Meeting customer needs

Question 1

What is a mass market?

Answer 1

A very large market in which products with mass appeal are targeted

Question 2

What is a niche market?

Answer 2

A smaller market, usually within a large market or industry

Question 3

What are characteristics of mass markets?

Answer 3

• Same products to all consumers
• Markets all the products the same
• Huge numbers of customers
• Large quantities at lower unit costs (Economies of scale)
• Lots of competition

Question 4

What are characteristics of niche markets?

Answer 4

• small customer group
• specific needs
• avoids competition
• premium prices

Question 5

How can the size of a market be estimated?

Answer 5

By value or volume

Question 6

How do you calculate market share?

Answer 6

sales of a business
————————————- x100%
total sales in the market

Question 7

Why might branding be used?

Answer 7

• To differentiate products from rivals
• Create customer loyalty
• help product recognition
• develop an image
• charge a premium price when brand strengthens

Question 8

Why might a business want to use online retailing services?

Answer 8

• Reaches consumers who prefer to shop from home
• Easier to gather personal information from customers so they can be targeted with other products and offers
• Selling costs reduced.
• Cheaper marketing costs
• open 24/7
• Greater flexibility with growth

Question 9

How might a business adapt to change?

Answer 9

• Culture of change
• Market research
• Invest in product development
• Develop a niche (if there’s a group of loyal customers)

Question 10

How does competition affect:

• Businesses
• Consumers

Answer 10

businesses:
- puts there under pressure to lower prices, make products appear different, offer better quality, attractive adverts, high-quality customer services
Consumers:
- lots of choice, low prices

Question 11

What is risk and what is uncertainty?

Answer 11

Risk is when owners take actions where the outcomes are unknown, they commit resources that could be lost.

Uncertainty is when businesses operating in markets are subject to external influences. It is completely beyond the businesses control.

Question 12

What does it mean when a business is product orientated?

Answer 12

The business focuses on the production process and the product itself. It puts most of its efforts into developing and making products which it believes consumers want and which will sell well.

Question 13

What does it means when a business is market orientated?

Answer 13

The business continually identifies, reviews and analyses consumers needs. It’s led by the market. It’s most likely going to engage in effective marketing. Consumers are central to a firms decision making.

Question 14

What are the advantages of being market orientated?

Answer 14

• responds more quickly to changes in the market
• stronger position to meet the challenge of new competition
• more able to anticipate market changes
• more confident that the launch of a new product will be successful

Question 15

What is market research?

Answer 15

To gather, present and analyse information about the marketing and consumption of goods and services.

Question 16

What is primary market research?

Answer 16

Information which did not exist before is collected by researchers.

Question 17

What are some methods of primary research?

Answer 17

• Questionnaires
• Personal interviews
• Focus groups or consumer panels
• Test marketing

Question 18

What is secondary market research?

Answer 18

The collection of information which already exists in some form.

Question 19

What are the types of secondary market research?

Answer 19

Internal and external data.

Question 20

What is quantitative research?

Answer 20

The collection of data that can be measured eg: surveys

Question 21

What is qualitative research?

Answer 21

The collection of data about attitudes, beliefs and intentions.

Question 22

What are the limitations of primary market research?

Answer 22

• Human behaviour ; comments may not truthful / may not constant in future
• Sampling and bias ; variance opinion

Question 23

How can ICT be used to support market research?

Answer 23

• Social networking

- Databases

Question 24

What is market segmentation?

Answer 24

When markets can be divided into different sections. Each segment is made up of consumers that have similar needs.

Question 25

What are the types of market segmentations?

Answer 25

• Geographic (depending on where they live)
• Demographic (age/gender/income/social class/ethnicity/religion)
• psychographic (lifestyles and opinions)
• Behavioural (usage rates, loyalty)

Question 26

What are the benefits of market segmentation?

Answer 26

• Increased revenue from producing different products for different market segments
• increased customer loyalty
• business avoids wasting promotional resources
• market a wider range of goods to different customer goods.

Question 27

What is market positioning?

Answer 27

the view consumers have about the quality, value for money and image of a product in relation to those of competitors

Question 28

How might a business position its products?

Answer 28

• The benefits offered by the product
• The unique selling point (key aspect)
• attributes of the product
• origin of the product
• classification of the product

Question 29

What is market mapping?

Answer 29

Shows the positioning of a brand as influenced by customer perceptions rather than by those of the businesses.

Question 30

What are the limitations of market mapping?

Answer 30

• Two dimensional (only two product attributes analysed)

- Information needed can be expensive (primary research)

Question 31

How might a business gain a competitive advantage?

Answer 31

• Superior product design
• Promotion (creative adverts)
• Customer service
• Ethical stance