Marketing, Competition and Customer (Chapter 10).

Question 1

What is marketing?

Answer 1

Marketing is identifying customer wants and satisying them profitability.

Question 2

What is a customer?

Answer 2

A customer is a person, business or other organisation which buys goods or services from a business.

Question 3

Large business will have different sections within their marketing departments:

Answer 3

• The Sales team.
• The market research section.
• The promotion section.
• Distribution.

Question 4

What does distribution do?

Answer 4

Transports the products to the market.

Question 5

What is the sales team responsible for?

Answer 5

The sales of the product.

Question 6

What is the market research section responsible for?

Answer 6

Finding out customers’ needs, market changes and the impact of competitors’ actions.

Question 7

What does the promotion section deal with?

Answer 7

Organising the advertising for products.

Question 8

What 5 things are the central roles of marketing?

Answer 8

• Identifying customer needs.
• Satisfying customer needs.
• Maintaining customer loyalty.
• Building customer relationships to gain information about customers.
• Anticipate changes in customer needs.

Question 9

What is customer loyalty?

Answer 9

Customer loyalty is when existing customers continually buy products from the same business.

Question 10

What are customer relationships?

Answer 10

Customer relationships is communicating with customers to encourage them to become loyal to the business and its products.

Question 11

What is market share?

Answer 11

Market share is the percentage of total market sales held by one brand or business.

Question 12

If the marketing department is successful in identifying customers requirements and predicting future customer needs, it should enable the business to: 7.

Answer 12

• Raise customer awareness of a product or service of the business.
• Increase revenue and profitability.
• Maintain or improve the image of products or a business.
• Target a new market or market segment.
• Enter new markets at home or abroad.
• Develop new products or improve existing products.
• Increase or maintain market share.

Question 13

What is a consumer?

Answer 13

A consumer buys goods or servoces for personal use - not to re-sell.

Question 14

Why customer/ consumer spending pattterns change?

Answer 14

• Consumer tastes and fashions change.
• Changes in technology.
• Changes in incomes.
• Ageing products.

Question 15

Why have some markets become more competitive (3 reasons)?

Answer 15

• 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.
• Internet/E-Commerce has meant that consumers can search for products and buy from overseas markets.

Question 16

In order to remain successful, a business may need to do the following: 4.

Answer 16

• Maintain good customer relationships. This has a key role in continuing to meet customer needs and it also provides market research information about customers.
• Keep improving its existing product.
• Bring out new products to keep customers’ interest. Helps the business to maintain, or even increase, its market share.
• Keep costs low to maintain competitiveness.

Question 17

How can market be measured? 2.

Answer 17

It can be measured by the total number of sales or by the value of the sales for that good or service by all suppliers of that particular good or service.

Question 18

What are the two types of marketing?

Answer 18

These can be either mass market or niche markets.

Question 19

What is meant by mass market?

Answer 19

Mass market is where there is a very large number of sales of a product.

Question 20

What are the 4 advantages of selling to a mass market?

Answer 20

• Total sales in these markets are very high.
• The business can benefit from economies of scale.
• Opportunities for growth of the business due to large potential sales.
• Risks can be spread.

Question 21

What are the 3 disadvantages of selling to a mass market?

Answer 21

• High levels of competition between businesses selling similar products.
• High costs of advertising and promotion.
• Standardised products or services are produced and so many not meet the specific needs of all customers or potential customers.

Question 22

What is meant by a niche market?

Answer 22

A niche market is a small usually specialised, segment of a much larger market.

Question 23

What are the two advantages of niche markets?

Answer 23

• 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.
• The needs of consumers can be more closely focused on and therefore targeted, by businesses in a niche market.

Question 24

What are the two disadvantages of niche markets?

Answer 24

• Niche markets are usually relatively small and therefore have limited sales potential.
• Often businesses in a niche market will specialise in just one product and this is risky because if the product is no longer in demand then the business will fail.

Question 25

Define market segment.

Answer 25

Market segment is an identifiable sub-group of a whole market in which consumers have similar characteristics or preferences.

Question 26

What three things can segmenting a market help a business to do?

Answer 26

• Make marketing expenditure cost-effective by producing a product which closely meets the needs of these customers.
• Enjoy higher sales and profits because of cost-effective marketing.
• Identify a market segment which is not having its needs fully met and therefore offers opportunities to increase sales.

Question 27

What are the six ways of segmenting a market?

Answer 27

• By socio-economic group.
• By age.
• By region/location.
• By gender.
• By use of the product.
• By lifestyle.

Question 28

What are three factors a business will consider before choosing an appropriate method of segmentation?

Answer 28

• Detailed analysis of the market and the size of each potential segment in terms of consumers and likely sales.
• Company image and brand image.
• Costs of entering each segment.