Unit 3: Chapter 10

Question 1

Define Marketing

Answer 1

identifying customers wants and needs and satisfying them profitably.

Question 2

Define Customer

Answer 2

a person, business, or other organisation which buys goods or services from a business.

Question 3

What are the roles of marketing?

Answer 3

• identifying customers needs
• satisfying customers needs
• maintain customer loyalty
• gain information about customers
• anticipate changes in customers needs

Question 4

What is customer loyalty?

Answer 4

existing customers continually buy products from the same business.

Question 5

What are customer relationships?

Answer 5

communicating with customers to encourage them to become loyal to the business and its products

Question 6

What does a successful marketing department do?

Answer 6

• raise customer awareness of products of business
• increase revenue + profit + market share
• maintain and improve brand image
• target new markets
• develop new products + improve existing products

Question 7

What is market share?

Answer 7

percentage of total sales in a market by one business.

Question 8

What is a consumer?

Answer 8

someone who buys goods/services for personal use. not to sell.

Question 9

Why do customer spending patterns change?

Answer 9

taste/fashion change, incomes change, better products come on the market.

Question 10

How do businesses respond to customer changing patterns?

Answer 10

• maintain good customer relationships
• improve existing products
• create new products (inc interest)
• keep costs low to maintain competitiveness

Question 11

Why must businesses change in order to meet customer needs?

Answer 11

They rely on customers sales therefore they must follow their needs as the market changes. If they they don’t, they don’t get sales, so the business fails.

Question 12

What is a market?

Answer 12

Total number of customers, potential customers and sellers for that good/service

Question 13

What is a mass market and niche market?

Answer 13

large number of sales of a product (the whole market)

small number of sales of a product - specialised segment of a larger mass market

Question 14

What are the pros and cons of mass market?

Answer 14

the sales with be high, there are many opportunities for growth.

there is high competition and high costs (promotion)

Question 15

What are the pros and cons of a niche market?

Answer 15

it reduces competition, you can focus closer on the needs of customer - high consumer loyalty.

because it is small there is limited sales potential and if you only specialise in one product if it goes out of fashion the business fails.

Question 16

What is a market segment and advantages?

Answer 16

identifiable subgroup of a whole market in which consumers have similar characteristics and preferences. (age, gender, lifestyle, income. region etc.)

it is cost effective since you pin down who to promote to, therefore higher sales. also if you are adding to market segment (original product) you are meeting to needs that are normally not met so it offers more opportunities to increase sales.

Question 17

What are some Factors businesses should consider before choosing a market segment?

Answer 17

• analysis of market + size
• company/brand image
• cost of entering segment

Question 18

How do you calculate market share?

Answer 18

total product/business sales/total sales in whole world * 100