Meeting Customer Needs

Question 1

Mass market

Answer 1

where a business targets the whole market with products/services with widespread appeal

Question 2

Niche marketing

Answer 2

targeting a small segment of the market with specific characteristics

Question 3

Mass market

Answer 3

an unsegmented market in which products with mass appeal are aimed at every customer.

Question 4

mass marketing

Answer 4

where a business targets the whole market, with products/services with wide-spread appeal.

Question 5

brand

Answer 5

A product/service/business that can be distinguished from competitors and is easily recognisable by customers e.g. via the name, logo, personality etc.

Question 6

Economies of scale

Answer 6

falling unit (or average) costs experienced by a business as it increases in size.

Question 7

Purchasing economies

Answer 7

falling unit costs that a growing business can achieve when it buys raw materials or other inputs in larger quantities, allowing bulk-buying discounts.

Question 8

Marketing economies

Answer 8

falling unit costs that a growing business can achieve as output increases, e.g. by spreading the cost of promotion campaigns over a larger output.

Question 9

Technical economies

Answer 9

falling unit costs that a growing business can achieve by investing in more efficient machinery and equipment and spreading this cost over a larger output.

Question 10

Managerial economies

Answer 10

falling unit costs that a growing business can achieve by employing specialist, more efficient managers, and spreading the cost over a larger output.

Question 11

Market size

Answer 11

Total sales of all businesses in a market

Question 12

equation for value:

Answer 12

selling price x number of units sold

Question 13

equation for market share:

Answer 13

sales of a business/ total market sales x 100

Question 14

market share

Answer 14

a business’ sales as a % of total market sales

Question 15

market growth

Answer 15

change in the size of the market over time

Question 16

equation for market growth:

Answer 16

change / original x 100

Question 17

Dynamic market

Answer 17

A market that is subject to rapid/continuous change.

Question 18

Innovation

Answer 18

Putting new ideas/designs into action.

Question 19

product innovation

Answer 19

The creation and development of new or improved products or services

Question 20

process innovation

Answer 20

The implementation of new methods, techniques, or practices that improve the efficiency, effectiveness, and productivity of business operations.

Question 21

Online retailing

Answer 21

selling via the internet, e.g. via a website or app (e-commerce or m-commerce).

Question 22

Competition

Answer 22

rivalry among sellers, where sellers try to increase sales, profit and/or market share.

Question 23

Direct competition

Answer 23

between rivals that sell similar goods, e.g. Papa Johns & Domino’s

Question 24

Indirect competition

Answer 24

between firms that sell substitute goods, e.g. KFC & Domino’s

Question 25

Competitiveness

Answer 25

the ability of a business to outperform rivals and achieve sustainable competitive advantage

Question 26

competitive advantage

Answer 26

features of a business and/or its products that enables it to generate more sales or to be more profitable than its rivals.

Question 27

Risk

Answer 27

when the probabilities of different outcomes are known or can be estimated.

Question 28

Uncertainty

Answer 28

when the probabilities of different outcomes are not known or cannot be reliably estimated

Question 29

Market orientation

Answer 29

where businesses design and develop products based on understanding and meeting customer needs and preferences.

Question 30

Product orientation

Answer 30

designing and developing products based on the business’s capabilities and expertise rather than specific customer needs or market demands.

Question 31

Primary market research

Answer 31

collecting data first-hand for a specific purpose (sometimes called field research).

Question 32

Secondary market research

Answer 32

using data that already exists and was collected for a different purpose (sometimes called desk research).

Question 33

Sampling

Answer 33

gathering of data from a subset of respondents, the results of which should be representative of the population (e.g. target market) as a whole.

Question 34

Quantitative research

Answer 34

produces numerical statistics. It usually involves asking closed questions, e.g. via a survey.

Question 35

Qualitative research

Answer 35

involves collecting opinions. It usually involves asking open questions, e.g. in a focus group.

Question 36

Market segmentation

Answer 36

the division of a market into customer groups, each of which has similar characteristics, preferences or behaviours. Common groupings include age, gender, income, hobbies/interests, location, ethnic origin/culture, occupation and lifestyle.

Question 37

Price discrimination

Answer 37

charging different prices to different market segments based on their willingness to pay.

Question 38

Market positioning

Answer 38

efforts to influence customer perception of a brand or product relative to the perception of competing brands or products.

Question 39

Market mapping

Answer 39

the process of analysing competition in a market using two key variables that consumers consider when deciding which product to buy, (e.g price and quality) and plotting it on a diagram.

Question 40

Adding value

Answer 40

Activities that allow a business to raise the price beyond the total cost of the inputs required to create the product/service. It might be achieved through improving the product/service itself or improving the way consumers perceive the product/service.

Question 41

Added value

Answer 41

Price - unit cost

Question 42

USP

Answer 42

a factor that differentiates a product from its competitors.

Question 43

Product differentiation

Answer 43

where a business distinguishes its products/services from rivals. E.g. via a USP or really effective branding.

Question 44

Competitive advantage

Answer 44

features of a business and/or its products that enables it to generate more sales or to be more profitable than its rivals.

Question 45

Corporate strategy

Answer 45

the medium to long-term plan that a business has chosen to follow in order to achieve its corporate objectives.

Question 46

Differentiation strategy

Answer 46

­where a business sets out to provide unique benefits that customers value. E.g. via superior product features/performance customer service, reliability, branding, innovation etc.

Question 47

Cost leadership strategy

Answer 47

­where a business sets out to be the lowest cost producer, for a given level of quality. These businesses focus on improving operational efficiency (e.g. efficient design and production methods, workforce, low overheads, greater economies of scale).