Marketing, competition, and the customer

Question 1

What is the role of marketing?

Answer 1

• Identify customer needs
• Satisfy customer needs
• Maintain customer loyalty
• Gain information about customers
• Anticipate changes in customer needs
• If marketing department is successful, it could enable the business to meet some of the business objectives

Question 2

What are the main market changes?

Answer 2

• Consumer fashion and tastes change
• Change in technology
• Change in income
• Demographic changes

Question 3

How can businesses respond to market change?

Answer 3

• Maintain customer relationships
• Improve its existing product

Question 4

What is a mass market?

Answer 4

A mass market is where there is a very large number of sales of a product.

Question 5

What is a niche market?

Answer 5

A niche market is a small, usually specialized, segment of a much larger market.

Question 6

What are the advantages of a mass market?

Answer 6

• Total sales in these markets are very high
• The business can benefit from economies of scale
• Risks can be spread
• Opportunities for growth of the business due to large potential sales

Question 7

What are the disadvantages of a mass market?

Answer 7

• High levels of competition between businesses selling similar products
• High costs of advertising and promotion
• Standardised products or services are produced

Question 8

What are the advantages of a niche market?

Answer 8

• Small businesses may be able to sell successfully in niche markets
• The needs of consumers can be more closely focused on and therefore targeted.

Question 9

What are the disadvantages of a niche market?

Answer 9

• Niche markets are usually relatively small and therefore have limited sales
• Usually, businesses in a niche market specialise in just one product. So if the product is no longer in demand the business will fail.

Question 10

What is market segmentation?

Answer 10

Market segmentation is when a market is broken down into sub-groups which share similar characteristics.

Question 11

What are some ways to segment a market?

Answer 11

• By socio-economic group
• By age
• By region/location
• By gender
• By use of the product
• By lifestyle

Question 12

What is a market?

Answer 12

A market is the total number of customers and potential customers, as well as the sellers for that particular good or service

Question 13

What is marketing?

Answer 13

Marketing is identifying customer wants and satisfying them profitably.

Question 14

What is a customer?

Answer 14

A customer is a person, business or other organisation which buys goods or services from a business.

Question 15

What is customer loyalty?

Answer 15

Customer loyalty is when existing customers continually buy products from the same business.

Question 16

What are customer relationships?

Answer 16

Customer relationships is communicating with customers to encourage them to become loyal to the business and its products.

Question 17

What is a market share?

Answer 17

A market share is the percentage of total market sales held by one brand or business.

Question 18

What is a consumer?

Answer 18

A consumer buys goods or services for personal use - not to re-sell.