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Business Studies Theme 1 - People > Meeting Customer Needs 1.1 > Flashcards

Meeting Customer Needs 1.1 Flashcards

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People You Should Know flashcards
1
Q

What is a niche in the market?

A

A gap in the market

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2
Q

What is a niche market?

A

Targeting a specific segment of a whole market

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3
Q

What is a mass market?

A

A product which appeals to the entire population. It is generic and standardised

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4
Q

What are two characteristics of a niche market:

A
  1. Small range of goods

2. May have characteristics some love and some hate

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5
Q

What are two characteristics of a mass market:

A
  1. Appealing, considered ‘smooth’ as there is nothing to like/ dislike
  2. Long lasting, wide appeal that spans age groups and gender
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6
Q

Give three pros of a mass market:

A
  1. Wide appeal- spreads risk of failure
  2. Increases market share
  3. A business is able to spread resources between stores - there is efficient allocation
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7
Q

Give three cons of mass markets:

A
  1. Lots of competitors which means choice for consumers as there are substitutes
  2. Diseconomies of scale- when bigger can cause problems as there is less control and therefore less motivation for employees
  3. Homogenous - everything is the same
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8
Q

Give two pros of niche markets:

A
  1. Not a high number of competitors which means a larger market share
  2. There is higher profit margins as there is a higher price per product
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9
Q

Give two cons of niche markets:

A
  1. Small market so there is less opportunity to sell so they rely on produce
  2. There is a higher risk of failure
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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
  1. Volume = quantity of sales (units)

2. Value = monetary worth of sales (revenue)

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11
Q

When given volume, how do you work out value?

A

Volume x sppu = value

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12
Q

When given value, how do you work out volume?

A

Value / sppu = volume

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13
Q

What are three methods of secondary research?

A
  1. Internet - google
  2. Trade press
  3. Government produced data
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14
Q

What are two pros of secondary research?

A
  1. Often obtained without cost

2. Good overview of market

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15
Q

What are two cons of secondary research?

A
  1. Data may not be updated regularly

2. It’s not tailored to your own needs

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16
Q

What are two pros of primary research?

A
  1. Can aim questions at your research objectives

2. Latest information to market place

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17
Q

What are two cons of primary research?

A
  1. Expensive

2. Risk of interviewer bias

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18
Q

Give two examples of primary research with a limited budget

A
  1. Retailer research

2. Observation

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19
Q

What is qualitative research?

A

In depth research into the motivations behind the attitudes and buying habits of consumers

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20
Q

What are the two forms qualitative research takes?

A
  1. Group discussions (focus groups)

2. Depth interviews

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21
Q

What are two advantages of group discussion?

A
  1. May reveal problem/ opportunity the company hasn’t anticipated
  2. Reveal consumer psychology
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22
Q

What is a monopoly of the market?

A

1 company dominating the market

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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

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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

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25
Q

Give 4 reasons why businesses need to collect data?

A
  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
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26
Q

Give 5 limitations of market research:

A
  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
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27
Q

What are the three sampling methods, and describe them:

A
  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
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28
Q

What are the 7 steps of primary market research?

A
  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
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29
Q

What are 5 methods of segmenting people?

A
  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
Q

Define market segmentation:

A

An identifiable group where consumers share one or more characteristic or need

31
Q

Give two reasons why it is useful to segment the market:

A
  1. Target a precise audience better

2. Promotion is targeted effectively

32
Q

Give three reasons why markets change:

A
  1. Technological change
  2. Trends and tastes (fashion and seasonal)
  3. Competitors (new entrants)
33
Q

Give an example of a highly effected market in terms of the market changing:

A

Camera market- when smartphones were brought in, consumers didn’t need actual cameras

34
Q

What is a pure play business?

A

A business which solely exists online

35
Q

Which is the different between innovation and invention:

A

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
Q

Give three ways competition affects the market:

A
  1. Stops businesses from become careless/ complacent
  2. Prevents excessive pricing
  3. Drives innovation
37
Q

Give three pros of e-commerce businesses:

A
  1. Reach a wider audience
  2. Orders taken automatically so staff aren’t needed
  3. Easier to market
38
Q

Give three cons of e-commerce businesses:

A
  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
Q

Market positioning definition:

A

An effort to influence consumer perception of a brand or product relative to the perception of competing brands or products

40
Q

Businesses use marketing to create value for customers by making two key decisions, what are they:

A
  1. Choose which customers to serve

2. Choose how to serve those customers

41
Q

Give a way of analysing market positioning:

A

A positioning map

42
Q

What are three advantages of positioning maps:

A
  1. Helps spot gaps in the market
  2. Useful for analysing competitors
  3. Encourages use of market research
43
Q

What are three disadvantages of positioning maps:

A
  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
Q

Give three ways of ways to product differentiate:

A
  1. Research and development
  2. Branding
  3. Design
45
Q

What is product differentiation:

A

It’s a marketing strategy where businesses attempt to make their product unique to stand out from competitors

46
Q

Describe market position, and why it’s best to have a superior value position:

A

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
Q

Describe the transformation process:

A

Any activity that takes one or more inputs, transforms and adds value to them and provides outputs for customers

48
Q

What is quantitive research?

A

Preset questions which are asked on a large enough sample of people to provide statistically valid data

49
Q

Give two limitations of small market size when collecting data:

A
  1. Lack of accuracy

2. Whether it’s valid?

50
Q

What is a limitation of a small sample size?

A

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
Q

What is a sample bias limitation:

A

Even with large sample size, it’s possible for it to be inaccurate.

52
Q

What are the four key factors to consider in dynamic markets?

A
  1. Online retailing
  2. How markets change
  3. Innovation and market growth
  4. Adapting to change
53
Q

What is the definition of a brand?

A

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
Q

Give the market share definition:

A

the portion of a market controlled by a particular company or product.

55
Q

What is the definition of market size:

A

The number of individuals in a certain market who are potential buyers and/or sellers of a product or service.

56
Q

What is the difference between risk and uncertainty?

A

Risk can be quantified whereas uncertainty cannot.

57
Q

Economies of scale definition:

A

Factors that cause costs per unit to fall when a firm operates sat a higher level of production

58
Q

Franchise definition:

A

A business that sells the rights to the use of its name and trading methods to local businesses

59
Q

Generic brands definition:

A

Brands that are so well know that customers say the brand when they mean the product. For example, I’ll Hoover the floor

60
Q

Product differentiation definition:

A

The extent to which consumers perceive your brand as being different from others.

61
Q

What are 4 steps to successfully segment a market:

A
  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
Q

Sample size definition:

A

The number of people interviewed, this should be large enough to give confidence that the findings are representative of the whole population.

63
Q

Bias definition:

A

A factor that causes research findings to be unrepresentative of the whole population

64
Q

Price elasticity definition:

A

A measurement of the extent to which a products demand changes when it’s price is changed

65
Q

What four uses of IT help support market research?

A
  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
Q

What is the calculation for market share?

A

1 businesses sales/ total market size (sales)

X100

67
Q

What is the definition of obsolescence?

A

The process of becoming outdated and no longer used

68
Q

How does competition affect the market? (4)

A
  1. Its stops the business from becoming careless/ complacent
  2. Prevents excessive pricing
  3. Drives innovation
  4. Battle for market share
69
Q

Why is short term marketing ineffective marketing? (2)

A
  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
Q

What is the first mover advantage?

A

The first one to provide something in comparison to rivals

71
Q

What is the calculation for added value?

A

Selling price per unit- costs of production

72
Q

What are 4 ways of adding value?

A
  1. Convenience
  2. Advertising
  3. Celebrity endorsement
  4. Process involved

Business Studies Theme 1 - People (6 decks)

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