1.1 Meeting Customer Needs

Question 1

What is a market?

Answer 1

A place where buyers and sellers come together.

Question 2

What is a mass market?

Answer 2

A market where products are aimed at a broad range of consumers.

Question 3

What is a niche market?

Answer 3

A market where products are aimed at a subset of the larger market.

Question 4

What are the characteristics of a mass market?

Answer 4

1)products are less unique
2)lower average cost(EOS)
3)greater affordability
4)lower profit margins

Question 5

What are the characteristics of a niche market?

Answer 5

1) products are more specialised
2)high average cost
3)lower sales volumes
4)higher profit margin

Question 6

What is market share?

Answer 6

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

Question 7

What is the formula for market share?

Answer 7

Sales of a business/total sales in the market x100

Question 8

What is a dynamic market?

Answer 8

A dynamic market is a market that is subject to rapid or continuous change.

Question 9

4 areas to consider when examining dynamic markets?

Answer 9

1)Online retailing
2)How markets change
3)innovation and market growth
4)Adapting to change

Question 10

What is direct competition?

Answer 10

Direct competition occurs when the business is targeting customers with the same product as a competitor.

Question 11

What is indirect competition?

Answer 11

Indirect competition occurs when firms sell different products but compete with each other for the customers disposable income.

Question 12

What is risk within a business?

Answer 12

Risk is the potential threat to business success.

Question 13

What is uncertainty within a business?

Answer 13

Uncertainty is when outcomes are difficult to predict.

Question 14

What is product orientation?

Answer 14

An approach to marketing that focuses on the characteristics of the product rather than the needs of the customer.

Question 15

What is market orientation?

Answer 15

An approach to marketing that focuses on the needs of customers and uses this information to design products that meet customer needs.

Question 16

Reasons for market research being carried out?

Answer 16

1)reduce risk
2)understand consumer behaviour
3)identify consumer demand
3)identify what consumers are prepared to pay
4)identify competitors

Question 17

What is primary research?

Answer 17

The process of gathering information directly from consumers.

Question 18

What are the 5 primary research methods

Answer 18

1)surveys
2)Observation
3)interviews
4)test marketing
5)focus groups

Question 19

What is secondary market research?

Answer 19

Secondary research is the collection and analysis of data that already exists.

Question 20

What is market segmentation?

Answer 20

The process in which a single market is divided into submarkets or segments.

Question 21

Advantages of primary research?

Answer 21

1)focused on the needs of the business
2)can get more in depth information
3)more up to date information

Question 22

Disadvantages of primary research

Answer 22

1)the sample size may be to small
2)researchers may be bias
3)expensive and time consuming

Question 23

Advantages of secondary research?

Answer 23

1)information is quicker to gather
2)cheaper to collect

Question 24

Disadvantages of secondary research

Answer 24

1)may lack relevance
2)information may be out of date
3) information may be bias

Question 25

What is market positioning?

Answer 25

The process a business goes through when launching a new product or service.

Question 26

What is market mapping?

Answer 26

Market mapping is a tool for identifying the position of a product within a market.

Question 27

What is the usefulness of market mapping?

Answer 27

1)market gaps can be identified 2)easy to construct 3)comparisons can be made with competitors

Question 28

What are the limitations of market mapping?

Answer 28

1)can be expensive 2)only two criteria’s can be chosen 3)markets are dynamic so they become outdated quickly. 4)a gap may exist, however it is not profitable to fill.

Question 29

What is a competitive advantage?

Answer 29

The features of a business and its products that are perceived as superior to its rivals by customers.

Question 30

What are the 8 methods of adding value?

Answer 30

1)marketing and branding 2)product differentiation 3)design 4)convenience 5)customer service 6)customisation 7)packaging 8)functions and features

Question 31

Ways a firm can gain a competitive advantage?

Answer 31

1)innovation, reputation 2)building strong relationships with stakeholders 3)adding value 4)differentiation 5)market segmentation 6)price leadership

Question 32

What is the purpose of product differentiation?

Answer 32

To distinguish your products/service from those of competitors.