Marketing , Competition and the customer

Question 1

Marketing

Answer 1

is identifying customer wants and satisfying them profitably

Question 2

Customer

Answer 2

is a person, business or other organization which buys goods or services from a business.

Question 3

Customer loyalty

Answer 3

is when existing customers continually buy products from the same business

Question 4

Customer relationships

Answer 4

is communicating with customers to encourage them to become loyal to the business and i’s products.

Question 5

Role of marketing

Answer 5

• Identifying customer needs
• Satisfy customer needs
• Maintain customer loyalty
• Build customer relationship to get info about the customers
• Anticipate changes in customer needs

Question 6

how does identifying customer requirements help the business

Answer 6

• Raise customer awareness of a product or service of the business
• Increase revenue and profits
• maintain/improve the image of products or a business
• target a new or market segments
• enter new markets at home or abroad
• develop new products or improve existing products

Question 7

Market share

Answer 7

is the percentage of total market sales help by one brand or business

Question 8

Why customer spending patterns change

Answer 8

• Customer tastes and fashion change – Fashion may change and customers may want new clothes than what they wore last year
• Changes in technology – with new products being developed (iPads, phones etc.) computer sales have fallen in many countries, when new products are made, old ones won’t have high sales.
• Changes in incomes – if an economy has high unemployment then many consumers would buy cheaper products
• Ageing populations – the age structure of the population in many countries is changing to a greater percentage of older people. So increase in products such as anti ageing face creams

Question 9

Why have some markets become more competitive

Answer 9

• Globalization of markets
• Transportation improvements
• E-commerce allow customers to buy products from anywhere

Question 10

How can businesses respond to changing spending patterns and increased competition

Answer 10

• Maintain good customer relationships
• Keep improving its existing products
• Bring out new products to keep customer interests
• Keep costs low to maintain competitiveness

Question 11

Consumer

Answer 11

buys products or services for personal use, not to re-sell

Question 12

Mass market

Answer 12

When the same product is sold to the entire market

Question 13

Pros of mass markets

Answer 13

• Total sales are very high
• can benefit from economies of sale
• risks can be spread between the various products, if one product fails, the other ones might succeed
• opportunities for growth of the business

Question 14

Cons of mass markets

Answer 14

• High levels of competition between businesses selling similar products
• Ad and promo costs are high
• Standardised product produced might not meet the specific needs of all customer or potential customers, so loss of sales

Question 15

Niche market

Answer 15

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

Question 16

Pros of niche markets

Answer 16

• Small businesses may be able to sell successfully in niche markets, since larger markets will concentrate on large competitors. therefore reduced competition
• The customer needs can be more focused, may lead to high customer loyalty and good relations

Question 17

Cons of niche markets

Answer 17

• Niche markets are usually small and have limited sales potential, so expansion of the business is less likely, unless they go outside the niche market
• Niche markets will only specialise in one product, so if the product is not in demand, business will fail as it cannot spread risks

Question 18

Market segments

Answer 18

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

Question 19

Advantages of market segmentation

Answer 19

• Make marketing cost effective by producing a product, which closely meets the needs of these customers and targeting its market efforts only on this segment
• Higher sales and profits, since it is cost-effective
• Identify markets that have not met it needs fully, offers opportunities to increase sales