Unit 10 : Marketing, Competition and the Consumer

Question 1

Define Marketing

Answer 1

identifying and satisfying customer needs and satisfying them profitably

Question 2

Define a Customer

Answer 2

a person, business or other organization that buys goods or services from a business

Question 3

What does the Sales Team do

Answer 3

responsible for sales of products

Question 4

What does the Market Research Department do

Answer 4

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.

Question 5

What does the Promotion Section do

Answer 5

deals with organizing advertising for products

Question 6

What does the Distribution Section do

Answer 6

transports products to the market

Question 7

5 Roles of Marketing

Answer 7

1. identifying customer needs - done via market research.
2. satisfy customer needs - selling exact products that a customer wants for a price they’re willing to pay
3. 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
4. building customer relationships - to gain information about customers.
5. anticipate changes in customer needs - identifying new trends in customer demands or find gaps in the market

Question 8

Define Customer Loyalty

Answer 8

when existing customers continually buy products from the same business

Question 9

Define Customer Relationships

Answer 9

communicating with customers to encourage them to become loyal to the business and it’s products

Question 10

7 things that identifying customer requirements and needs can the business achieve

Answer 10

1. raising awareness of the product / service of the business
2. increase in revenue / profit
3. increase / maintained market share
4. maintain / improve image of product / business
5. target new market / market segment
6. enter a new market ( at home / abroad )
7. develop new products / improve existing products

Question 11

4 Reasons why Consumer Spending Patterns Change

Answer 11

1. trends and fashion changes - it may be “fashionable” to have a product for some time, but not later
2. advancement / changes in technology - new products that have the latest technology make older products sales drop
3. unemployment / change in income - economies with high unemployment / low wages will have lower sales of luxury / expensive products
4. ageing population - countries with a higher percentage of old people would have higher sales in specific products.

Question 12

3 Reasons why some Markets have become more competitive

Answer 12

1. globalization - more products are being sold all over the world
2. transportation - transporting products is cheaper, quicker and easier now
3. internet / e-commerce - customers are now able to search for products and buy them from anywhere in the world

Question 13

4 Ways a Business can Respond to Changing Spending Patterns and Increased competition

Answer 13

1. maintaining good customer relationships
2. improving existing products
3. keeping costs low
4. bringing out new products to keep customers’ interest

Question 14

Define a Market

Answer 14

total number of customers, potential customers and other sellers of a product / service

Question 15

Define a Mass Market

Answer 15

where there is a large number of sales of a product type

Question 16

4 Advantages of a Mass Market

Answer 16

1. total sales are high
2. benefits from economies of scale
3. risks are spread due to variations of product
4. opportunities for growth due to large potential sales

Question 17

3 Disadvantages of a Mass Market

Answer 17

1. high levels of competition
2. high costs of advertising and promotion
3. may not meet specific needs of customers due to standardization of product / service

Question 18

Define Niche Market

Answer 18

small, usually specialized, segment of a larger market

Question 19

2 Advantages of a Niche Market

Answer 19

1. avoids competition with larger businesses
2. focuses on customer needs closely resulting in higher levels of customer loyalty and better customer relations

Question 20

2 Disadvantages of a Niche market

Answer 20

1. limited sale potential
2. 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.

Question 21

Define a Market Segment

Answer 21

a market segment is an identifiable sub-group of a whole market where customers have similar characteristics / preferences

Question 22

3 Benefits of Market Segmentation

Answer 22

1. creates different variations for different groups, selling more products
2. because characteristics of consumers are known, market strategies are more cost=effective, increasing sales.
3. identifying a market segment without its needs met increases the opportunity for increased sales

Question 23

6 Different Ways of Segmenting a Market

Answer 23

1. age
2. socio-economic group
3. region / location
4. gender
5. lifestyle
6. use of Product

Question 24

Which method of segmentation should be used depends on which factors

Answer 24

1. detailed analysis of market and size of potential segment in terms of consumers + likely sales
2. company image and brand image
3. cost of entering segment