Business Theme 1.1 Flashcards
Theme 1.1
Mass Market - Explain.
A product is sold to all consumers in the same way
Benefits of mass marketing
-Widest Customer Base
-Lower risk-resource focused on one large market
-Low units cost from economies of scale
-Market research costs relatively low.
Disadvantages of mass marketing
-Lots of competition
-Large products require expensive branding
-High volume production not flexible to demand changes
What are niche market characteristics?
A small segment of a much larger market. Sales will be lower but prices can be higher.
Advantages of Niche Markets
-Charge higher price
-Low competition due to customers being loyal
Disadvantages of Niche Markets
-Small segment of a much larger market
-Lack of EOS
-Risk of over dependance on a single product or market
-Likely to attract competition if successful
-Vulnerable to market changes
Market Size Formula?
Sales of x/Total sales in whole market x 100
Dynamic Market - explain
A market that is changing quickly
Why is online retailing a dynamic market?
It is constantly changing, developing, expanding and offering customers new products.
Adv of “Online retailing”
-Opportunities to grow
-Stock can be easily withdraw or updated due to dynamic market change
-Low overheads
-Easily become international
-Orders can be taken automatically
-Easy to set up
-Open 24/7
-Flexible hours
-Customers prefer online browsing than going into a shop
Disadv of “Online Retalining”
-Security issues
-Owners need IT skills
-Issues with sending goods back will put off the customer
-Competitors
-Problem with fraud
-VERY competitive market
What is meant by “Niche Market”
A small group from a large group of a market.
Definition of Primary Research
Data collected first hand for a specific research purpose
Definition of Secondary Research
Data already exists and which has been collected for a different purpose
Different types of Primary Market Research
-Focus Group
↪Having a bunch of customers in a room and have their thoughts and opinions on a new product.
-Interviews
↪Interviews with suppliers or with customers
-Surveys
↪Online surveys will give the business the feedback form their customers.
-Mystery Shoppers
↪People who experience the customer service and report their findings back to the business.
-Product Testing & Trial
↪Gaining insight and feedback of a product before being released to the public
Advantages of Primary Market Research
-Directly focused to the research objectives
-Research is up to date
-More detailed insights
Disadvantages of Primary Market Research
-Time consuming
-Risk of survey bias
-Quite Expensive
Types of Secondary Market Research
-Mark Report
↪Varies amounts of market report.
Specialised in sectors
-Trade & Industry Associations
↪Organisation of multiple similar businesses in a sector.
-Sales Transactions
↪Gather data from each transaction
-Big Data
↪Many transactions are recorded including digital transactions.
-Analytics
↪Marketing efforts through data visualisation.
Advantages of Secondary Market Research
-Often free and easy to get
-Good source of market insight
-Quick to access and use
Disadvantages of Secondary Market Research
-Can be quickly out of date
-Not always specific to research needs
-Specialist report often quite expensive
What are the 4 P’s
-Product
-Price
-Place
-Promotion
What is Positioning Maps
A positioning map can be produced by a business in order to try and find any gaps in the market
What are the axis for positioning Maps?
They can be anything as long they are the opposite. For example, “Expensive” and “Cheap”
Advantages of Positioning Maps
-Helps a business look at different competitors
-Can support marketing and decision making in terms of the marketing mix includes price,promotion
-Can assist in repositioning a product/brand in light of the findings about consumer perceptions
-Can help the research and development of new products
Disadvantages of position maps
-2 dimensional therefore only one attributes can be analysed on one map
-The information needed to plot the maps can be expensive to obtain, requiring the use of primary research
-There may also be a difference between consumers’ perception of the brand’s benefits and the actual benefits
-Less useful to assess a corporate brand image however more useful for individual brand.
Explain Competitive advantage
Competitive advantage is a set of unique features of a company and its products that are perceived by customers as significant and superior to the competition.
Different ways to gain a competitive advantage
-Product design
-Product Quality
-Promotion
-Customer Service
-Delivery Times
-Economies Of Scale
-Flexibility
-Ethical Stance
-Focusing on a particular market segment
