1.2 Flashcards
Market:
Definition: Any place where buyers and sellers meet.
Example: Amazon website, shopping mall.
Needs vs. Wants:
Needs: Essential (e.g., shelter, food).
Wants: Non-essential desires (e.g., Nike trainers).
Aim of Marketing:
Objective: Identify, anticipate, and satisfy consumer needs profitably.
Tool: Market research systematically gathers consumer data.
Price:
Definition: Amount customers are willing to pay.
Benefit: Helps price competitively, design promotions.
Quality:
Definition: Standard of excellence expected by customers.
Benefit: Builds customer loyalty, positive word-of-mouth.
Choice:
Definition: Range of preferences customers want.
Benefit: Increases satisfaction, loyalty with varied options.
Convenience:
Definition: Value of easy access and use.
Benefit: Builds loyalty, repeat sales with efficient experience.
Benefits of Understanding Customers:
Business Survival:
Importance: Essential for both new and established businesses.
Achieved by: Addressing customer needs for sustained success.
Benefits of Understanding Customers:
Generating Sales:
Importance: Crucial for business success and growth.
Achieved by: Tailoring products/services to customer preferences.
Benefits of Understanding Customers:
Ensuring Business Thrives:
Importance: Key to long-term success and competitiveness.
Achieved by: Adapting strategies based on customer understanding
Two benefits of understanding customers
generating sales
business survival
How does understating customer needs generate sales?
Tailor products to meet needs
increases likelihood that customers will make a purchase which generates sales revenue
How does relationship building with customers generate sales ?
can lead to repeat business, as customers are more likely to return to a business that understands and values them
How does targeted marketing generate sales?
targeted marketing campaigns speak directly to their customers and can increase the effectiveness of marketing efforts, leading to more sales
competing - how understanding customer needs leads to business survival
if businesses fail to meet the needs of their customers, they risk losing customers to competitors who do
changing preferences - how understanding customer needs leads to business survival
customer preferences can change quickly
business that fail to keep up with these changes risk becoming obsolete
building reputation - how understanding customer needs leads to business survival
building a positive reputation leads to repeat business and positive word-of-mouth referrals which keeps a business going
Q: What is market research?
A:
Market research is the collection and analysis of information about a market.
Q: Why is market research important for businesses?
A:
It helps reduce risk, identify customer needs, find market gaps, and make informed decisions.
What are the two main methods of market research?
A:
Primary Research and Secondary Research.
Q: Name primary methods of primary research.
A:
Surveys, Observation, Interviews, Test Marketing, and Focus Groups.
What’s the difference between quantitative and qualitative data in market research?
A:
Quantitative data is numeric (e.g., sales), while qualitative data is descriptive (from conversations).
Q: What are the limitations of market research data?
A:
Qualitative data may have small samples and bias; quantitative data can be expensive and outdated.
How has social media impacted market research?
A:
Social media has sped up communication, provided cost-effective polling, enhanced brand loyalty, and encouraged customer feedback.
Q: What is market segmentation?
A:
Market segmentation is the process of dividing a single market into submarkets based on different consumer characteristics.
Q: What factors do businesses use for market segmentation?
A:
Geographical location, demographics, behavior and lifestyle, age, or gender.
Give examples of market segments in the crisp market.
A:
Dinner party snacks, health-conscious crisps, lunch box value snacks.
Q: What are the advantages of market segmentation for businesses?
A:
Recognises diverse consumer preferences, allows tailored product and marketing strategies, less wasteful marketing.
Q: What are the disadvantages of market segmentation?
A:
Difficulty in identifying segments, consumers belonging to multiple segments, increased cost for detailed market research.
How does market mapping help identify gaps in the market?
A:
Market mapping visually shows a product’s position relative to competitors, and gaps on the map may indicate market niches.
Q: What does a saturated market map indicate?
A:
High competition, low-profit opportunities, and no available market niches.
Q: What are the limitations of market mapping?
A:
Expense in primary research, simplicity (only two criteria), market dynamics not captured at a specific point in time.
ways to segment a market
demographics
behaviour and lifestyle
age or gender
location
Q: What is competition in business?
A:
Competition happens when two or more businesses offer similar things to the same group of customers.
Q: What are the two types of competition?
A:
Direct competition (same products) and indirect competition (different products but targeting the same customer money).
Q: What benefits do customers get from competition?
A:
Customers enjoy lower prices, better quality products, and improved service.
Q: How do businesses check their competitors?
A:
Businesses look at factors like price, quality, location, product range, and customer service.
Q: Why is pricing crucial in a competitive market?
A:
Pricing is vital because businesses need competitive prices to succeed and make a profit.
Q: How does competition affect product development decisions?
A:
Competitors influence businesses to create new features or entirely new products to stay ahead.
Q: Why is differentiation important in marketing?
A:
Differentiation helps businesses stand out from competitors, making their products or services unique.
Q: How does competition impact operational decisions in a business?
A:
Competitors influence how a business operates, like choosing the best way to produce things.
Q: What are some areas where competition influences decision-making in a business?
A:
Pricing, product development, marketing, and operational decisions are all influenced by competition.
` impact of competition on business decisions
product development
operations
marketing
pricing
