4.1 Flashcards
what is markering?
marketing is getting the right product to the right costumer at the right price at the right time. And of course, marketing decisions are closely related with the other business functions (Finance, HR and Operations)
what are the two diffrent approches to marketing?
market-oriented or product-oriented approach.
what is the market-oriented approach?
focuses on providing products based on customers needs and wants. This normally comes after market research has been done. For example, improving existing products according to costumersβ requirements.
what is the product orinetated approach?
this approach focusses on making a product first and sell it to the customers without relying on what their needs and wants are.
what are thw advantages of markt oriented approach?
The risk of failure is less since firms bases their approach on market research and are confident that their products will sell.
Market information gives the firms the advantage to respond quickly to changes in the market and also anticipate possible changes.
Market research also gives the firm feedback (by consumers) on the competition.
Firms are constantly exploring opportunities to improve their products and services to adapt to current and future needs of customers.
what are the disadvantages of market orniented approcach?
Conducting market research can be costly and influence heavily in the firmsβ budget.
Risk of Underestimating the Market. When a company uses ineffective data in its approach to reach out to customers the results can be misleading.
Changes in consumers tastes and preferences make it very difficult for a firm to meet every customersβ needs with their available resources.
Uncertainty about the future due to external factors can also affect the marketing planning.
what are the advanntages of product orientated approach?
It allows the business to focus on product quality. Hence, it is associated with high -quality products (i.e. Luxury cars)
It lets technology to be developed and used for a wider range of products.
In industries where the speed of change is low the firm that already built a reputation can succeed
Since the focus is specifically directed to a product, the company can produce this product efficiently and in mass quantities. More quantities can be made at a lower price, which will increase the number produced (known as Economies of Scale).
A small business can focus solely on creating one product and making it the best product possible. Once the design is created, this design can be sent to another factory for production. This can also save on costs (known as Outsourcing).
what are the disadvantegs of product orientated approach?
Less secure than a market orientated approach as there is no established demand or consumer market for the product.
Lack of market research might leave the product blindited and hence unable to adapt to changes in consumer preference and trends.
Because the product orientated approach focuses on selling what is unique about the product instead of how it fits into a consumers wants and needs, another company who has a more developed or innovative product can ealy put the first one out of business.
what is market share?
refers to the percentage of one business share of total sales in the market.
what is the formula for the market share?
π΄πππππ πππππ %=(ππππ^β² π πππππ)/(π»ππππ πππππ ππ πππ ππππππ) ππππ
what are the two diffrent ways to messure market share value?
Market share can be measured in value (revenue) or volume (units)
By volume β measured in units, hence a quantitative measure. It measures the number of goods bought by the customers (i.e. bags of rice)
By value β measured in monetary value, hence in a currency. It measures the amount spend by costumers on good sold by a firm.
what can an increased market share mean?
An increase in market share could mean that the business is successful compared to his competitors and hence generates more profits being one of the key players in the industry
what is market size?
represents the total sales of all businesses in a given market. Same as market share, it can be measured by value (monetary value) or by volume (units). The calculation of the market size will help to identify (calculate) the market growth.
how can we calculate market size?
We can calculate the market size adding up the Revenues (generated by the sales) of all the companies in that market
what is market growth?
Market growth β refers to the increase in the size of the market per period of time (usually a year). It can be measured by an increase in the value or volume of sales in the market. It is represented as a percentage change to indicate the extent of the market growth
