3.1 Marketing, competition and the customer Flashcards
Identifying customer needs
One role of marketing
Finding out what kind of products people want, what they are willing to pay, how they want to buy, and what after sales services are needed
Main roles of marketing
Identifying customer needs
Satisfying customer needs
Maintaining customer loyalty
Building customer relationships
Maintaining customer loyalty
One role of marketing
Building relationships and keeping links with customers by keep meeting their needs and adapt to their expectations to keep them as loyal customers
Satisfying customer needs
One role of marketing
Able to satisfy the customer demands by able to choose the the right product, price, and place
Building Customer Relationships
One role of marketing
Building a long term relationship to adapt to changing needs and it makes market research easy
Why do customer spending habits change?
Taste and Fashion changes
Change in technology
Change in income (lower income makes them choose cheaper products)
Aging population (average age of economy getting older in most places so change in demand for types of products)
Consumer
Someone who buys products from a company for their own personal use, not to resell
Important of changing Customer Needs
Business will fail if they don’t meet
Customers and primary source of income
Customers are ‘king’ since businesses keep up with their tastes in order to adjust in their business
Why are some markets more competitive now?
Globalisation (products sold everywhere)
Transportation (cheaper and faster to distribute globally)
E-commerce/Internet (customers can easily buy online)
How businesses can respond to changes in the market
Maintain customer relationships (so they know the changing needs)
Improve existing products so they are unique
Introduce new products based on changing trends
Keep costs of products low
Mass Marketing
Selling the same product to the whole market
Many people in the general population will see/buy it
Products designed to appeal to all
Advantages of Mass Marketing
Total sales are high
Lower average costs
Spreads risk, if one item fails the others can keep selling
Opportunity for growth
Niche Marketing
Selling products to a small segment of the market
Sold to a small number of customers
Small segment of a larger market
Disadvantages of Mass Marketing
High degree of competition
Doesn’t meet specific needs of customers
Advantages of Niche Marketing
Charge higher price
Closely meet customer needs
Large businesses focus on mass so reduced competition for smaller
Disadvantages of Niche Marketing
Relatively small sales
Specialised products have high risk
High profits may attract new competitors
Market segmentation and examples
Breaking down the market into sub-groups with similar characteristics to make niche marketing
Group examples:
Socio-economic
Age
Region/Location
Gender
Use of product
Lifestyle
Benefits of Market segmentation
Tailor goods to specific needs
Identifies gaps in market
Research easier
Target promotion and advertising
Socio-economic Groups in Market segmentation
One example of market segmentation
Group people based on their income
Such as people with less income may want cheaper alternatives of products
Age Groups in Market segmentation
Group the market by different age groups
Such as elderlies may want ageing creams, medicine, etc.
Region groups in Market segmentation
Different people in different locations will have different spending habits, group them based on that
Such as adapting to local trends, weather, etc.
Gender groups in Market segmentation
Group market based on gender preferences
For example women may want makeup, perfume, or lady products
Lifestyle groups in Market segmentation
Group market based on lifestyle (Single, Married, Children, etc.)
For example if you are single you may want minimal furniture, meal for one, travel solo trip
