Section 3: Marketing Flashcards
Marketing
Identifying customer wants and satisfying them profitably.
Customer
A person, business or other organisation that buys goods or services from a business.
Customer loyalty
When existing customers continually buy products from the same business.
Customer relationships
Communicating with customers to encourage them to become loyal to the business and its products.
Market share
The percentage of total market sales held by one brand or business.
Consumer
Some who buys goods or services for personal use - not to re-sell.
Mass market
Where there is a very large number of sales of a product.
Niche market
A small, usually specialised segment of a much larger market.
Market segment
An identifiable sub-group of a whole market in which consumers have similar characteristics or preferences.
Pros and cons of niche marketing
-Suitable for small businesses
- Able to meet the needs of small groups of people.
-BUT sales may be low
- No economies of scale
What does the marketing department do?
-Market research
- Sales
- Promotion, public relations
- Distribution
Role of marketing department
-Identify and satisfy customer needs
-Establish close customer relationships to build customer loyalty
- Gain information about customers
-Anticipate changes in customer demand
Examples of market changes
-New fashions
- New technology products
- Changes in people’s income
- Ageing population
How do businesses respond to market changes
-Maintain good customer relationships
- Adapt existing products
- New products
- Keep costs low to stay competitive
Pros and cons of mass marketing
- Potential high sales
-Economies of scale
-Growth opportunities
-Same product/promotion to all customers
-BUT no segmentation
Types of market segmentation
-Age
-Lifestyle
-Gender
-Geographical
Pros of market segmentation
-Meets special needs of groups of consumers
-More likely to have customer loyalty
-Effective marketing, directed at each group
Cons of market segmentation
-Detailed market research needed
- Expensive to adapt products
- Segment may be too small to be profitable
Market research
The process of gathering, analysing and interpreting information about a market.
Product-orientated business
A business whose main focus of activity is the product itself.
Market-orientated business
A business that carries out market research to find out consumer wants before a product is developed and produced.
Marketing budget
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.
Primary research
The collection and collation of original data via direct contact with potential or existing customers.
Secondary research
Information that has already been collected and is available for use by others.
