3.1 - marketing, competition and the customer

Question 1

what is marketing?

Answer 1

identifying customer wants and satisfying them profitability

Question 2

what is the role of marketing?

Answer 2

1. identifying customer needs e.g. what products they want and what price they are willing to pay and where they want to buy the goods ​
2. satisfy customer needs- This will allow them to gain more customers and make a profit ​
3. maintain Customer loyalty- This will allow them to have good relationship with customers so they will return, increasing sales​
4. building customer relationships- from this the business can gain information about customers to meet their ever-changing customer needs

Question 3

why might customer spendingpatterns change?

Answer 3

• customer tastes and fashions change e.g., clothing ​
• changes in technology – more demand for technological products e.g. iPhones/iPads ​
• changes in incomes- If an economy has high unemployment then many consumers will buy cheaper products.​
• ageing population- There is now a greater % of older people in many countries – This is increasing demand of many products e.g. assisted living, anti aging creams

Question 4

what is the importance of changing consumer needs?

Answer 4

if business fail to response to customer needs, then sales will likely fall and so will profits

Question 5

why have some markets become more competitive?

Answer 5

• globalisation - businesses can now sell to customers in any country - more competition for domestic firms ​
• transportation - it’s easier for firms to ship products to other countries, increasing competition ​
• improved technology has led to E-commerce, increasing competition as people can now buy from other countries online

Question 6

how can businesses respond to changing spending patterns and increased competition?

Answer 6

• maintain good customer relationships e.g. by effective marketing (market research and advertising) ​
• keep improving their existing products ​
• bring out new products to keep customers interested ​
• keep costs low - this will allow them to have a lower price and so be more competitive

Question 7

what is the niche market?

Answer 7

a small usually specialised segment of a much larger market. e.g. hiking boots, or a wedding dress

Question 8

what is the mass market?

Answer 8

where the products are designed for a large number of customers e.g. standardised products e.g. coca cola/washing powder

Question 9

advantages and disadvantages of niche marketing

Answer 9

• less competition
• builds up specialist skill and knowledge - market expertise - customers are willing to pay higher prices
• customers are often more loyal (customer loyalty)
• lack of “economies of scale”
• risk of over-dependence on a single product or market
• may attract competition if successful

Question 10

advantages and disadvantages of mass marketing

Answer 10

• appeals to more people therefore more customers/sales
• usually have higher production output and capacity (economies of scale)
• high number of competitors
• products/service may not meet specific needs of (potential) customers

Question 11

what is market segmentation?

Answer 11

dividing a market into specific groups of buyers of different demographics/needs who might require separate products

Question 12

what groups can a market be segmented into?

Answer 12

age, gender, socio-economic group (income), location, lifestyle

Question 13

benefits of market segmentation

Answer 13

• identifies opportunities for new product development
• less likely to waste money on marketing to the wrong audience
• customer satisfaction resulting in increased profits