Marketing - 3.1

Question 1

Role of marketing

Answer 1

• identifying + satisfying customer needs and wants

- building customer relationships and loyalty

Question 2

Why spending patterns may change

Answer 2

• change in income
• change in fashion/taste
• better technology
• ageing population

Question 3

Why markets are becoming more competitive

Answer 3

• globalisation
• internet/e-commerce
• transport improvements (products transported more easily through countries - same product in more shops now)

Question 4

Mass marketing - define, advantages, disadvantages

Answer 4

Mass marketing is when a product appeals to the whole market (large target market)

Advantages:
Large sales
Economies of scale
Risk is more spread

Disadvantages:
Higher competition
Does not meet specific needs
Higher advertising cost

Question 5

Niche marketing - define, advantages, disadvantages

Answer 5

Niche marketing: product is specialised with a small target market

Advantages:
Less competition
Can meet specific needs
More loyal customers
Can charge higher prices

Disadvantages:
Limited sales
More risk - demand can fall

Question 6

Market segments - define, advantages, disadvantages

Answer 6

Market segments: market divided into sub-groups with similar characteristics

Advantages:
Meets specific needs
Identifies gaps
Can sell more products for different sub-groups
Helps decide best place to sell
Research is simpler as know which people to ask
Help target advertising

Disadvantages:
No economies of scale

Question 7

Methods of segmentation

Answer 7

Demographic: age, income, ethnic group, gender, family size

Geographic: regions in country, regions in the world, countries in the world