
how is market positioning achieved?
- market mapping
what gives a business competitor advantage?
- prices
- USP
- customer service
- innovation
what’s adding value?
- the difference between the price of the finished product/service and the cost of the inputs involved in making it
what are ways to add value?
- build a brand
- deliver excellent customer service
- add product features
- operate efficiently
