1.1 - Meeting Customer Needs Flashcards
(41 cards)
What are some drawbacks of being in a mass market?
-Highly competitive
-Requires large investment in marketing –> in 2013 Coke spend $3.3bn on global marketing
What are some benefits of being in a Niche market?
- Opportunity to charge higher prices
-First in the market advantages
What are some drawbacks of being in a Niche Market?
-Risky for a business in a small market
-Vulnerable to large businesses entering the market ( who can also afford to charge lower prices)
What is the Market Share Formula?
Sales of a business/Total sales in the market x 100
What can the Market Share Formula be used in comparison with?
- compared to last years figures
- compared to market shares in other countries
- compared to competitors
What can businesses do with market share information?
-Set new objectives
-replicate what the market leaders are doing
What may branding be used for?
-differentiate the product from there rivals
- create customer loyalty
-help product recognition
- develop an image
-charge a premium price when brand becomes strong
When do new markets occur?
-with a brand new product e.g. flat screen TVs, mobile phones
- In ‘emerging markets’ –> BRICS/ MINT Market
What does BRICS stand for?
-Brazil
-Russia
-India
-China
-South Africa
What does MINT stand for?
- Mexico
- Indonesia
-Nigeria - Turkey
Why does Growth occur in new markets?
- Economic Growth –> more disposable income leads to growth
- Innovation –> new products the tablets or 3D printers, but also variations/ improvements i.e. Click and Collect
-Social changes –> fewer marriages, more single parent families - Changes in legislation –> e.g. ban on tobacco advertising and smoking in public places
-Demographic changes – its growing also other people
How do businesses adapt to change?
-Flexibility –> having a flexible culture , with multi-skilled staff, flexible machinery and operations
-Market research –> this should be ongoing with current and potential customers
- Investment –> in new product development and also in training and new, flexible machinery
-Continuous Improvement –> in all aspects, more efficiency - saves money better customer service - means repeat purchases
- Develop a niche –> if that market does change and you cant specialise in what you do do e.g. Harley Davison
How do businesses deal with competition?
- some businesses may decide to take over their competition
- they may try ways to beat competitors e.g. big advertising campaigns, Laws are in place to stop unfair competition
Who benefits from competition?
-customers benefit from this competition as they get more choices
- Government –> when competition doesnt exist they can be exploiter, High prices and little innovation
What are external factors which could impact a businesses?
-Competition
-Consumer tastes change because of a social trend
- New government legal policies
- New technology
-Natural disaster i.e. floods
- The economy going into a recession
What is a Product-Orientated business?
more historical businesses, they make products they think customers will want to buy and that will sell well
What is a Market-Orientated business?
This business is one which continually identifies, reviews and analyses customer needs, they must address the marketing mix
How does Market-Orientated businesses have advantages over product orientated businesses?
-it can respond move quickly to changes in the market
-it will be in a stronger position to meet challenger of new competition entering the market
-it will be more able to anticipate market changes
-it will be more confident that the launch of a new product will be a success
What makes a business become product or market orientation?
-The Nature of the product–> new technologies, customers pharmaceuticals - product-based
-Policy decisions –> is the business objective market share or safety
- The views of those in control –> an engineer or marketer
-The nature and size of the market –> if production costs are high - market orientated to ensure you’re launching a product costumers want
- The degree of competition –> highly competitive - market
What are disadvantages of market research?
- time-consuming
-expensive
-telephone –> if they know their home they are going to be less honest
-human behaviour - postal surveys–> people may not reply
- consumer panel –> need to gather a wide range of people
What can Market Research tell a business?
- what features customers what
-how much they are willing to pay
-where they shop
-what age and gender they are
-who the main competitors are
-if the market is shrinking or growing
What is Primary research?
the gathering of new information, called primary data, which has not been collected before
Examples of Primary research…
-Questionnaires and Surveys
-Hall tests
-Observation
-Focus groups
-Experiments
What is Secondary research?
the process of gathering secondary data, which is information that has already been gathered, such as sales records or government statistics
