Theme 1 Flashcards
What is a market?
Any place where customers and suppliers meet to trade products
What is a mass market?
The general market aimed at the general population
What is a niche market?
A subset of the market aimed at more specialist needs
Define homogeneous
The same kind/ alike
How can market size be calculated
Volume of sales or Value
How do you calculate market share
sales of business/total sales in market (x100)
What is a dynamic market?
A market that’s subject to constant change
How can markets change (and the acronym to remember)
Political
Economic
Social
Technological
Legal
Environmental
PESTLE
What is the difference between risk and uncertainty?
Risk- potential outcomes are known. Uncertainty-potential outcomes aren’t known
What is product orientation?
When a business focuses on the product itself and puts maximum effort into it’s quality.
What is market orientation?
When the consumer is priority and their needs are the main focus
What is market segmentation?
The market is split into different groups to correctly target customers
Define Product Orientation
The product is the most important factor when providing products for a market. A product oriented company put in maximum effort on producing quality products and fixing them at the right price
Define Market Orientation
The consumer is the most important factor when providing products for the market, the business has a sensitivity to customers requirements and researches what customers want and need
Advantages of product orientation
*Economies of scale, efficiency, low cost to customers
*Focus on quality, innovation, skills development/outsourcing.
Disadvantages of product orientation
*Disregards customer needs, set-up costs are usually high.
*Potential missed market opportunities, obsolescence.
Advantages of market orientation
*Attracts customers
*Builds customer loyalty
Disadvantages of market orientation
*Perils of following trends
*Higher research costs
Benefits of market research?
*For decision making, reduces risk and cost of making poor decisions
*To develop a marketing plan based on data gathered about the 4Ps
*To react to and prepare for changes in the market
What is market mapping?
The process of finding the variables which differentiate brands in a market and then plotting them on a map – to identify a gap in the market
What are the uses of market mapping?
*It could be used to identify a gap in the market
*It could also be used by a start-up to identify which products to produce or which services to provide – so they can be market orientated (not product orientated)
*It could also be used by a traditional brand to reposition itself in the market
Who thought of the idea of competitive advantage
Michael Porter- 1960s
What are the 9 mains ways a business can gain a competitive advantage?
*Price leadership
*Added value
*Innovation
*Reliability
*Quality
*Advertising
*Branding
*Convenience
*Customer service
What is product differentiation?
Where a product is different from the competition in some way
