Theme 1 Meeting Customer Needs Flashcards
What’s a Market?
Buyers/sellers trade a particular type of product in a particular place, businesses that sell/buy to each other.
What’s a Mass market?
Aimed at a large group, wide appeal and useful to most of the population like Colgate toothpaste.
What’s a Niche market?
Aimed at a specific group of buyers, specialised to meet requirements for buyers like Sensodyne toothpaste.
What’s Market size?
Royal value of sales in a market over a certain time period (year) or total number of consumers in a market.
What’s Market share?
Proportion of a total market the business holds, dividing sales in a time period by total sales in total market.
What are Dynamic markets?
Change and evolve rapidly consumer preferences in fashion or advances in technology.Also, shopping online more.
Has Online retailing changed how markets operate?
Growth of online retailing has a negative impact on shop-front retailers on high street, closed down.
Benefits of online retailing
Business costs are lower, don’t need a physical shop or hire many staff. Consumers compare prices between firms.
Drawbacks of online retailing
Making sure personal details are protected by cyber criminals, not processing fraudulent activity, expensive.
Direct competition
Two or more businesses sell similar products that appeal to same group of customers.Tesco,Asda Sainsbury’s sell similar food and household products.
Indirect competition
Two or more businesses sell different products, competing for same customers, Indian takeaway against a Chinese takeaway.
Marketing mix
Product-market has similar products so need better quality to stand out.
promotion- get products noticed,branding, celebrity endorsement .
Marketing mix
pricing-competitive pricing, price based on competitors. Penetration pricing, set low prices
Place-easy for customers to access, may sell online
Competition affects nature of ownership
New and smaller firms struggle to survive, need investors to help raise more funds.
Franchise
Agreement that allows a business to use another businesses idea, for fee.
Risk
Probabilities of different outcomes, need to consider negative outcomes.
Uncertainties
Unexpected events, don’t know what could happen, external things the business can’t control, bad weather.
Market research
Before launching a new product, help prevent terrible errors, reduce risk in decisions.
Product orientation
Focuses on design, quality or performance. Use technology to develop new products and functions.
Market orientation
Selling products that’ll match customer preferences. Tailored to customers, expensive.
Primary market research
Gathers new data (someone on their behalf)
Secondary market research
Data that’s already available
Social networking
Internet-based to connect with customers that have a certain interest.
Segmentation
Dividing a market into groups based off characteristics, buyers age, income, hobbies
Demographic segments
Age,gender,socio-economic class
Geographic segments
Neighbourhood, city, county, country or region. Range of lifestyles
Income segments
Chanel make-up aimed at high income, Superdrug low income.
Behavioural segments
High protein aimed at sporty/gym people.
Market map
High price
Low quality High quality
Low price
Market map information
Reveals gaps in market, demand for a product, competitors and declining product
Competitive advantage
Allows firms to generate more sales/ more portable than rivals, be unique.
Competitive advantage sales and profit. (1)
Lower costs, similar product as rivals at a lower price for more sales.
Product innovation, first in the market, new/unique product.
Advertising/marketing, more advertisements more consumers attracted.
Competitive advantage sales and profit. (2)
Reliability and quality- consumers more willing to pay more for better quality, helps enable high prices and reputation.
Good customer service- polite,knowledgable staff make repeat purchases.
Convenience- next day delivery attract consumers
Competitive advantage adding value and formula
Increasing difference between cost of making product and price customer pays.
Added value=price product is sold- cost of making product.
