1.1 Meeting Customer Needs

Question 1

Pros and cons of identifying their target market

Answer 1

Pros - focus your market research, may produce better research results for your money, focus tour marketing
Cons - miss out some potential customers

Question 2

Definition of Coherent

Answer 2

Forming a unified whole

Question 3

Definition of Market

Answer 3

Ant place where Uber and sellers come together to trade goods and services for money

Question 4

Definition of Market Size

Answer 4

Value - the total value of all goods sold in the businesses
Volume - the physical quantity or numbers of customers

Question 5

Definition of Market Share

Answer 5

The proportion of a market a single business or brand is responsible for

Question 6

Market Share calculation

Answer 6

( Sales of one brand/total sales in the market ) x 100

Question 7

Definition of Mass Markets

Answer 7

Markets where goods are produced in large quantities

Question 8

Definition of Niche Market

Answer 8

Markets where goods are produced in smaller quantities
Smaller specialised markets

Question 9

Pros and cons of Mass Markets

Answer 9

Pros - huge number of potential customers, economies of scale, higher revenue, the higher revenue can be put into research and development
Cons - can be large amount of competition, may need to spend high amounts on advertising to stand out from the competition, high volume production not flexible to chains consumer demand

Question 10

Pros and cons of Niche Markets

Answer 10

Pros - a lack of competition, allow them to charge premium prices, can easily target customers, small flexible production allows them to respond to changing customer demand
Cons - can be too small to survive as demand may not be constant and product can go out of fashion quickly there is more risk, small companies may face competition from large manufactures and get pushed out of the market, high production costs due to lack of economies of scale

Question 11

Definition of E-Commerce

Answer 11

Buying and selling of goods and services over an electronic network

Question 12

How do markets change

Answer 12

The size
The nature
New markets

Question 13

Definition of Market Research

Answer 13

The action/activity of gathering information about consumers’ needs and preferences

Question 14

Benefits of a market research orientated business

Answer 14

More likely to create products that consumer want - less product failures
More accurate and defined promotion
Can anticipate market changes - allows flexibility

Question 15

Definition of Primary Research

Answer 15

Data which is obtained first hand

Question 16

Definition of Secondary Research

Answer 16

Collection of data that already exists

Question 17

Definition of Quantitative Data

Answer 17

Research that can be interpreted in numerical form

Question 18

Definition of Qualitative Data

Answer 18

Research that is based on thoughts, feelings and emotions

Question 19

Definition of Competition

Answer 19

Other companies in the market who sell similar products

Question 20

Definition of Risk

Answer 20

The possibility of something bad happening

Question 21

Difference between risk and uncertainty

Answer 21

Risk is a decision and something you can control whereas uncertainty is related to external factors and you cannot control it

Question 22

Definition of Product Orientation

Answer 22

An approach to business that places emphasis on the production process and the product

Question 23

Definition of Market Orientation

Answer 23

Places emphasis on placing the consumer at the centre of the decision making process

Question 24

Pros and cons of Product Orientation

Answer 24

Pro - less spending on market research, create a reputation for high quality, can find a competitive advantage/USP
Con - could be hard to sell to consumers as they haven’t been consulted, can lead to many product failures, development cost can be high, can be seen as inflexible

Question 25

Pros and cons of Market Orientation

Answer 25

Pro - less product failures, more accurate and defined promotion, anticipate market changes Con - Market research is expensive, not all research is useful

Question 26

Why do companies conduct market research

Answer 26

Identify and anticipate customer needs and wants Quantifiable the likely demand for a product Provide an insight into customer behaviour To assess the behaviour of competitors

Question 27

Pros and cons of Primary Research

Answer 27

Pro - information is specific to your business, provides detailed feedback, up to date, find out exactly what you need, easier to analyse Con - very expensive, takes a long time to collect, maybe bias in questionnaire or interview

Question 28

Pros and cons of Secondary Research

Answer 28

Pro - cheaper, huge amount of information available, quick to collect, gives a good overview of the market Con - not specific to your business, can take a long time to find what you need, can take longer to analyse, can be out of date

Question 29

Definition of Market Segmentation

Answer 29

Part of a whole market where a particulate customer group has similar characteristics

Question 30

What are the 4 type of market segmentation

Answer 30

Geographic Demographic Psychographic Behavioural

Question 31

Pros and cons of market segmentation

Answer 31

Pros - different product for different segments - increase revenue, loyal customers, business avoid wasting promotional resources Cons - Psychographic and behavioural segmentation will cost a lot it can be too simplistic, have use as many types of segmentation as possible, some segmentation methods do not apply to all products, can end up narrowing down your target market

Question 32

Definition of Market Positioning

Answer 32

The view consumers have about the quality, value for money and image of a product in relation to those of their competitors

Question 33

The different categories used to position a product

Answer 33

Quality Value for money Status Practicality Healthy Environmental impact

Question 34

Methods of market positioning

Answer 34

Benefits of the product Unique selling point Attributes of the product Origin of the product Classification

Question 35

Definition of Market Mapping

Answer 35

Find out how consumers perceive their brand Allows them to position their brand in the market or find gaps in the market Results of this research can be shown in a perceptual map

Question 36

Limitations of Market Maps

Answer 36

Only 2 attributes can be looked at one time Research is expensive to gather using primary research Might be relevant for individual brands and not a whole image of a business Some maps may only be based on marketing departments opinions and not market research

Question 37

Definition of Competitive Advantage

Answer 37

When a business stands out form their competitors Business offers a customer better value, either by lowering prices or providing greater benefits and service which justifies higher prices

Question 38

How do businesses create a competitive advantage

Answer 38

Product design Product quality Promotion Customer service Delivery times Flexibility Ethical/environmental stance Focusing on a market segment Economies of scale

Question 39

Methods of adding value

Answer 39

Bundling Customer service Speed of response to customers Packaging Request buyer options