Meeting Customer Needs

Question 1

What is a market

Answer 1

A place where buyers and sellers meet

Question 2

What is a niche market?

Answer 2

A subset of the main market and addresses a specialist need

Question 3

What are the advantages of a niche market?

Answer 3

Charge premium prices
Easier to follow trends
Less competitive

Question 4

What are the disadvantages to a niche market?

Answer 4

Very risky as demand may not be constant

Higher unit costs so economies of scale

Question 5

What is a mass market?

Answer 5

A market aimed at the general population

Question 6

What are the advantages to a mass market?

Answer 6

Large production so the average unit price is lower

Large amounts of sales means high revenues and high revenues can be pumped into research and development

Question 7

What are the disadvantages to a mass market?

Answer 7

Lots of competition

Mass markets have homogenous products meaning its hard to find a difference compared to other products

Question 8

What is market size?

Answer 8

The total sales of all the producers in the market

Question 9

What is a market share?

Answer 9

The proportion of a market that is taken by a business

Question 10

What is a dynamic market?

Answer 10

A market that is constantly changing

Question 11

Advantages to online retailing?

Answer 11

Open 24/7 so they can get an optimal amount of sales

Orders can be taken automatically so no need for staff

Shop can reach international markets easily

Low overheads, no need for a shop premises

Stock can be easily withdrawn or updated to keep up with dynamic market changes in tastes

Easy to set up

Flexible

Opportunities for fast growth

Question 12

Disadvantages of retailing

Answer 12

Very competitive market

Problems with fraud / spam / viruses

Issues with sending goods back may put customers off

Question 13

What is business risk?

Answer 13

The possibility a business will have lower than anticipated profits or experience a loss rather than taking a profit

Question 14

What influences business risk?

Answer 14

Raw material cost, competition, the overall economic climate and government laws

Question 15

What is uncertainty?

Answer 15

When businesses are unable to predict external shocks or future events

Question 16

How can a business protect itself from uncertainty?

Answer 16

To control fluctuating interest rates they may take out a long term fixed rate of interest-makes it easier to budget

Question 17

What is product orientation?

Answer 17

When a business only looks at the product or the production process when deciding what to make next

Question 18

What is a market orientated business?

Answer 18

A market orientated business will focus on the needs of the consumer

Question 19

What is primary market research?

Answer 19

Collecting data yourself

Question 20

What are the main primary research methods?

Answer 20

Surveys, observation, focus groups

Question 21

What is secondary research?

Answer 21

Gathering data which already exists

Question 22

What is qualitative research?

Answer 22

Seeks to gather and explore feelings and thoughts about a product from consumers

Question 23

What is quantitive research?

Answer 23

asks questions to a large sample – to provide valid useful data for the business

Question 24

What are the limitations of market research?

Answer 24

Sampling, size and bias

Question 25

What is sampling?

Answer 25

The process of choosing the right people to be part of the research

Question 26

What is sample size?

Answer 26

the number of people who are interviewed during the research-needs to be large enough that the data has statistical validity.

Question 27

What is bias?

Answer 27

when research findings cannot be trusted because of the way the research has been carried out

Question 28

What is market segments?

Answer 28

an identifiable group of individuals or part of a market where consumers share one or more characteristics or needs

Question 29

What is market mapping?

Answer 29

The process of finding the variables which differentiate brands in a market and then plotting them on a map to indenting a gap in the market.

Question 30

What is a competitive advantage?

Answer 30

An advantage a business has over its competitors allowing it to create more revenue than the average revenue for the industry

Question 31

How can a business have a competitive advantage through price?

Answer 31

some businesses choose to use a very low cost model and compete on price

Question 32

How can a business have a competitive advantage through added value?

Answer 32

Creating multiple different products from one item

Question 33

How can a business have a competitive advantage through innovation?

Answer 33

Coming up with an idea to improve the current best product in a industry

Question 34

How can a business have a competitive advantage through reliability?

Answer 34

Customers want to have an item they can rely on and will last

Question 35

How can a business have a competitive advantage through quality?

Answer 35

Customers want the best quality items possible

Question 36

How can a business have a competitive advantage through reputation?

Answer 36

Creates a trust and bias from customers for you

Question 37

How can a business have a competitive advantage through advertising?

Answer 37

A business can advertise to raise awareness of the brand, remind customers or inform them of product features

Question 38

How can a business have a competitive advantage through branding?

Answer 38

Creates exclusive appeal

Question 39

What is product differentiation?

Answer 39

Where the product is different from the competition in some way

Question 40

What is added value?

Answer 40

the difference between the price that is charged to the customer and the cost of inputs required to create the product or service