Section 3: Marketing

Question 1

Marketing

Answer 1

Identifying customer wants and satisfying them profitably.

Question 2

Customer

Answer 2

A person, business or other organisation that buys goods or services from a business.

Question 3

Customer loyalty

Answer 3

When existing customers continually buy products from the same business.

Question 4

Customer relationships

Answer 4

Communicating with customers to encourage them to become loyal to the business and its products.

Question 5

Market share

Answer 5

The percentage of total market sales held by one brand or business.

Question 6

Consumer

Answer 6

Some who buys goods or services for personal use - not to re-sell.

Question 7

Mass market

Answer 7

Where there is a very large number of sales of a product.

Question 8

Niche market

Answer 8

A small, usually specialised segment of a much larger market.

Question 9

Market segment

Answer 9

An identifiable sub-group of a whole market in which consumers have similar characteristics or preferences.

Question 10

Pros and cons of niche marketing

Answer 10

-Suitable for small businesses
- Able to meet the needs of small groups of people.
-BUT sales may be low
- No economies of scale

Question 11

What does the marketing department do?

Answer 11

-Market research
- Sales
- Promotion, public relations
- Distribution

Question 12

Role of marketing department

Answer 12

-Identify and satisfy customer needs
-Establish close customer relationships to build customer loyalty
- Gain information about customers
-Anticipate changes in customer demand

Question 13

Examples of market changes

Answer 13

-New fashions
- New technology products
- Changes in people’s income
- Ageing population

Question 14

How do businesses respond to market changes

Answer 14

-Maintain good customer relationships
- Adapt existing products
- New products
- Keep costs low to stay competitive

Question 15

Pros and cons of mass marketing

Answer 15

• Potential high sales
  -Economies of scale
  -Growth opportunities
  -Same product/promotion to all customers
  -BUT no segmentation

Question 16

Types of market segmentation

Answer 16

-Age
-Lifestyle
-Gender
-Geographical

Question 17

Pros of market segmentation

Answer 17

-Meets special needs of groups of consumers
-More likely to have customer loyalty
-Effective marketing, directed at each group

Question 18

Cons of market segmentation

Answer 18

-Detailed market research needed
- Expensive to adapt products
- Segment may be too small to be profitable

Question 19

Market research

Answer 19

The process of gathering, analysing and interpreting information about a market.

Question 20

Product-orientated business

Answer 20

A business whose main focus of activity is the product itself.

Question 21

Market-orientated business

Answer 21

A business that carries out market research to find out consumer wants before a product is developed and produced.

Question 22

Marketing budget

Answer 22

A financial plan for the marketing of a product or product range for some specified period of time. Specifies how much money is available to market the product or range, so that the marketing department knows how much it may be spent.

Question 23

Primary research

Answer 23

The collection and collation of original data via direct contact with potential or existing customers.

Question 24

Secondary research

Answer 24

Information that has already been collected and is available for use by others.