meeting customer needs

Question 1

what is niche marketing?

Answer 1

where a business targets a smaller segment of a larger market where customers have specific needs and wants

Question 2

what is mass marketing?

Answer 2

where a business sells into the largest part of the market where there are many similar products offered by competitors

Question 3

4 key features of mass market

Answer 3

1- customers form majority of market
2-customers needs and wants are less specific
3-higher production output and potential for economies of scale
4- associated with low-cost operation or market leading brands

Question 4

4 aims of mass marketing

Answer 4

1- create products with universal appeal
2- aim for leadership of the largest market segment
3-build a strong brand that’s associated with product
4-exploit economies of scale to earn high profits

Question 5

benefits of successful mass marketing?

Answer 5

1-widest potential customer base
2-lower risk as it has a large market
3-low unit costs from economies of scale
4-market research costs relatively low

Question 6

6 advantages of niche marketing

Answer 6

-less competition
-clear focus
-builds up specialist skill
-charge higher prices
-profit margins often higher
-loyal customers

Question 7

4 disadvantages of niche marketing

Answer 7

-lack of economies of scale
-risk of over dependence on a single product or market
-likely to attract competition if successful
-vulnerable to market changes

Question 8

what’s market growth?

Answer 8

a key indicator for existing and potential market entrants

Question 9

what’s market share ?

Answer 9

explains how overall market is split between existing competitors
-good indicator of competitive advantage

Question 10

what’s a dynamic market?

Answer 10

-a changing market
-the pace and nature of change varies considerably between markets

Question 11

what are the key sources of change in markets?

Answer 11

-customer tastes and preferences
-impact of technology
-impact of new market entrants

Question 12

what’s the role of innovation?

Answer 12

-puts a new idea / approach into action
-commonly describes as ‘the commercially successful exploitation of ideas’

Question 13

definition of invention

Answer 13

-formulation of new ideas for products or processes

Question 14

definition of innovation

Answer 14

practical application of new inventions into marketable products or services

Question 15

what are the two types of innovation

Answer 15

-product innovation
-process innovation

Question 16

what is product innovation?

Answer 16

launching new or improved products onto the market

Question 17

what’s process innovation?

Answer 17

finding better or more efficient ways to produce existing products or deliver existing services

Question 18

what are the benefits of process innovation ?

Answer 18

-reduced costs
-improved quality
-more responsive customer service
-greater flexibility
-higher profits

Question 19

benefits of product innovation

Answer 19

First move advantage which includes:
-higher prices and profit
-added value
-builds early customer loyalty
-enhanced reputation as an innovative company
-public relations
-increased market share

Question 20

how does competition affect the market?

Answer 20

-battle for market share-battle to gain or protect share and threat to new market entrants
-pricing-price wars which adds competition and stronger competitors often set market price
-battle for competitive advantage-product differentiation-key parts of competition

Question 21

what’s competitive advantage?

Answer 21

-the ability of a business to add more value for its customers than it’s rivals and attain a position of relative advantage
-there’s a better advantage if companies offer better value, quality or service

Question 22

what’s risk?

Answer 22

-possibility that things will go wrong

Question 23

what’s uncertainty ?

Answer 23

the unpredictable and uncontrollable events that affect a business

Question 24

why conduct market research ?

Answer 24

-to find out about the market

Question 25

what’s product orientated?

Answer 25

-when a company decides not to carry out any market research

Question 26

what’s market orientated?

Answer 26

-a product that’s launched after market research
-far more likely to be successful

Question 27

what is primary research?

Answer 27

-gathering new information specifically for the purposes identified by the business
-obtained by field research such as interviewing
important for new business as there will be little secondary data for company to utilise

Question 28

disadvantage of primary research?

Answer 28

-failure to ask enough people may mean data doesn’t represent views of typical customers
-asking too many people of one group won’t represent the whole market
-poorly designed questionnaires may use suggestive or leading questions which may encourage people to give a particular answer to certain questions

Question 29

what is secondary research?

Answer 29

-research that uses information that has already been gathered for another purpose
-eg sales information

Question 30

disadvantage of secondary research?

Answer 30

-info may be outdated so could be less accurate than up to date info
-info may not be exactly what’s needed as it was originally collected for another purpose
-may not be reliable

Question 31

benefits of market research?

Answer 31

-knowing customer needs - don’t waste money of products that won’t sell
-estimating likely demands- so firms don’t make too many or too few products
-helps entrepreneurs to understand if the market is big enough to make it a success
-finding out about competitors location, products and prices

Question 32

what’s quantitative data?

Answer 32

factual, often numerate data that aims to be statistically representative of the whole market

Question 33

what qualitative data?

Answer 33

contains opinion and is unlikely to have been gathered on a large enough scale to give statistically reliable data

Question 34

what do customers differ in terms of?

Answer 34

-benefits they want
-amount they are able to pay
-media they see
-quantities they buy
-time and place they buy

Question 35

what does market research show us?

Answer 35

-dimension of market
-competitor strategies
-needs, wants and expectations of customers and how these are changing
-market segments

Question 36

why is market orientation crucial to marketing success?

Answer 36

-markets are much more dynamic
-customers are become more demanding
-barriers to market entry are getting lower

Question 37

positives of quantitive research

Answer 37

-data is easy to analyse
-numerical data provides insights into relevant trends
-can be compared with data from other sources

Question 38

negatives of quantitive research

Answer 38

-focuses of data rather than explaining why things happen
-doesn’t explain the reasons behind numerical trends
-may lack reliability if sample size and method isn’t valid

Question 39

positives of qualitative data

Answer 39

-focuses on understanding customer needs and wants
-can highlight issues that need addressing-tests elements of marketing mix

Question 40

negatives of qualitative data

Answer 40

-expensive to collect and analyse
-requires specialist research
-based around opinion
-always a risk the sample is not representative

Question 41

what are focus groups?

Answer 41

-form of qualitative research
-groups of people are asked about their perceptions, opinions, beliefs and attitudes towards a product, service, concept or ide

Question 42

what’s sampling in market research?

Answer 42

-involves the gathering of data from a sample of respondents, the results should be representative of the population as a whole

Question 43

positives of sampling

Answer 43

-small sample size can still provide useful insights
-can reduce risks and costs if used before making marketing decisions
-flexible and relatively quick

Question 44

negatives of sampling

Answer 44

the biggest risk is the sample being unrepresentative of the population which leads to incorrect conclusions
-risk of bias in research question
-less useful in market segments when customers tastes and preferences change frequently

Question 45

how is IT used in market research ?

Answer 45

-source of primary and secondary research
-software can quickly highlight what customers are saying about the product or brand
-surveys are easy to set up and analyse results
-wide range of powerful software applications to manage social media research and integrate with other business systems

Question 46

what are market maps?

Answer 46

-a grid that shows the range of possible positions for two features of a pricy in a market
-may reveal gaps in a market

Question 47

advantages of market maps?

Answer 47

-helps spot gaps in market
-useful for analysing competitors

Question 48

disadvantages of market maps?

Answer 48

-just because there’s a ‘gap’ doesn’t mean there is demand
-how reliable is the market research?
-subjective