1.1 The market Flashcards
what is a mass market
advantages
disadvantages
= products and services that are advertised in the same way at the same time to the same people
+ lower average costs - economies of sales
+ higher revenues
+ wider target market
- more competition
- homogeneous products need to be differentiated
- low flexibility
what is a niche market
advantages
disadvantages
= market that caters to specific consumer demands \+ charge a premium price \+less competition \+ high revenues - inconsistent demand - higher unit costs
what is market share and how is it calculated
% of a market that a business owns
= sales of x / total sales x 100
what should marketing objectives be in order to be effective
- be quantifiable
- measurable
- set within a time frame
P - profitable
O - offensive - attacking market and leading
I - integrated - flow through the company
S - strategic - analysing
E - effective execution
what is a market strategy
= medium to long term plan for meeting market objectives through the marketing mix
what are reasons for effective marketing
- help to meet consumer needs
- potentially increase market share
- attract more customers
what are characteristics of effective marketing
- identify target market
- focused market research
- focus advertising
- segment markets
what are 4 key factors to dynamic markets
- online retailing
- how markets change
- innovation and market growth
- adapting to change
how does competition affect the market
- makes it hard to charge higher prices - competitive pricing, predatory
- usually improves customer service model
- more innovative and creative
what is market orientation
= take into account the wants and needs of the customer before making a decision
= puts the customer at the heart of the decision
what is product orientation
any negatives?
= leads managers to focus on what the firm does best = internal efficiency before customer preference
= will lead firm to 2 approaches:
- HARD SELL = large sales force, individual targets, low salaries
- CUTTING COSTS & PRICES = without any loss of profit margin
- doesn’t take into account changing customer needs
- lose focus on reliability
primary research
- advantages
- disadvantages
- methods
= process of gathering information directly from people within your target market
= surveys, questionnaires, focus groups, interviews
\+ aim questions directly to objectives \+ up to date information \+ assess psychological factors of consumer - expensive - risk of bias - may not be able to use all data
secondary research
- advantages
- disadvantages
- methods
= utilising data that already exists
= internet, annual records, government data
\+ often obtained without a cost \+ good overview of market \+ usually based on large markets - not updated regularly - not specific to objectives - time consuming
qualitative research
- 2 main forms
= research about the attitudes, motivations and buying habits of consumers
= doesn’t produce statistics
GROUP DISCUSSIONS
= free ranging talks within a group
= may reveal a problem or opportunity the company hadn’t anticipated
= reveal customer psychology
DEPTH INTERVIEWS
= informal and in-depth interviews with consumer
= same function as group discussions but avoids risk of group opinion swaying individual
quantitative research
- 3 key aspects
- limitations
= questions on a large set of sample size to provide statistically valid and accurate data
KEY ASPECTS
- sampling - typical to the whole population
- unbiased - open and closed questions
- validity - accurate results
- findings might not be meaningful
- sample size - too small doesn’t cater for everyone, too big has lots of variation
- sample bias
Use of technology to support market research
websites
- target home page
- could be bias
- automated responses
social media
- interactive - fuller understanding
- consumer and brand
- cost effective
- wide spread
what is market segmentation
= finding ways to divide a market to identify untapped opportunities such as age, gender, location
= acknowledgement from companies that no one is the same
= increased customer satisfaction
what is market mapping
= when companies need to decide where they want to position the brand in relation to customer perception and competitors
= carried out in 2 stages:
- identify key features within market
- place every brand on grid revealing gaps in market
what is a competitive advantage
= companies ability to generate large than average turnover due to advantage they have in the market - cost advantage - differentiated advantage = premier price = brand loyalty
what is product differentiation
= how a business differentiates their products from competition - reputation, service, value
= unique selling point
can be created by:
- unique design
- unique function
- unique taste
- ergonomic factors (make it more efficient)
what is the purpose of differentiation
- enables business to increase prices if costs go up
- higher differentiation = lower price elasticity
- insulates product from competitive markets
what is added value
- advantages?
= difference between price that is charge to customer and costs of input required to create the product
- can be through design, production or marketing
+ can charge a premium price
+ customer loyalty
+ protection against competition
