Meeting Customer Needs 1.1 Flashcards
1
Q
What is a niche in the market?
A
A gap in the market
2
Q
What is a niche market?
A
Targeting a specific segment of a whole market
3
Q
What is a mass market?
A
A product which appeals to the entire population. It is generic and standardised
4
Q
What are two characteristics of a niche market:
A
- Small range of goods
2. May have characteristics some love and some hate
5
Q
What are two characteristics of a mass market:
A
- Appealing, considered ‘smooth’ as there is nothing to like/ dislike
- Long lasting, wide appeal that spans age groups and gender
6
Q
Give three pros of a mass market:
A
- Wide appeal- spreads risk of failure
- Increases market share
- A business is able to spread resources between stores - there is efficient allocation
7
Q
Give three cons of mass markets:
A
- Lots of competitors which means choice for consumers as there are substitutes
- Diseconomies of scale- when bigger can cause problems as there is less control and therefore less motivation for employees
- Homogenous - everything is the same
8
Q
Give two pros of niche markets:
A
- Not a high number of competitors which means a larger market share
- There is higher profit margins as there is a higher price per product
9
Q
Give two cons of niche markets:
A
- Small market so there is less opportunity to sell so they rely on produce
- There is a higher risk of failure
10
Q
What two things are used to calculate the market size, and when one is given you can work out the other, explain them:
A
- Volume = quantity of sales (units)
2. Value = monetary worth of sales (revenue)
11
Q
When given volume, how do you work out value?
A
Volume x sppu = value
12
Q
When given value, how do you work out volume?
A
Value / sppu = volume
13
Q
What are three methods of secondary research?
A
- Internet - google
- Trade press
- Government produced data
14
Q
What are two pros of secondary research?
A
- Often obtained without cost
2. Good overview of market
15
Q
What are two cons of secondary research?
A
- Data may not be updated regularly
2. It’s not tailored to your own needs
16
Q
What are two pros of primary research?
A
- Can aim questions at your research objectives
2. Latest information to market place
17
Q
What are two cons of primary research?
A
- Expensive
2. Risk of interviewer bias
18
Q
Give two examples of primary research with a limited budget
A
- Retailer research
2. Observation
19
Q
What is qualitative research?
A
In depth research into the motivations behind the attitudes and buying habits of consumers
20
Q
What are the two forms qualitative research takes?
A
- Group discussions (focus groups)
2. Depth interviews
21
Q
What are two advantages of group discussion?
A
- May reveal problem/ opportunity the company hasn’t anticipated
- Reveal consumer psychology
22
Q
What is a monopoly of the market?
A
1 company dominating the market
23
Q
What is product orientation, give an example:
A
Where the product is the most important factor when providing products for a market. E.g. Apple produce innovated products
24
Q
What is market orientation?
A
The consumer is the most important factor when providing products for a market. The business has a sensitivity to customers requirements. E.g. Audi - customise your cars
25
Give 4 reasons why businesses need to collect data?
1. Get firm knowledge and understanding of market
2. Assess likely demand
3. Species feedback to modify products
4. Analyse competitors and to differentiate from them
26
Give 5 limitations of market research:
1. Expensive
2. Sample size needs to be large to be more representative
3. It could be biased, questions phrased a certain way could mislead interviewees
4. Time/ season could influence results
5. Reluctance from respondents
27
What are the three sampling methods, and describe them:
1. Random - everyone has a chance and it's equal
2. Quota - choose people who represent target markets
3. Stratified - group is people from target market and chosen at random
28
What are the 7 steps of primary market research?
1. Pose research questions
2. Choose method
3. Choose sample (who to ask)
4. Conduct research
5. Collate data
6. Analyse it
7. Market segmentation
29
What are 5 methods of segmenting people?
1. Income
2. Demographics
3. Geographically (location)
4. Behaviour based on usage or attitude to the product
5. Psychographic (personality type, good with money)
30
Define market segmentation:
An identifiable group where consumers share one or more characteristic or need
31
Give two reasons why it is useful to segment the market:
1. Target a precise audience better
| 2. Promotion is targeted effectively
32
Give three reasons why markets change:
1. Technological change
2. Trends and tastes (fashion and seasonal)
3. Competitors (new entrants)
33
Give an example of a highly effected market in terms of the market changing:
Camera market- when smartphones were brought in, consumers didn't need actual cameras
34
What is a pure play business?
A business which solely exists online
35
Which is the different between innovation and invention:
Invention is coming up with new ideas for products/ processes, whereas innovation is the practical application of new inventories into marketable products of services
36
Give three ways competition affects the market:
1. Stops businesses from become careless/ complacent
2. Prevents excessive pricing
3. Drives innovation
37
Give three pros of e-commerce businesses:
1. Reach a wider audience
2. Orders taken automatically so staff aren't needed
3. Easier to market
38
Give three cons of e-commerce businesses:
1. Need skilled designers so the costs of staff rise
2. Delivery costs are a hassle
3. Older generation don't sometimes have the skills to buy online
39
Market positioning definition:
An effort to influence consumer perception of a brand or product relative to the perception of competing brands or products
40
Businesses use marketing to create value for customers by making two key decisions, what are they:
1. Choose which customers to serve
| 2. Choose how to serve those customers
41
Give a way of analysing market positioning:
A positioning map
42
What are three advantages of positioning maps:
1. Helps spot gaps in the market
2. Useful for analysing competitors
3. Encourages use of market research
43
What are three disadvantages of positioning maps:
1. Just because there is a gap doesn't mean that there is demand
2. Not a guarantee of success
3. How reliable to the market research
44
Give three ways of ways to product differentiate:
1. Research and development
2. Branding
3. Design
45
What is product differentiation:
It's a marketing strategy where businesses attempt to make their product unique to stand out from competitors
46
Describe market position, and why it's best to have a superior value position:
Customers choose products based on their perception of a products value, therefore having a superior value compared to competitors is likely to produce a competitive advantage, but only if sustainable.
47
Describe the transformation process:
Any activity that takes one or more inputs, transforms and adds value to them and provides outputs for customers
48
What is quantitive research?
Preset questions which are asked on a large enough sample of people to provide statistically valid data
49
Give two limitations of small market size when collecting data:
1. Lack of accuracy
| 2. Whether it's valid?
50
What is a limitation of a small sample size?
When there is a small number of people asked, (e.g. 10) the results can majorly differ from another ten, with 1000 people, a high level of confidence is likely that statistically it's about right
51
What is a sample bias limitation:
Even with large sample size, it's possible for it to be inaccurate.
52
What are the four key factors to consider in dynamic markets?
1. Online retailing
2. How markets change
3. Innovation and market growth
4. Adapting to change
53
What is the definition of a brand?
Unique design, sign, symbol, words, or a combination of these, employed in creating an image that identifies a product and differentiates it from its competitor
54
Give the market share definition:
the portion of a market controlled by a particular company or product.
55
What is the definition of market size:
The number of individuals in a certain market who are potential buyers and/or sellers of a product or service.
56
What is the difference between risk and uncertainty?
Risk can be quantified whereas uncertainty cannot.
57
Economies of scale definition:
Factors that cause costs per unit to fall when a firm operates sat a higher level of production
58
Franchise definition:
A business that sells the rights to the use of its name and trading methods to local businesses
59
Generic brands definition:
Brands that are so well know that customers say the brand when they mean the product. For example, I'll Hoover the floor
60
Product differentiation definition:
The extent to which consumers perceive your brand as being different from others.
61
What are 4 steps to successfully segment a market:
1. Research into the different types of customer within a marketplace
2. See if they have common tastes/ habits
3. Identify the segment you wish to focus on, then conduct some qualitative research into customer motivations
4. Devise a product designed not for the whole market, but a particular segment
62
Sample size definition:
The number of people interviewed, this should be large enough to give confidence that the findings are representative of the whole population.
63
Bias definition:
A factor that causes research findings to be unrepresentative of the whole population
64
Price elasticity definition:
A measurement of the extent to which a products demand changes when it's price is changed
65
What four uses of IT help support market research?
1. Websites - some automatically generate customer questionnaires
2. Social media - used to gain understanding of what customers like about a brand
3. Databases - e.g. With loyalty card
4. Online surveys
66
What is the calculation for market share?
1 businesses sales/ total market size (sales)
X100
67
What is the definition of obsolescence?
The process of becoming outdated and no longer used
68
How does competition affect the market? (4)
1. Its stops the business from becoming careless/ complacent
2. Prevents excessive pricing
3. Drives innovation
4. Battle for market share
69
Why is short term marketing ineffective marketing? (2)
1. The high prices are designed to exploit consumer loyalty or a dominant market position
2. Short-run sales-driven marketing (bonuses linked to number of sales)
70
What is the first mover advantage?
The first one to provide something in comparison to rivals
71
What is the calculation for added value?
Selling price per unit- costs of production
72
What are 4 ways of adding value?
1. Convenience
2. Advertising
3. Celebrity endorsement
4. Process involved
