Meeting Customer Needs Flashcards
What do businesses do to make money?
Sell their goods and services in markets
How were markets historically defined?
Places where buyers and sellers would meet to exchange goods
What are some modern methods of trading goods and services?
Telephone, newspapers, mail order, Internet
What are consumer goods markets?
Markets where products such as food, cosmetics, and magazines are sold
What types of services are included in markets for services?
- Hairdressing
- Auditing
What is the housing market?
A market where people buy, sell, and let property
What are commodity markets?
Markets where raw materials such as oil, copper, wheat, and coffee are traded
What do financial markets trade?
Currencies and financial products
What does marketing involve?
- Identifying the needs and wants of consumers
- Designing products that meet these needs
- Understanding the threat posed by competitors
- Telling customers about products
- Charging the right price
- Persuading customers to buy products
- Making products available in convenient locations
True or False: Marketing is solely about selling products.
False
Fill in the blank: Marketing involves _______ the needs and wants of consumers.
identifying
Fill in the blank: The housing market is where people _______ property.
buy, sell and let
What is a mass market?
A mass market is when a business sells the same products to all consumers and markets them in the same way.
Give examples of products sold in a mass market.
- Fast-moving consumer goods
- Crisps
- Breakfast cereals
- Computer software
- Soft drinks
What is the potential customer base size in mass markets?
Possibly billions if products are sold globally.
What is economies of scale?
Producing large quantities at a lower unit cost.
What are the potential benefits of operating in a mass market?
- Higher sales
- Higher profits
What challenge do businesses face in mass markets?
High competition may lead to increased marketing spending.
What was Coca-Cola®’s advertising budget in 2016?
Around US$4000 million.
Define a niche market.
A niche market is a small market segment that has sometimes gone ‘untouched’ by larger businesses.
How does niche marketing differ from mass marketing?
Niche marketing involves selling to a small customer group with specific needs.
What advantages do small firms have in niche markets?
- They can survive by supplying niche markets
- They may avoid competition
- Easier to focus on customer needs
What is an example of a business that targets niche markets?
Zumiez, which sells products related to surfing, skateboarding, and snowboarding.
What is a potential risk for businesses in niche markets?
If a large business enters the niche market, they may easily overrun smaller rivals.
Why might businesses relying on a single niche market be vulnerable?
They are not spreading their risk and may collapse if they lose grip in their chosen market.
How can the size of a market be estimated or calculated?
By the total sales of all businesses in the market.
What is market size usually estimated in?
Value and Volume.
What does ‘Value’ refer to in market size estimation?
The total amount spent by customers buying products.
What was the estimated value of the global fast food market in 2014?
Approximately US$495,000 million.
What was the expected value of the global fast food market by 2020?
Approximately US$645,000 million.
What does ‘Volume’ refer to in market size estimation?
The physical quantity of products that are produced and sold.
How is the market size for domestic air travel in China measured?
By the number of passengers carried per year.
What was the number of passengers carried for domestic air travel in China in 2016?
487,960 million.
How are estimates of volume often based in service markets?
On the number or percentage of users, subscribers, or viewers.
Give examples of service markets where volume is estimated based on users.
- Number of mobile phone users
- Number of television viewers
- Percentage of households with digital television.
True or False: Different markets are likely to differ in size.
True.
Which market is likely to be smaller in size: the sale of savoury snacks or the sales of footwear in a year?
The sale of savoury snacks.
What is market share?
The proportion of a particular market held by a business, product, or brand expressed as a percentage.
How is market share calculated?
Sales of a business / Total sales in the market × 100%
Why is measuring market share important?
It indicates market leadership, influences company strategies, and reflects business success or failure.
A business with a small market share may set a target of increasing its share by _______.
5 per cent
True or False: Market share can indicate whether a business is a market leader.
True
What might influence other companies in the market based on market share?
The presence of a market leader.
What might a business with a small market share do in response to its position?
Set targets to increase its market share.
What does a high market share indicate about a business’s strategy?
It may indicate success in maintaining or growing its market position.
What is the primary purpose of giving products a brand name?
To distinguish them from other products in the market
Why is branding particularly important in mass markets?
Because many products are competing for a share of the market
Name three examples of common brand names.
- Google®
- BBC
- Toyota
- Nike®
- Apple®
What are two goals of branding?
- Differentiate the product from those of rivals
- Create customer loyalty
Fill in the blank: Branding helps with _______ recognition.
product
What can strong branding enable a company to do?
Charge a premium price
What is one way branding can influence customer perception?
Develop an image
True or False: Branding is only relevant to luxury products.
False
What might branding help to establish between a company and its customers?
Customer loyalty
List two functions of branding.
- Help product recognition
- Charge a premium price
