1.1 Meeting Customer Needs

Question 1

Market

Answer 1

Groups and individuals and organisations that make up the pool of actual and potential customers

Question 2

Dynamic Markets

Answer 2

Market which is always changing due to trends and evolving customer requirements

Question 3

Market size

Answer 3

Total value of market in terms of money spent or no. products

Question 4

Market growth

Answer 4

The % change in the size of a market compared to the previous year

Question 5

Market Share

Answer 5

The % of the market held by one company or product

Question 6

Innovation

Answer 6

The development of new products, changes in design of established products

Question 7

Pros of Innovation

Answer 7

Gaining a competitive advantage
Adding value so that a higher price can be charged

Question 8

Cons of Innovation

Answer 8

High costs of r and d
High risk of failure
Disruption caused to the way the business operates
Risk of cannibalisation

Question 9

Pros of Online retailing

Answer 9

Shop open 24/7
Can reach international markets
Low overhead costs
Stock can be easily withdrawn or updated
Flexible
Opportunities for fast growth

Question 10

Cons of Online retailing

Answer 10

High no. returns
Issues with online security
Competitive Market
IT skills

Question 11

Risks in a business

Answer 11

Insufficient demand due to poor market research or the reaction of competitors
Poor execution due to poor management and lack of financial control
External shocks

Question 12

Rewards in business

Answer 12

Increased sales
Profits and Growth
Return on investment for owners
Increased share price
Customer loyalty and Brand recognition

Question 13

Business plan

Answer 13

Formal statement of goals, risks and rewards etc

Question 14

Calculated risk

Answer 14

Refer to situations where the business as an idea about the potential outcomes and chances of occurring

Question 15

Uncertainty

Answer 15

A business doesn’t know what is likely to happen in the future and can not measure and predict outcomes

Question 16

Market orientated approach

Answer 16

Decisions are taken based around information about customers needs or wants rather than the what the business thinks

Question 17

Product orientated approach

Answer 17

The business develops products based on what it is good at making or doing rather than what a customer wants

Question 18

Primary research

Answer 18

New research carried out to answer specific issues or questions

Question 19

Secondary research

Answer 19

Makes use of information previously researched for other purposes and publicly available

Question 20

Methods of primary research

Answer 20

Questionnaires
Interviews
Observation
Loyalty Cards
Focus Groups
Test Marketing

Question 21

Methods of secondary research

Answer 21

Annual reports
Internal data
Gov sources
Trade journals
Market research companies

Question 22

Market segments

Answer 22

A group of consumers that have similar set of characteristics

Question 23

How a market can be segmented

Answer 23

Age
Gender
Income
Lifestyle
Education
Geographical
Religion/ Ethnicity

Question 24

Geographic market segmentation

Answer 24

Where people live e.g. region, post code, urban or rural

Question 25

Demographic market segmentation

Answer 25

Age, occupation, education, income, gender, family size

Question 26

Behavioural market segmentation

Answer 26

Looks at behaviour of groups of customers and details on frequency of purchase and loyalty to brands

Question 27

Psychographic market segmentation

Answer 27

Social class, personality type and lifestyle

Question 28

Benefits of segmentation

Answer 28

Better matching of customer needs
Enhanced profits for business
Retain more customers
Target marketing communications

Question 29

Market Mapping

Answer 29

Grid that measures two different aspects of brand or businesses within a market