Unit 10 : Marketing, Competition and the Consumer Flashcards
Define Marketing
identifying and satisfying customer needs and satisfying them profitably
Define a Customer
a person, business or other organization that buys goods or services from a business
What does the Sales Team do
responsible for sales of products
What does the Market Research Department do
responsible for discovering customers’ needs, market changes and the impact of competitors’ actions. Report can be used in decision making, research, developing new products, price levels, etc.
What does the Promotion Section do
deals with organizing advertising for products
What does the Distribution Section do
transports products to the market
5 Roles of Marketing
- identifying customer needs - done via market research.
- satisfy customer needs - selling exact products that a customer wants for a price they’re willing to pay
- maintain customer loyalty - maintaining close relationships helps discover product expectations and changes that need to be made. its cheaper to keep existing customers than to attract new ones
- building customer relationships - to gain information about customers.
- anticipate changes in customer needs - identifying new trends in customer demands or find gaps in the market
Define Customer Loyalty
when existing customers continually buy products from the same business
Define Customer Relationships
communicating with customers to encourage them to become loyal to the business and it’s products
7 things that identifying customer requirements and needs can the business achieve
- raising awareness of the product / service of the business
- increase in revenue / profit
- increase / maintained market share
- maintain / improve image of product / business
- target new market / market segment
- enter a new market ( at home / abroad )
- develop new products / improve existing products
4 Reasons why Consumer Spending Patterns Change
- trends and fashion changes - it may be “fashionable” to have a product for some time, but not later
- advancement / changes in technology - new products that have the latest technology make older products sales drop
- unemployment / change in income - economies with high unemployment / low wages will have lower sales of luxury / expensive products
- ageing population - countries with a higher percentage of old people would have higher sales in specific products.
3 Reasons why some Markets have become more competitive
- globalization - more products are being sold all over the world
- transportation - transporting products is cheaper, quicker and easier now
- internet / e-commerce - customers are now able to search for products and buy them from anywhere in the world
4 Ways a Business can Respond to Changing Spending Patterns and Increased competition
- maintaining good customer relationships
- improving existing products
- keeping costs low
- bringing out new products to keep customers’ interest
Define a Market
total number of customers, potential customers and other sellers of a product / service
Define a Mass Market
where there is a large number of sales of a product type
4 Advantages of a Mass Market
- total sales are high
- benefits from economies of scale
- risks are spread due to variations of product
- opportunities for growth due to large potential sales
3 Disadvantages of a Mass Market
- high levels of competition
- high costs of advertising and promotion
- may not meet specific needs of customers due to standardization of product / service
Define Niche Market
small, usually specialized, segment of a larger market
2 Advantages of a Niche Market
- avoids competition with larger businesses
- focuses on customer needs closely resulting in higher levels of customer loyalty and better customer relations
2 Disadvantages of a Niche market
- limited sale potential
- if the business specializes in one product, and that product has low demand, it will fail. this means higher risks as they aren’t spread.
Define a Market Segment
a market segment is an identifiable sub-group of a whole market where customers have similar characteristics / preferences
3 Benefits of Market Segmentation
- creates different variations for different groups, selling more products
- because characteristics of consumers are known, market strategies are more cost=effective, increasing sales.
- identifying a market segment without its needs met increases the opportunity for increased sales
6 Different Ways of Segmenting a Market
- age
- socio-economic group
- region / location
- gender
- lifestyle
- use of Product
Which method of segmentation should be used depends on which factors
- detailed analysis of market and size of potential segment in terms of consumers + likely sales
- company image and brand image
- cost of entering segment
