Unit 1- Meeting Customer Needs Flashcards
This covers Unit 1 content
What does meeting customer needs mean in business?
Ensuring that products or services satisfy customer demands in terms of quality, price convenience and preferences.
What are the main ways businesses identify customer needs?
Market research, customer feedback, analyzing buying patterns, and competitor analysis.
What is market orientation?
A business approach that prioritizes customer preferences when making decisions.
What is product orientation?
A business approach that focuses on product quality and innovation rather than customer preferences.
What are the benefits of market orientation?
Higher customer satisfaction, increased sales, stronger brand loyalty, and better market adaptability.
What are the risks of being product-oriented?
Potential mismatch with customer needs, difficulty competing with customer-focused businesses, and slower adaptation to market trends.
How do businesses segment their market to meet their customer needs?
By demographic, geographic, psychographic and behavioral factors.
What is the difference between mass and niche markets?
Mass market: Large unsegmented and generalized market
Niche Market: Specialized, tailored products for specific customer groups.
How does competition affect customer needs?
Encourages businesses to improve quality, lower prices, and innovate to retain customers.
What role does product differentiation play in meeting customer needs?
Helps a business stand out from competitors by offering unique features, branding, or superior quality.
How does customer service contribute to meeting customer needs?
Enhances customer experience, builds loyalty and increases repeat purchases.
What is the impact of technological change on meeting customer needs?
Enables faster production, personalization, improved convenience and better communication through digital platforms.
Why is flexibility important in meeting customer needs?
Businesses must adapt to changing trends, consumer preferences and external factors like economic conditions
What is the significance of adding value in meeting customer needs?
Enhances customer satisfaction and allows businesses to charge premium prices by improving product features, branding or convenience.
What is the relationship between meeting customer needs and brand loyalty?
Satisfied customers are more likely to remain loyal, make repeat purchases and recommend the business to others.
What is a market?
A place where buyers and sellers interact to exchange goods and services.
What are the different types of markets?
Mass market
Niche market
Consumer market
Business-to-business market
What is market size?
The total sales volume or revenue of a product ore service in a given market, measured in units sold or total revenue.
How is market size measured?
It is measured in units sold or total revenue.
What is market share?
The percentage of total market sales controlled by one business.
What is market growth?
The percentage increase in total market sales over time.
How is market growth calculated?
market growth= change in market size/original market size * 100
What factors influence market growth?
Economic conditions, technological advancements, consumer trends, government policies and demographic changes.
What is a competitive market?
A market with many businesses offering similar products, leading to strong price competition and innovation.
What is monopoly power?
When a single business dominates a market and has significant control over price and supply.
How do businesses compete in the market?
By price, quality, branding, customer service and innovation.
What is the difference between direct and indirect competition?
Direct competition: Businesses selling similar products
Indirect competition: Businesses competing for the same customer spending but selling different products.
What is market positioning?
The strategy businesses use to establish their brand in the minds of consumers relative to competitors.
What is a dynamic market?
A market that constantly changes due to trends, innovation, or external factors like economic shifts.
What is market segmentation?
Dividing the market into groups based on demographics, geography, behavior or psychographics
What is the role of branding in the market?
Differentiates products, builds customer loyalty, and allows businesses to charge premium prices.
What is the importance of demand and supply in the market?
Demand determines how much consumers want to buy, while supply determines how much businesses offer, affecting price and availability.
What is Price Elasticity of Demand?
A measure of how much quantity demanded changes in response to a change in price.
How is PED calculated?
percentage change in quantity demanded / percentage change in price
What does it mean when PED>1?
Demand is price elastic.
What does it mean when PED<1?
Demand is price inelastic.
What does it mean if PED=1?
Demand is unitary elastic.
What are the factors influencing PED?
Availability of resources
Luxury vs necessity
Proportion of income spent
Time period
Brand loyalty
What is Income Elasticity of Demand?
A measure of how quantity demanded changes in response to a change in income.
How is YED calculated?
percentage change in quantity demanded / percentage change in income
What does it mean if YED>1?
The good is a luxury good.
What does it mean if 0<YED<1?
The good is a normal good.
What does it mean YED<0?
The good is an inferior good.
What are the business implications of PED?
Elastic demand: Businesses should lower prices to increase revenue.
Inelastic demand: Businesses can raise prices without losing many sales.
What are the business implications of YED?
Businesses selling luxury goods benefit during economic booms.
Businesses selling inferior goods may see increased demand during recessions.
What is the Marketing Mix?
The combination of factors a business uses to influence consumer purchasing decisions, traditionally represented by the 4Ps and extended to the 7Ps in services.
What the 4Ps of the marketing mix?
Product: The good or service being sold
Price: The pricing strategy used to attract customers and maximize revenue.
Place: The distribution channels used to get the product to consumers
Promotion: The methods used to communicate and persuade customers to buy.
What are the additional 3Ps in the extended marketing mix?
People: The employees and customer service that impact the customer experience.
Process: The way in which a service is delivered
Physical evidence: The tangible elements that reassure customers
Why is the marketing mix important?
It helps businesses create value for customers, differentiate from competitors, and increase market share.
What is product differentiation?
This involves creating unique features that a product stand out.
Why is product differentiation important?
Helps avoid price competition, builds brand loyalty and increases perceived value.
What factors influence pricing strategies?
Cost of production
Competitor pricing
Target market and customer perception
Market demand and elasticity
What are the main price strategies?
Cost-plus pricing: Adding a markup to the const of production.
Penetration pricing: Setting a high initial price for new products to maximize early profits.
Competitive pricing: Setting prices based on competitor pricing.
Psychological pricing: Using price points to influence perception.
Dynamic pricing: Adjusting prices based on demand.
What factors affect distribution?
Nature of the product
Target market preferences
Competitor strategies
Cost of distribution
Online vs. offline selling models
What are different promotional strategies?
Advertising
Public relations
Sales promotions
Personal selling
Digital marketing
What is marketing strategy?
A long term plan outlining how a business will achieve its marketing objectives and gain a competitive advantage.
What are the different market positioning strategies?
Cost leadership
Differentiation
Focus/Niche strategy
What are the advantages of niche marketing?
Less competition
Strong brand loyalty
Higher profit margins
Easier to target and personalize marketing
What is mass marketing?
Mass marketing is targeting a broad audience with a single product
How does mass marketing differ from niche marketing?
Mass marketing: Targeting a broad audience with a single product
Niche marketing: Targeting a small, specific market segment.
How does branding impact marketing strategy?
Creates brand recognition and trust
Differentiates from competitors
Allow businesses to charge premium prices
What is product portfolio analysis?
A tool used to assess and manage a business’s range of products
What is the Boston Matrix?
This is a model used to analyze a company’s products based on market share and market growth.
What are the four categories of the Boston Matrix?
Stars: High market growth, high market share
Cash Cows: Low market growth, high market share
Question marks: High market growth, low market share
Dogs: Low market growth, low market share.
What is Ansoff’s Matrix?
A model used to plan business growth.
What are the components of the Ansoff’s Matrix?
Market Penetration: Selling existing products in existing markets
Market development: Expanding existing products into new markets
Product development: Creating new products for existing markets
Diversification: Launching new products in new markets
How does digital marketing affect modern marketing strategies?
Increases reach through social media and search engines.
Enables targeted advertising using data analytics
Provides cost-effective promotional methods
Facilitates direct customer engagement and feedback
What are the benefits of e-commerce for businesses?
Lower operational costs.
Wider customer reach
24/7 availability and convenience.
Easier data collection and analysis.
What is recruitment?
The process of identifying, attracting, and hiring suitable candidates for a job.
What are the key stages of the recruitment process?
Identifying the job vacancy
Writing the job description and person specification
Advertising the job
Shortlisting candidates
Interviewing and selecting candidates
Offering the job and onboarding
What is the difference between internal and external recruitment?
Internal recruitment: Hiring from within the organization
External recruitment: Hiring from outside the organization
What are the advantages of internal recruitment?
Faster and cheaper
Motivates employees with career progression
Candidate is already familiar with company culture
What are the advantages of external recruitment?
Brings in new ideas and skills
Wider talent pool
Can fill skill gaps that internal candidates may lack
What are the main types of employee training?
On-the-job training: Learning while working
Off-the-job training: Learning outside of work
What are the advantages of on the job training?
Cost-effective
Relevant to the job
Immediate practical experience
What are the advantages of off-the-job training?
Employees learn from experts
Develops wider skills
No distractions from daily work tasks
Why is employee training important?
Improves skills and productivity
Increases employee motivation and job satisfaction
Reduces turnover and recruitment costs
What is the difference between leadership and management?
Leadership: Inspiring and guiding people toward a vision.
Management: Planning, organizing, and controlling business activities.
What are the four main leadership styles?
Autocratic: Leader makes all decisions, little input from employees.
Democratic: Leader involves employees in decision-making.
Laissez-faire: Employees make most decisions with little supervision.
Paternalistic: Leader acts as a “parent,” considering employees’ well-being while making decisions.
What are the advantages of an autocratic leadership style?
Quick decision-making
Effective in crisis situations
Clear direction and control
What are the advantages of a democratic leadership style?
Encourages creativity and innovation
Higher employee motivation
Leads to better decision-making through collaboration
Which leadership style is best for an innovative business?
Democratic or laissez-faire, as they encourage creativity and employee input.
What is motivation is a business context?
The factors that drive employees to work efficiently and productively.
What is the difference between financial and non financial motivation?
Financial motivation: Monetary incentives
Non-financial motivation: Psychological and social incentives
What are examples of financial motivation methods?
Salaries and wages
Bonuses and commission
Profit-sharing schemes
Fringe benefits (e.g., company car, health insurance)
What are examples of non-financial motivation methods?
Job enrichment
Job rotation
Job empowerment
Recognition and praise
What is Herzberg’s Two-Factor Theory of Motivation?
Hygiene factors: Elements that prevent dissatisfaction but don’t motivate
Motivators: Factors that actively encourage motivation
According to Maslow’s Hierarchy of Needs, what are the five levels of employee motivation?
Physiological needs: Basic wages, food, shelter.
Safety needs: Job security, safe working environment.
Social needs: Teamwork, good workplace relationships.
Esteem needs: Recognition, promotions.
Self-actualization: Personal growth, achieving potential.
What is the importance of good employer-employee relations?
Increases productivity and morale
Reduces conflicts and absenteeism
Improves company reputation
What is collective bargaining?
A process where employers and employee representatives (e.g., trade unions) negotiate wages and working conditions.
What are trade unions?
Organizations that represent workers in the labor force.
What do trade unions do?
They aim to protect the and negotiate better wages and conditions.
What are the common causes of industrial disputes?
Low wages
Poor working conditions
Lack of job security
Unfair treatment
What methods can businesses use to resolve workplace conflicts?
Negotiation
Mediation
Arbitration
What is workforce planning?
A strategy to ensure a business has the right number of employees with the right skills at the right time.
What is a hierarchical organizational structure?
A system with multiple levels of authority, where decision-making flows from top to bottom.
What is a flat organizational structure?
A system with few levels of management, promoting faster decision-making and employee autonomy.
What are the advantages of a hierarchical structure?
Clear chain of command
Well-defined roles and responsibilities
Easier supervision
What are the advantages of a flat structure?
Faster communication
Encourages employee empowerment
Reduces bureaucracy
Who is an entrepreneur?
An individual who creates, organizes, and runs a business while taking financial risks to make a profit.
What are the key roles of an entrepreneur?
Generating business ideas
Organizing resources
Taking risks
Making decisions
Managing and leading the business
What are the main characteristics of a successful entrepreneur?
Creativity
Risk-taking
Resilience
Initiative
Determination
What are the rewards of being an entrepreneur?
Profit and financial independence
Personal satisfaction
Control over decision-making
Opportunity to pursue passion
What are the main skills an entrepreneur needs?
Leadership and management
Decision-making
Financial management
Negotiation
Communication
What are the risks of being an entrepreneur?
Financial loss
Business failure
Uncertain income
High levels of stress
What are the different types of business objectives?
Profit maximization
Survival
Growth (e.g., market share expansion)
Social objectives (e.g., sustainability, ethics)
Customer satisfaction
Why might a new business focus on survival instead of profit?
High competition and low brand awareness
Limited financial resources
Economic uncertainty
What is the difference between profit maximization and profit satisficing?
Profit maximization: Aiming to make as much profit as possible.
Profit satisficing: Making enough profit to satisfy stakeholders while maintaining work-life balance.
What are common sources of finance for entrepreneurs?
Personal savings
Bank loans
Venture capital
Business grants
Crowdfunding
What is the difference between an entrepreneur and a leader?
Entrepreneur: Focuses on starting a business and taking risks.
Leader: Guides and manages people within the business.
What challenges does an entrepreneur face when transitioning into a leader?
Delegating tasks effectively
Managing a larger workforce
Developing strategic thinking
Maintaining company culture
Adapting to a more structured decision-making process
Why is delegation important for a leader?
Reduces workload
Allows employees to develop skills
Increases efficiency and productivity
How can an entrepreneur develop leaderships skills?
Taking management training courses
Gaining experience in team leadership
Learning from mentors
Seeking employee feedback
What are the main types of business growth?
Organic growth: Expanding through increased sales and internal investment.
Inorganic growth: Expanding through mergers and acquisitions.
What leadership qualities are important for business growth?
Strategic thinking
Decision-making ability
Communication and motivation skills
Adaptability to change
How does leadership style affect business growth?
Autocratic leaders may slow innovation but ensure efficiency.
Democratic leaders encourage creativity and employee engagement.
Laissez-faire leaders promote independence but may lead to a lack of direction.
