4.1 - Introduction to marketing

Question 1

Needs

Answer 1

Essentials that all humans must have to survive
* food, shelter, water and warmth

Question 2

Wants

Answer 2

Human desires (i.e. things that people would like to have)
* humans have infinite of them

Question 3

4 considerations of marketing

Answer 3

• Identifying the needs and wants of customers.
• Anticipating and predicting what customers want in the future
• Considering the price, product, place and promotion
• Earning a profit

Question 4

Marketing

Answer 4

The management process involved in identifying, anticipating and satisfying consumer requirements profitably

Question 5

Market orientation

Answer 5

Look to the market to see what consumers need and want (outward looking)
* produce products to fulfill those needs and wants

Question 6

Product orientation

Answer 6

Look at what they can make instead of making products they already sells (inward looking)
* focus on making a product that they hope will be demanded by the market

Question 7

Advantages of market oriented firms (2)

Answer 7

• Greater flexibility: able to respond quickly to changes in the market because of its use of market information
• Lower risk: firms can be confident their products will sell as they are tailored to meet the needs and wants of consumers

Question 8

Disadvantages of market oriented firms (2)

Answer 8

• Market research is needed: find out what consumers want - can be very expensive
• No guarantee this approach will work: due to the dynamic nature of the external environment

Question 9

Advantages of product oriented firms (2)

Answer 9

• quality can be assured
• more control over operations

Question 10

Disadvantages of product oriented firms (3)

Answer 10

• needs of market are generally ignored
• high risk strategy with high failure rate
• high research and development costs

Question 11

Market share formula

Answer 11

(firm’s sale revenue / industry sales revenue) x 100

Question 12

Market share

Answer 12

An organisation’s share of the total value of sales within a specific industry

Question 13

Benefits of firms with high market share (3)

Answer 13

• status
• price setting abilities
• less threats by competitions

Question 14

Ways to increase market share (name 3)

Answer 14

• brand promotion
• product development
• motivating and training workforce
• establishing intellectual property rights
• using more efficient channels of distribution

Question 15

Market growth

Answer 15

The rate at which the size of a market is increasing

Question 16

Market growth formula

Answer 16

((current market size - original market size)) / original market size) x 100

Question 17

Market leadership

Answer 17

The position of the business having the largest market share in a given market

Question 18

Benefits of being market leader (name 3)

Answer 18

• premium pricing
• economies of scale
• longer product life cycles
• favorable distribution terms
• greater publicity and brand exposure
• easier to attract and recruit qualified workers