Unit 10

Question 1

Q1. What is a customer base?

Answer 1

A1. A customer base refers to the group of customers a business sells its products to.

Question 2

Q2. What is a market?

Answer 2

A2. A market encompasses all customers and consumers who are interested in buying a product and have the financial resources to do so.

Question 3

Q4. What is a customer?

Answer 3

A4. A customer is an individual or business that buys goods and services from a business.

Question 4

Q3. What is a target market?

Answer 4

A3. A target market consists of individuals or organizations identified by a business as the customers or consumers of its products.

Question 5

Q5. What is a consumer?

Answer 5

A5. A consumer is the final user of a product.

Question 6

Q6. What are consumer markets?

Answer 6

A6. Consumer markets are markets for goods and services bought by the final customer.

Question 7

Q8. What is the business environment?

Answer 7

A8. The business environment is the combination of internal and external factors that influence the operations of a business.

Question 8

Q7. What are industrial markets?

Answer 8

A7. Industrial markets are markets for goods and services bought by other businesses to use in their production process.

Question 9

Q9. What is free trade?

Answer 9

A9. Free trade refers to the absence of barriers that might prevent trade between different countries.

Question 10

Q10. What is niche marketing?

Answer 10

A10. Niche marketing involves developing exclusive products for a small segment of the market.

Question 11

Q11. What is mass marketing?

Answer 11

A11. Mass marketing involves selling a common, same product to the entire market.

Question 12

Q12. What is a market segment?

Answer 12

A12. A market segment is a part of the whole market in which consumers have specific characteristics.

Question 13

Q14. What is geographic segmentation?

Answer 13

A14. Geographic segmentation involves dividing consumers in the market by geographic area.

Question 14

Q13. What is market segmentation?

Answer 14

A13. Market segmentation involves dividing the whole market into segments based on consumer characteristics and then targeting different products to each segment.

Question 15

Q15. What is demographic segmentation?

Answer 15

A15. Demographic segmentation involves dividing customers in the market by age, gender, income, ethnic background, and social class.

Question 16

Q16. What is psychographic segmentation?

Answer 16

A16. Psychographic segmentation involves dividing consumers in the market by lifestyles, personalities, and attitudes.

Question 17

Q17. What is privatization?

Answer 17

A17. Privatization involves selling off public sector businesses to private sectors.

Question 18

Q18. What is the importance of customer base?

Answer 18

A.18 A business needs a group of customers who the business can sell products to, this group is known as customer base. The business must satisfy the customer base in order to maintain customer loyalty.

Question 19

Q.19 How does building customer relationships help businesses?

Answer 19

A.18 Collection information about customers’ income, lifestyle and buying habits to identify and satisfy customer needs.

Question 20

Q.20 What are the reasons for change in customer spending pattern?

Answer 20

A.20
1) Price of product.
2) Price of competitors’ products.
3) Changes in customer income.
4) Changes in population size and structure.
5) Change in taste and fashion.
6) Spending on advertisement and other promotional activities.

Question 21

Q. 21 How does Price of product affect spending patterns?

Answer 21

A21. The lower the price the more amount will be sold and vice versa.

Question 22

Q.22 How does the price of competitors’ products affect spending patterns?

Answer 22

A22. Customers will buy from the business with the lowest price.

Question 23

Q.23 How does changes in customer income affect spending patterns?

Answer 23

A23. When income rates decrease, customers will spend less on wants and luxurious items.

Question 24

Q.24 How does changes in population size ad structure affect customer spending patterns?

Answer 24

A24. The more population there is the bigger market is needed.

Question 25

Q.25 How does changes in taste and fashion affect customer spending patterns?

Answer 25

A25. The demand of products changes over time.

Question 26

Q.26 What are the benefits of mass marketing.

Answer 26

A26. 1) Reduces unit cost. 2) Larger market has more potential for sales. 3) Changes in consumer spending pattern has less impact.

Question 27

27. What are the disadvantages of mass marketing.

Answer 27

1) More market competition. 2) Not all markets are big enough to support mass marketing. 3) Complicated expectations from customer has reduced efficiency for mass marketing.

Question 28

28. What is the importance of market segmentation?

Answer 28

A29. People from different backgrounds such as gender, religion, ethnicities and other factors change the demands and expectations of customers. Market segment makes it easier to target people with different backgrounds easier.

Question 29

Q29. What are the benefits of market segmentation?

Answer 29

A30. 1) Goods and services can be designed to meet the specific needs. 2) Allows segmentation and targeting of customers with special requirements. 3) Marketing strategies can easily be selected for each segment. 4) Small firms can operate in less segments. 5) May be possible to charge higher prices for similar products or services.

Question 30

Q30. What is the importance of customer loyalty?

Answer 30

A30. Customer loyalty means that a customer base is created. Customer base is a group of people who will buy products specifically from the business.

Question 31

Q31. Activities of government intervention in markets.

Answer 31

A31. 1) Legal control that prevent firms from dominating markets. 2) Selling off public sector organizations to private sectors. (privatization) 3) Removal of government controls from industry. 4) Providing financial and other aids to small and medium sized businesses.

Question 32

Q.32 E-commerce in business.

Answer 32

A.32 Organizations have their own websites and use social media networks to promote products.

Question 33

Q.33 Ways businesses respond to changing patterns.

Answer 33

A.33 1) Product development. 2) Improve efficiency. 3) Increased promotion. 4) Look for new markets.

Question 34

Q.34 Explain how this allows businesses to assess to changing spending patterns: Product development.

Answer 34

A.34 Market research will identify the needs and wants of customers after changes.

Question 35

Q.35 Explain how this allows businesses to assess to changing spending patterns: Improves efficiency.

Answer 35

A.35 Efficient use of resources will help a business to reduce average costs.

Question 36

Q.36 Explain how this allows businesses to assess to changing spending patterns: Improve efficiency

Answer 36

A.36 Efficient use of resources will help a business to reduce average costs.

Question 37

Q.37 Explain how this allows businesses to assess to changing spending patterns: Increased promotion

Answer 37

A.37 Increasing advertising to persuade consumers to buy products.

Question 38

Q.38 Explain how this allows businesses to assess to changing spending patterns: Look for new markets

Answer 38

A.38 Consumer spending patterns change and causes more competition, thus looking for a different market may help.

Question 39

Q.39 What are the benefits of niche marketing?

Answer 39

A.39 1) Small firms are able to earn profit. 2) Less competition. 3) Consumers will usually pay more.

Question 40

Q.40 What are the disadvantages of niche marketing?

Answer 40

A.40 1) May attract competitors, reducing profit. 2) Economies of scale are less likely to be achieved. 3) Small changes in consumer spending patterns could have a big impact.

Question 41

Q.41 What are the methods of segmentation?

Answer 41

A.41 1) Geographic segmentation. 2) Demographic segmentation. 3) Psychographic segmentation.

Question 42

Q.42 What are the Factors of geographic segmentation

Answer 42

A.42 1) Different regions in the same country. 2) Different regions in the world. 3) Different countries in the world.

Question 43

Q.43 What are the Factors of demographic segmentation

Answer 43

A.43 1) Age, 2) Gender, 3) Income, 4) Social class, 5) Ethnic background, 6) Family size.