1.1 meeting consumer needs

Question 1

market definition

Answer 1

buyers and sellers that trade a particular type of product in a particular place

Question 2

niche marke

Answer 2

where businesses target a smaller segment of a larger marker - where customers have specific needs and wants

Question 3

mass market

Answer 3

• products in the mass market are aimed at a large group of buyers
• product has a wide appeal and useful to a variety of people

Question 4

examples of mass and niche market for chocloate

Answer 4

• mass - cadbury - wide range of products which appeal to wide range or customers
• niche - Moo Free - dairy free chocolate

Question 5

pros and cons to mass market

Answer 5

PROS
- sells to more consumers than niche - higher sales volume
- larger production can reduce costs per unit, leading to higher profits.
- larger market size
CONS
- more competition - many businesses targeting the same consumers
- no brand loyalty

Question 6

pros and cons to niche market

Answer 6

PROS
- less competition
- specialised products so can charge higher prices
- customer loyalty
CONS
- risky bc selling to a smaller number and narrower range of customers
- vulnerable to market changes ‘all eggs in one basket’

Question 7

market size definition

Answer 7

total value of sales in a market over a certain time period (total number of consumers)

Question 8

market share definition and formula

Answer 8

the proportion of the total market that the business holds
- (their sales/ total sales in the total market) x100 = %

Question 9

branding in mass markets

Answer 9

• essential to make their brand distinctive
• logo, name, statement
• recognisable

Question 10

dynamic market definition

Answer 10

market changes and evolves rapidly

Question 11

reasons for a dynamic market (how they change)

Answer 11

• CONSUMER PREFERENCES - trends/technology etc
• INNOVATION - new products emerge eg digital cameras grew and old polaroids declined
• COMPETITION - competitors can enter or leave the market
• LAWS - changes to legalisation eg tax on sugary drinks means a change to product so dont have to pay tax

Question 12

pros to online retailing

Answer 12

• businesses costs lower - no rent/ staff
• order at any time, anywhere in the world
• customers can compare prices easily - find cheapest option
• eaisly create deals/discounts - appeals to customers

Question 13

cons to online retailing

Answer 13

• more competition
• cannot physically see product - might not fit/wrong material etc
• cannot speak to staff - less personal/ efficient customer service
• personal details could be leaked

Question 14

examples of dynamic markets

Answer 14

• film industry —> Netflix
• taxi services —> uber
• camera market —> iphone

Question 15

direct competition definition

Answer 15

2+ businesses sell SIMILAR products that appeal to the same group of customers - eg Aldi and Tesco

Question 16

INdirect competition definition

Answer 16

2+ businesses sell DIFFERENT products for the same group of customers - eg italian and india resturants compeat for anyone wanting a takeaway

Question 17

marketing mix - PPPP

Answer 17

• PRODUCT - good quality, distinctive, unique, innovation
• PROMOTION - promotional campaigns, advertising, branding, events
• PRICE - cheaper than competitors - using competitive pricing stragtegies
• PLACE - easy access - online, apps

Question 18

how does competition affect the nature of ownership

Answer 18

can be a sole trader and change to operate as a franchise - use name, idea and reputation of an existing buisness

Question 19

risk definition

Answer 19

• the possibility that something will go wrong
• CONTROLLABLE
• before making a decision, businesses can consider the probability of negative outcome and try to minimise this

Question 20

uncertainty definition

Answer 20

• unpredictable and uncontrollable events that affect a business
• UNCONTROLLABLE

Question 21

product orientation

Answer 21

• focuses on design, quality and performance of the product rather than what consumer actually wants
• creates new and innovative products that they HOPE consumers like and buy
• eg apple and new iPhones

Question 22

market orientation

Answer 22

• selling products that match customer preferences
• invests lots into market research to find out what the customer wants
• charges higher prices bc its tailored to what customers want
• low risk - based on customer feedback

Question 23

reasons why market research is important

Answer 23

• finds out NEEDS and WANTS and anticipates them for the future
• allows businesses to predict how much demand there will be for products therefore how much it will need to supply
• find out if they buy more online/in-store
• identify competitors
• find SLEPT factors (social, legal, economic, political, technological)

Question 24

quantitative market research

Answer 24

numerical statistics eg multiple choice questionnaires
- quicker
- easier
- can be statistically ananlysed
- CLOSED QUESTIONS

Question 25

qualitative market research

Answer 25

- opinions of consumers - eg 'how did this product make you feel' - OPEN QUESTIONS - more informative and flexible

Question 26

what is primary and secondary market research

Answer 26

primary - businesses gather new data secondary - using data already available

Question 27

types of primary market research

Answer 27

- questionnaires - surveys - interviews - test marketing (launch a product in certain area and record response) - sampling

Question 28

pros and cons to primary research

Answer 28

pros - good for niche markets - competitors cannot benefit from it - essential for a new product bc there wont be any secondary research - specific for purpose cons - labour intensive - slow - £££££££

Question 29

types of secondary market research

Answer 29

- government publications - Internet sources - Statista - trade magazines - market reports

Question 30

pros and cons to secondary market research

Answer 30

pros - easier - faster - cheaper cons - unsuitable - out of date - may be errors

Question 31

what could and couldn't causes BIASES in market research

Answer 31

bias - interviews (personality of the interviewer and person being interviewed) not bias - anonymous questionaires

Question 32

ICT (information and communication technology)

Answer 32

- helps market research - easier, cheaper, quicker - more info and wider audience - EG webistes, social networking and data bases

Question 33

ICT 1 websites - pros and cons

Answer 33

pros - analyse what times of year/day website is used most - what people are clicking on when they r on the website - how much people are likely to spend on the website - you can look at competitors websites - read reviews cons - if ppl dont buy the product we dont know why

Question 34

ICT 2 social networking - pros and cons

Answer 34

pros - firms can post content on social networking sites and monitor their response - quick and cheap - track current trends - eg Facebook, hashtags, tiktok etc cons - not all consumers use the sam social media eg less older ppl on tiktok - dif results

Question 35

ICT 3 databases

Answer 35

- eg loyalty cards - businesses can see names/adreeses and preferences of consumers

Question 36

segmentation definition

Answer 36

dividing a market into a group of buyers based on characteristics such as hobbies or age

Question 37

4 different ways to segment a market

Answer 37

- demographic segment: age/gender/socio-economic class - geographic segment: city/county/country - income segment: DIOR makeup is targeted at high income and Superdrug at low - behavioural segment: amount of use/hobbies/lifestyle

Question 38

pros and cons to market mapping

Answer 38

pros - reveals gaps in the market - close competitors - help make pricing strategies cons - based on opinion sometimes - simplifies things too much

Question 39

what is USP

Answer 39

product differentiation makes product more inelastic