chapter 10 Flashcards
define marketting
Marketing is identifying
customer wants and
satisfying them profitably
define customer
A customer is a person,
business or other
organisation which buys
goods or services from a
business
Large businesses will have different sections within their marketing departments:
- The Sales team is responsible for the sales of the product. It will usually have
separate sections for each region to which the product is distributed. - The Market Research section is responsible for finding out customers’ needs,
market changes and the impact of competitors’ actions. It will report on these
to the Marketing Director and this information will be used to help make
decisions about research and development of new products, pricing levels, sales
strategies and promotion strategies. - Distribution transports the products to the market.
what are the roles of marketing
- identifying customer needs
- satisfying customer needs
- maintain customer loyalty
- Anticipate changes in customer needs
define market share
Market share is the
percentage of total market
sales held by one brand or
business
If the Marketing department is successful in identifying customer requirements
and predicting future customer needs, it should enable the business to:
- raise customer awareness of a product or service of the business
- increase revenue and profitability
- increase or maintain market share
why do customers spend pattern change
- Consumer tastes and fashions change
- Changes in technology
- Change in incomes
- Ageing populations
why are some markets so competitive
- Globalisation of markets has meant that products are increasingly sold all over
the world - Transportation improvements have meant that it is easier and cheaper to
transport products from one part of the world to another.
How can businesses respond to changing
spending patterns and increased
competition?
- Maintain good customer relationships
- Keep improving its existing product
- Bring out new products to keep customers’ interest
define mass market
Mass market is where
there is a very large
number of sales of a
product
what are the advantages of mass markets
- total sales in these markets are very high
-the business can benefit from economies of scale
- risks can be spread, as often the business will sell several different variations
of products to the mass market, and if one variety of the product fails then the
other products may still sell well - opportunities for growth of the business due to large potential sales.
what are the disadvantages of mass market
- high levels of competition between businesses selling similar products
-high costs of advertising and promotion
- standardised products or services are produced and so may not meet the specific
needs of all customers or potential customers, therefore leading to lost sales.
define niche market
A niche market is a small,
usually specialised,
segment of a much larger
market
what are the advantages of the niche market
- Small businesses may be able to sell successfully in niche markets as larger
businesses may not have identified them but concentrated on the mass markets
instead. This will reduce competition from the larger businesses in niche
markets - The needs of consumers can be more closely focused on, and therefore
targeted, by businesses in a niche market. This may lead to high levels of
consumer loyalty and good customer relations
what are the disadvantages of the niche market
- Niche markets are usually relatively small and therefore have limited sales
potential. This means it is likely that only small businesses can operate
profitably in these markets. If the business wants to grow it will need to look
outside the niche market to develop products for mass markets - Often businesses in a niche market will specialise in just one product. This
means that if the product is no longer in demand the business will fail as the
business has not spread its risks. Producing several products rather than just
one product means that if one fails there are other products which are still in
demand and the business carries on trading
define market segment
Market segment is an
identifiable sub-group
of a whole market in
which consumers have
similar characteristics or
preferences
segmenting a market can help a business to:
- make marketing expenditure cost effective by producing a product which
closely meets the needs of these customers and targeting its marketing efforts
only on this segment - enjoy higher sales and profits for the business, because of cost-effective
marketing - identify a market segment which is not having its needs fully met, and
therefore offers opportunities to increase sales
which method of segmenting should be used
- detailed analysis of the market and the ‘size’ of each potential segment in
terms of consumers and likely sales - company image and brand image – a ‘high-tech’ business with an excellent
reputation for innovation will not want to produce low-priced goods for low-
income consumers - cost of entering each segment, for example, with a specially designed product
and advertising campaign
