3.1 Marketing, competition and the customer Flashcards
What is the role of marketing?
Identifying customer needs, satisfying customer needs, maintaining customer loyalty, and building customer relationships.
How does marketing identify customer needs?
Through market research, businesses identify what customers want, where they want to buy from, how they want to buy, and any after-sales services required.
What is the importance of satisfying customer needs in marketing?
It ensures the business sells the right product at the right price and place, avoiding revenue loss.
Why is maintaining customer loyalty important in marketing?
Loyal customers make repeat purchases, and it’s cheaper to keep existing customers than to acquire new ones.
How can businesses build customer relationships?
By communicating with customers and adapting to their changing needs, which makes future market research easier.
What are some reasons customer spending patterns change?
Changes in taste/fashion, technological advancements, income levels, and aging population.
How can businesses respond to changes in spending patterns?
By maintaining good customer relationships, improving existing products, developing new ones, and keeping costs low.
What is mass marketing?
Mass marketing targets the whole market, selling the same product to a large population.
What are the benefits of mass marketing?
High total sales, economies of scale, lower average costs, and growth opportunities.
What are the disadvantages of mass marketing?
High competition and the risk of products not meeting specific customer needs.
What is niche marketing?
Niche marketing targets a small segment of the market with specific needs, often catered to by smaller businesses.
What are the advantages of niche marketing?
Higher prices due to specialized needs, less competition, and strong customer loyalty.
What are the disadvantages of niche marketing?
Limited sales potential, high risk, and the possibility of new competitors entering the market.
What is market segmentation?
Dividing the market into subgroups based on characteristics such as age, socio-economic group, location, gender, and lifestyle.
How can markets be segmented?
By socio-economic group, age, location, gender, and lifestyle.
What are the benefits of market segmentation?
What is demographic segmentation?
Dividing the market based on characteristics like age, gender, and income.
What is geographic segmentation?
Dividing the market based on location, such as regional differences in buying habits (e.g., wet areas vs dry areas).
What is psychographic segmentation?
Dividing the market based on beliefs, values, lifestyle, and social status.
How does a business segment by income?
Luxury goods are marketed to high-income consumers, while lower-priced goods target lower-income groups.
How does a business segment by age?
Different age groups need different products, such as nappies for babies, suits for adults, or anti-aging products for the elderly.
Why is it important for businesses to adapt their products for different regions?
Different regions have different tastes, climates, and cultures that influence buying behavior.
How does lifestyle segmentation work?
People at different stages in life, such as single, married, or with children, will have different spending habits and product needs.
What is the benefit of tailoring goods through market segmentation?
It allows businesses to meet specific customer needs and identify gaps in the market.
How does market segmentation help in targeting promotions?
It enables businesses to target promotions more effectively by focusing on subgroups with similar characteristics.
What is a key factor in deciding which segmentation method to use?
The size and potential of each market segment, as well as the company’s image and brand.
Why has the competition in markets increased?
Due to globalization, better transportation, and the rise of e-commerce.
How can businesses keep up with increased competition?
By improving products, launching new ones, maintaining customer relationships, and managing costs effectively.
What is the benefit of economies of scale in mass marketing?
It lowers the average cost of production, enabling higher profits.
What is a disadvantage of mass marketing’s standardization?
It may not meet the specific needs of all customers.
