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BM Business theme 1 > 1.1 meeting customer needs > Flashcards

1.1 meeting customer needs Flashcards

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1
Q

What is a market?

A

A market is a place where buyers and sellers can meet.

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2
Q

What is the aim of marketing?

A

To help identify, anticipate and satisfy customer needs and wants whilst being profitable.

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3
Q

What is market research?

A

The process of systematically gathering data from consumers which can be used to influence business decisions.

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4
Q

What is a mass market?

A

Where a business sells into the largest part of the market, where there is large amounts of competition

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5
Q

What is a niche market?

A

A smaller segment of a larger market, where customers have specific wants and needs.

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6
Q

What are characteristics of a mass market?

A

Less unique products

Low average costs (economies of scale)

Lower profit margins due to lower prices

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7
Q

What are the characteristics of a niche market?

A

More specialised and unique products

High average costs (Do not benefit from Economies of scale)

Larger profit margins

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8
Q

How is market size measured

A

Sales volume- number of products sold

Sales value- price*quantity sold

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9
Q

What is market share

A

Proportion of the total sales of a product/service compared to the market as a whole.

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10
Q

What is the formula for Market share

A

Sales of a business / Total sales in the market *100

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11
Q

What is a brand?

A

A name, image or logo which helps products/ services stand out from its competitors.

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12
Q

What are characteristics of brands?

A

Unique and protected by law

Brands add value

Brands influence the position of the business within its market

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13
Q

What is a dynamic market?

A

A market that is constantly and rapidly changing

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14
Q

What is online retailing?

A

selling products via the internet

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15
Q

Advantages of online retailing?

A

Larger amount of potential consumers

Longer trading hours

Lower costs (lower rent)

Business can collect data by tracking consumer behaviour. (primary market research)

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16
Q

Disadvantages of online retailing

A

High costs for website development and maintenance

Dominated by larger business

Lack of personal contact with consumers

May have difficulty keeping a high level of customer service

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17
Q

How/why do markets change?

A

Changing consumer tastes and preferences

The amount of competition

Changing demographics

Changing legislation

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18
Q

What is product innovation?

A

Adaptation or improvement of existing products

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19
Q

What is market growth?

A

measurement of change in the entire market expressed as a percentage of the original size.

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20
Q

Factors affecting market growth

A

Increasing population

Increasing incomes

Changing tastes and preferences

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21
Q

How may businesses adapt to change?

A

Create flexible business structures

Meet customer needs

Invest in staff training, new products and processses

Innovate to gain the first mover advanatge

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22
Q

What is the first mover advantage?

A

Competitive advantage gained by being the first business to introduce a new product/service to the market.

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23
Q

what is direct competition?

A

The business is targeting customers with the same product as the competitord

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24
Q

What is indirect competition

A

Firms sell different products but compete with each other for the disposable income of consumers. e.g. cinema and theatre companies

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25
How does competition benefit the consumer?
Businesses offer lower prices Businesses produce better quality products Business provide better customer service
26
Difference between a risk and uncertainties
Risk are able to be calculated and prepared for. Whereas, uncertainties cannot as they are unexpected.
27
What is a risk?
Potential threat to a business success
28
What is risk maangement?
The process of identifying and preparing for potential threats to business success.
29
What are uncertainties?
Outcomes are difficult to predict
30
Examples of risks
Technical failures Cyber security threats Loss of key staff Currency fluctuations
31
Examples of uncertainty
Will the economy go into recession? Will energy prices continue to rise? What will happen to interest rates?
32
What is product orientation
An approach to marketing that focuses on the characteristics of the product rather than the needs of the consumer.
33
Tools of product orientation
Product research Product testing product focus
34
What is market orientation?
Approach to marketing that focuses on the needs of consumers and uses this information to design products that meet customer needs
35
Tools of market orientation
Market research Market testing Customer focus
36
What is market research
The objective collection, compilation and analysis of information about a market
37
Market research can be quantitative and qualitative. True or False
True
38
What is qualitative data?
Data based on thoughts and opinions
39
What is quantitative data?
Numerical data
40
What is primary market research
Process of gathering information directly from consumers in the target market.
41
Methods of primary market research
surveys observation Interviews Test marketing -free samples Focus groups
42
Advantages of primary market research?
Focuses on the specific needs of the business Businesses can get in depth information More up to date and can be used to ask specific relevant questions
43
Disadvantages of market research?
Sample size may be unrepresentative of all customers Bias- people interviewing may guide respondents to an answer Expensive and time consuming
44
What is secondary market research?
The collection, compilation and analysis of data that already exists
45
methods of secondary market research
Market reports government reports
46
Advantages of secondary market research
Information is already available and so is quicker to collect (than market research) Information is often free or cheaper Suitable for small businesses that cant spend large amounts on marketing
47
Disadvantages of secondary market research
May lack relevance or may even be incorrect Information may be out of date Can be expensive to purchase market specific data.
48
The use of ICT to support market research
Company websites Databases Social networking/media
49
How do company websites help market research?
Allow businesses to collect primary data cheaply through tracking consumer searches
50
How do databases support market research?
Uses to store large amounts of customer information for example customer emails which can be used to send surveys to customers later on
51
How does social networking/media help market research?
Able to gather information about consumers via social media such as twitter and tiktok. Can also be used to run quick polls with followers.
52
What is market segmentation
the process in which a single market is divided into sub markets. e,g. healthy crisps, party crisps and value crisps
53
Advantages of market segmentation
Recognises that consumers are not all identical Products and marketing can be altered to meet different needs of different groups of consumers Less expensive and wasteful
54
Disadvantages of market segmentation
May be difficult to identify a segment Requires more detailed market research A segment may be too small and unprofitable
55
What is market positioning
The process a business goes through when launching a new product or service
56
Definition of market mapping
A tool for identifying the position of a product within a market
57
What is a market map
A two dimensional diagram that shows the attributes or characteristics of a product in comparison to rivals products only two criteria can be chosen. e.g. quality and price
58
Advantages of market mapping
Market gaps can be identified comparisons can be made between a businesses products and its rivals
59
Disadvantages of market mapping
A gap in the market may exist because it is not profitable to fill May require primary market research which is expensive only two criteria can be chosen
60
What is competitive advantage
Refers to the features of a business and its products that are perceived as superior to its rivals by customers.
61
What does distinctive mean
Means that it is different from the competitors
62
How can a business develop a competitive advantage
Faster delivery Better customer service Cheaper prices Better designs More ethical Better brand image and reputation
63
What is product differentiation
An attempt by a business to distinguish its products from those of competitors
64
What is the point of product differentiation
It can help you gain a competitive advantage Unique selling point
65
What is the definition of adding value
The difference between the price that is charged to the customer and the cost of inputs required to create the product or service
66
What are ways to add value?
Marketing and branding Product differentiation Options for customisation Convenience of the product e.g. how easy is it to order Design Functions and features

BM Business theme 1 (5 decks)

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