1.1 Meeting Customer Needs Flashcards
(33 cards)
What is a mass market?
The largest part of the market where products are aimed at broad market segments.
Advantages of a mass market
- Lower average costs due to high sales volume
- Wide reach of customers
- Less specific
Disadvantages of mass markets
- May avoid segments
- Less unique
- Lower profit margain
What is a niche market?
A smaller subset of the main market where customers have specific needs
Advantages of a niche market
- Brand loyalty
- Meet customer needs
- Customer retention
Disadvantages of niche marketing
- Limited growth
- Lack of EOS
- Dependancy
What is a dynamic market?
A market that is subject to rapid and continuous change
What is risk?
Where a business can predict the change of an outcome in the future
How to manage risk?
- Business plan
- Market research
- Training
What is uncertainty?
Where a business cannot predict the chance of an outcome
What is competition?
Where multiple companies are rivalry in a market where they’re situated, producing similar goods
What is the impact of more competition?
- Decrease prices
- Increase marketing and quality
What is the impact of less competition
- Increased sales
- Increase prices
- Retained profits
- Pay shareholders
What is product orientation?
An approach to marketing that focuses on the characteristics of a product rather than the needs of the consumer
What is market orientation?
Approach to marketing that focuses on the needs of consumers and tailors products to meet customer needs
What is market research?
Collecting information about a market and consumers needs and wants
What is primary research?
Gathering information first hand and directly from consumers
E.g. focus groups
Advantages of primary research
- In-depth, tailored information
- ‘Trade secret’ and a competitive advantage
Disadvantages of primary research
- Small sample size meaning unreliable
- Hire specialists
- Bias
- Time consuming
What is secondary research?
Gathering data second hand from consumers that already exists
E.g internet
Advantages of secondary research
- Quick to collect
- Easy to access
- Insight to consumer behaviours
Disadvantages of secondary research?
- Research may be broad and out of date
- Rivals have access to the same information
What is a market map?
A tool used to analyse competition in a specific market and to identify gaps in a market
Advantages of market mapping?
- Identify gaps in the market
- Identify saturated areas
