1.1 Meeting Customer Needs

Question 1

Niche and mass markets definitions and +-

Answer 1

Niche- business targets small segment on a large market, marketing targets specific needs, usually lower volume therefore higher prices.
Mass- business sells into largest part of market , marketing aims at whole market not a specific customer trying to have a universal appeal,general products with hope to create generic brands( brands associated with products where the brand name is treated as if a product - Bacardi ‘white rum’ coke ‘ cola
+ niche= less competition, can charge higher price
Build brand loyalty, price inelastic as not many competitors.
- changes in taste or fashion can quickly affect market
-lacks economy of scale (many products)

+economies of scale , but in bulk lower unit costs.
+more brand awareness.
-high levels of competition, price elastic market usually due to so many competitors is price changes customers will go to an alternative subsitute good.
-diseconomies of scale, communication probs.

Question 2

Dynamic markets

Answer 2

Supply, demand and prices are constantly Changing in markets and can be impacted by
technology/innovation e.g camera market disturbed by new tech (iphone)
Trends- Heinz saw growing sales for chilli sauce so introduced sweet chilli ketchup.

Question 3

Risk and uncertainty

Answer 3

R- the possibility things will go wrong e.gmaking an investment
U- the unpredictable uncontrollable events e.g sales success after launch of new product.

Question 4

Market research

Answer 4

Can provide insights like dimensions of market,competitor strategies (ups), need and wants of customers, market segments.

Question 5

Product orientation and market orientation

Answer 5

P- business develops products based on what it is good at doing.
M- business responds to what customers want and need.

Question 6

Primary and secondary research +-

Answer 6

Primary- data collected first hand (surveys,observations)
Secondary - data that already exists (market reports,Google)

P+, kept private not public -, time consuming.
S+, quick to access and use-, can becoming quickly out of date.

Question 7

Quantitive and qualities data +-

Answer 7

Quantitive, numerical and data,+easy to compare and read,-doesn’t explain reasons behind.

Qualitative , based on opinions ,+ can highlight issues (why customers don’t buy),- based around opinions maybe not representative.

Question 8

Sampling in market research

Answer 8

Gathering data from a sample of respondents, should be representative of population.
+ even a small sample size if representative can be useful .
- risk of bias in research questions.

Random- everyone chosen entirely by chance.
Quota- segmented into sub groups, then a percentage is used to represent the sub groups.
Stratified- subgroups then randomly selected.

Question 9

Market segmentation +-

Answer 9

Dividing market into parts of consumers with similar customer needs.
1.demographics (age,gender,ethnicity)
2.geographic
(Populations and where they live)
3.behavioural
(Frequency of purchases and reasons for purchasing.)
4.income

+advertising can be targeted at specific segments making spending more effective.
-markets are increasingly dynamic, so are the segments

Question 10

Market positioning on a market map +-

Answer 10

E.g High quality,low quality, high price, low price

+ helps to spot gaps in market
+ analyse competitors
- just because there’s a gap doesn’t mean there’s a demand
- no guarantee of success

Question 11

Product differentiation

Answer 11

A feature of a business that allows it to perform better than others in the market.Effective differentiation allows a business to- source a competitive advantage, strengthen customer loyalty, add more value
Porter generic strategies- a firm in a mass or niche market can have a competitive advantage if it’s either lowest cost or highest differentiated.

Question 12

Market size and market share calc

Answer 12

MS- number of units sold x price
MS- sales of one firm / total market sales x100

Question 13

Market growth

Answer 13

New - old / old x100

Question 14

Spectrum of competition

Answer 14

Monopoly/oligopoly (little or no competition) one of few firms dominate.
Perfect / monopolistic competition (high degree of competition)

Question 15

Porters 5 forces of competitive position

Answer 15

New competitors
Buying power of customers
Selling power of suppliers
Threat of substitutes
Competitive rivalry