1.1.1 -1.1.3 Meeting consumer needs Flashcards
what are three types of markets?
Mass
Niche
Dynamic
define market
a set of arrangements that allow buyers and sellers to communicate and trade in a particular range of goods and services
define brand name
a name, term etc that allows consumers to identify the goods and services of a business & to differentiate them from those of competitors
define e-commerce
conducting business transactions online
define online retailing
the retailing of goods online
define marketing
a management process involved in identifying, acticipating and satisfying consumer requirements profitably
define market share
the proportion of total sales in a particular market for which one or more businesses are responsible
-exp as percentage, calc through volume or sales
define mass market
a very large market in which products with mass appeal are targeted
define niche market
a smaller market, usually within a large market or industry
what are the products in a mass market like?
aimed at larger group
wide appeal to a variety of people
standard
what are the products in a niche market like?
aimed at a specific group
specialised product to meet particular requirements
give examples of mass market products
Volkswagen cars
Cadbury choclate
give examples of niche market products
Moo-free a diary free choclate
Rolls Royce
what are some features of a mass market?
more consumers
lots of competitors -> harder to differentiate
higher sales volume -> use EoS to reduce unit price
can sell at a cheaper price
-to achieve need large amounts of capital
what are some features of niche market
more risky
higher prices
less consumers
if changge in market -> directly affects through a reduction in sales -> struggle to survive
less competition -> easier to differentiate and charge higher
what is market size?
diff to market share
-total value of shares in a market over a time period
-can be measured through total numers of consumers in the market
what is market share?
the proportion of the total market the business holds
cacl through sales in a certain time period by total sales in the total market
-mass markets -> larger market size
how do firms in a mass market make their brand distinctive?
Strong branding - clear and obvious name, logo which is instantly recognisable -> help differentiate from comp.-> encourages consumers to buy -> affects market share
-focus heavily on branding due to competitive environment
what are dynamic markets?
markets which are always changing, they change and evolve rapidly.
how can dynamic markets change?
consumer preferences change - social trends
innovation - new products emerge, old ones disappear
ways in which consumers shop e.g. online shopping
competitors enter/leave market
changes in legislation
how would businesses in dynamic markets keep up?
by adapting to changes by consistently conducting market research
-> higher costs as need to catch onto trends to survive
how has online retailing changed how markets operate?
growth has negative impact on traditional retailers as they have been forced to shut down
-as online shops are easily accessed, open 24/7 and comparison sites exist so consumers change get the best price
what are some benefits to online retailing?
lower business costs -> no need for physical shop or same level of staff
open 24/7 so customers can shop anytime and from anywhere
compare prices
what are some disadvantages to online retailing?
more competition due to access to comparison sites
some consumers prefer to see the product before buying -> improve through good customer service like online chat services
need to protect personal details from cyber criminals -> if site is insecure -> affect reputation
what is direct competition?
when two or more businesses sell similar products that appeal to the same group of customers
what is indirect competition?
when two or more businesses sell products that are different but they are competing for the same customers
e.g. indian takeaway competes with italian takeaway
how can the level of competition affect how a firm operates?
inf decisions on marketing mix
-product -> need to be of good quality and be distinctive from competitors through innovation
-promotion -> need informational and persuading campaigns and advertising -> higher marketing spend -> focus on branding
-pricing -> use a competitive pricing strategy, penetration pricing to tempt customers away from comp
-place -> need to be convenient for customers to buy, maybe open an online shop
what is a risk?
when taking a risk, the probabilities of the different outcomes are known
-minimise negative outcomes
-controllable
what is an uncertainty?
unexpected events
-external events like covid which are difficult to predict when or if they will happen -> the outcome
-often affect whole market
what is a franchise?
an agreement that allows a business to use the idea, name and reputation of an established business.
how does comp affect the nature of ownership?
new firms may prefer being a franchise -> easier to succeed
-new/small firms struggle to survive in mass markets due to lack of budget needed to attract attention & gain market share -> more investment -> change to limited
-established comp need to change the nature of their ownership to gain more market share e.g. ltd -> plc
define consumer panels
groups of customers are asked for feedback about products over a period of time
define database
an organised collection of data stored electronically with instant access, searching and sorting facilities.
define focus groups
where a number of consumers are invited to attend a discussion about a product led by market researchers
define market orientation
an approach to business which places the needs of consumers at the centre of decision making
define market research
the collection, presentation and analysis of information relating to the marketing and consumption of goods and services
define market segments
part of a whole market where a particular customer group has similar characteristics
define primary research
the gathering of new info which doesn’t already exist
define product orientation
an approach to business which places the emphasis upon the production process and the product itself
define qualitative research
the collection of data about attitudes, beliefs and intentions
define quantitive research
the collection of data that can be quantified
define respondent
a person or organisation that answers questions in a survey
define sample
a small group of ppl who must represent a proportion of a total market when carrying out market research
define secondary research
the collection of data that is already in existence
define socio-economic groups
division of ppl according to social class
define added value
the extra features which may be offered by a business when selling a product such as high quality that helps to exceed customers expectation
define competitive advantage
an advantage that enables a business to perform better than its rivals in the market
define market maps
two dimensional diagram that shows two of the attributes or charachteristics of a brand and those of rival brands in the market
define market positioning
the view consumers have about the quality, value for money and image of a product in relation to those of competitors
define product differentiation
an attempt by a business to distinguish its product from those of competitors
define reposition
change the view consumers have about a product by altering some of its characteristics
define USP
the feature of a product that clearly distinguishes it from its rivals
what does a business which is product orientated focus on in production and marketing decisions?
design
quality
performance
whether its what the consumers actually want
what do product orientated b use to develop new products?
advances in technology to make products they think that customers will like
create new and innovative products and put them on market -> persuade consumers to buy them
give an ex of a product orientated business?
Apple with the iphones
what does market orientated b do when making production and marketing decisions?
invests a lot in market research to find out consumer wants and needs
tailored products -> higher prices
why is market orientation considered a low risk strategy?
based on consumer feedback
firms can predict more accurately the levels of demand
what does market research include when looking at markets?
the competitors
the products of comp
the consumers in the market
why is effective market research so important to a business? what info is found
find out consumers needs and wants, needs = essentials like food so willing to pay more and wants = non essentials, consumers choose to pay for -> ANTICIPATE TO GET AHEAD
-predict levels of demand for a product -> get correct amount of supply & take action if likely to fail
-learn about how consumers behave in relation to a product and how they use the product
-consumers are willing to pay for a product
-identify comp
-PESTLE
overall what does market research help b. do?
make informed decisions
helping reduce risks
what are some features of quantitative research?
numerical stats
closed questions w fixed, predetermined answers
less opinionated
more interpreting to do
what are features of qualitative research?
opinions of consumers
open questions
-harder to use stats tests with / analyse numerically
-more INFORMATIVE
what is a benefit of quantitative research comparted to qualitative?
can be statistically analysed
-> makes it quicker and easier
is it true that effective MR combines both qualitative and quantitative research?
YeS
Explain what primary research is?
-aka as field research
collect data through questionnaire, surveys, observations, interviews and focus groups
-test marketing, launching a product in one regoin and measure sales & consumer response before launching it
-sampling is done to make predictions about whole market
-needed to find out what consumers think of a new product or advert
give advantages of primary research?
specific to purpose its needed for
good for niche markets
exclusive to the business who researched it
give disadvantages of primary research?
labour-intensive
expensive
slow
explain what is secondary research?
aka desk research
includes info from GOV publications, reliable internet sources like statistica, trade magazines and market reports.
-used to get an initial understanding of a market
give advantages of secondary research?
easy
faster & cheaper
give disadvantages of secondary research?
may be unsuitable and have errors/ be out of date
Why do samples need to be representative?
so it represents the consumer’s of the business and improve the accuracy
Moreacc = lower cost as saves time resources
What is a representative sample?
a sample with similar proportions of ppl in terms of categories like age, gender and income
Bigger sample = better chance of being representative =smaller margin of error
how can the size of the sample be affected?
by the budget of the business
Limited = risk of inaccurate info Inc
Unlimited = less risk of inaccurate info Inc
-depends on size, type of market and whether a firm prioritises cost
how will a new business be affected from launching in a niche market?
its risky
Benefits from accurate research as they can make more accurate representation of consumers needs
what conditions would a business prioritise cost over accuracy?
when a business launches a product in a competitive market which is similar to products on the market
-needs to spend less due to the already established high demand
how can market researchers avoid Bias?
Avoid biased questions , q which lead the respondent to give a particular answer
Avoid giving personal opinions when delivering Qs
Be open to recieving any answer
what are the two types of Bias?
Interviewer Bias - their opinions can influence the iterviewee
Respondent Bias - when their response isn’t their true answer due to thinking their answer will be socially unacceptable
How can technology support MR?
use of Ict makes it easier, cheaper and quicker
Can gather more info than traditional methods as can get a wider sample
Ex. Are websites, social media & databases
how can businesses use websites in MR?
use its own website by conducting surveys or analysing activities of ppl using the site
Look at competitor websites to gather info about new products
Read reviews from customers but can be skewed to be more negative as customers more likely to leave reviews after a bad exp ->not representative
what is a limit to a business using websites for MR?
can give general info and not specific reasons to why their websites is less succesful
How cam social networking be used in MR?
the use of internet based platforms to make connections;
-connect to customers through Facebook etc
-post content and monitor the responses
- can pay to the social media site to post a survey q about products on consumers feeds
-track current trends
What is a limit of businesses using social media as MR?
not all consumers use the same sites
Leading to very different results depending on the site used
how can databases be used in MR?
W own databases -collect abt products & customers and see the preferences based on what they buy - makes cheaper and more effective
Use other dbs - online for a fee, gives info on trends, businesses and consumers in a market = quick & cheap but most data is quantitative
what is segmentation?
means dividing a market into groups of buyers.
Those In one segment share one or + characteristic
How does segmentation help MR?
reveals more about the types of consumers in the market
Z
As each segment, has different needs and wants so require a different marketing mix
-allows for targeting of marketing
-identify the segments which needs are met -solve and launch a product for it
give examples of how a market can be segmented?
demographic e.g. Age, gender, socio economic class
Geographic - e.g. Neighbourhood, City, country, continents, used by multi national companies
Income - luxury products aimed at high income groups
Behavioural - e.g. Amount of use, lifestyle, hobbies & interests
what does market mapping do?
compares two features of products or brands, shows extremes, which are important to customers e.g. Low price vs high price
Laid as a matrix, the products are positioned according ti where they are judged in between the two extremes
What info can a business gain from analysing market maps?
on gaps in the market
If there is demand for that product
Its closest competitors - marketing strategy
If sales are declining
Shows how much customers are willing to pay - pricing strategy
give limits of analysing market maps?
time consuming
Oversimplifies
The positions of products are often a matter of opinion
Can be biased
what is an example of a how a business can have CAnd increase sales and profits?
Lower Cost
Product innovation
Advertising and marketing
Product differentiation
Reliability and quality
Good customer service
Convenience
How do firms gain a CA?
by adding value
Inc the difference between costs and the price
Done by inc price or Dec costs
given formula for competitive advantage?
Added value = price product is sold for - cost of making product
