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Business Theme 1 > meeting customer needs > Flashcards

meeting customer needs Flashcards

1
Q

what is niche marketing?

A

where a business targets a smaller segment of a larger market where customers have specific needs and wants

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2
Q

what is mass marketing?

A

where a business sells into the largest part of the market where there are many similar products offered by competitors

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3
Q

4 key features of mass market

A

1- customers form majority of market
2-customers needs and wants are less specific
3-higher production output and potential for economies of scale
4- associated with low-cost operation or market leading brands

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4
Q

4 aims of mass marketing

A

1- create products with universal appeal
2- aim for leadership of the largest market segment
3-build a strong brand that’s associated with product
4-exploit economies of scale to earn high profits

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5
Q

benefits of successful mass marketing?

A

1-widest potential customer base
2-lower risk as it has a large market
3-low unit costs from economies of scale
4-market research costs relatively low

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6
Q

6 advantages of niche marketing

A

-less competition
-clear focus
-builds up specialist skill
-charge higher prices
-profit margins often higher
-loyal customers

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7
Q

4 disadvantages of niche marketing

A

-lack of economies of scale
-risk of over dependence on a single product or market
-likely to attract competition if successful
-vulnerable to market changes

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8
Q

what’s market growth?

A

a key indicator for existing and potential market entrants

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9
Q

what’s market share ?

A

explains how overall market is split between existing competitors
-good indicator of competitive advantage

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10
Q

what’s a dynamic market?

A

-a changing market
-the pace and nature of change varies considerably between markets

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11
Q

what are the key sources of change in markets?

A

-customer tastes and preferences
-impact of technology
-impact of new market entrants

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12
Q

what’s the role of innovation?

A

-puts a new idea / approach into action
-commonly describes as ‘the commercially successful exploitation of ideas’

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13
Q

definition of invention

A

-formulation of new ideas for products or processes

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14
Q

definition of innovation

A

practical application of new inventions into marketable products or services

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15
Q

what are the two types of innovation

A

-product innovation
-process innovation

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16
Q

what is product innovation?

A

launching new or improved products onto the market

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17
Q

what’s process innovation?

A

finding better or more efficient ways to produce existing products or deliver existing services

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18
Q

what are the benefits of process innovation ?

A

-reduced costs
-improved quality
-more responsive customer service
-greater flexibility
-higher profits

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19
Q

benefits of product innovation

A

First move advantage which includes:
-higher prices and profit
-added value
-builds early customer loyalty
-enhanced reputation as an innovative company
-public relations
-increased market share

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20
Q

how does competition affect the market?

A

-battle for market share-battle to gain or protect share and threat to new market entrants
-pricing-price wars which adds competition and stronger competitors often set market price
-battle for competitive advantage-product differentiation-key parts of competition

21
Q

what’s competitive advantage?

A

-the ability of a business to add more value for its customers than it’s rivals and attain a position of relative advantage
-there’s a better advantage if companies offer better value, quality or service

22
Q

what’s risk?

A

-possibility that things will go wrong

23
Q

what’s uncertainty ?

A

the unpredictable and uncontrollable events that affect a business

24
Q

why conduct market research ?

A

-to find out about the market

25
Q

what’s product orientated?

A

-when a company decides not to carry out any market research

26
Q

what’s market orientated?

A

-a product that’s launched after market research
-far more likely to be successful

27
Q

what is primary research?

A

-gathering new information specifically for the purposes identified by the business
-obtained by field research such as interviewing
important for new business as there will be little secondary data for company to utilise

28
Q

disadvantage of primary research?

A

-failure to ask enough people may mean data doesn’t represent views of typical customers
-asking too many people of one group won’t represent the whole market
-poorly designed questionnaires may use suggestive or leading questions which may encourage people to give a particular answer to certain questions

29
Q

what is secondary research?

A

-research that uses information that has already been gathered for another purpose
-eg sales information

30
Q

disadvantage of secondary research?

A

-info may be outdated so could be less accurate than up to date info
-info may not be exactly what’s needed as it was originally collected for another purpose
-may not be reliable

31
Q

benefits of market research?

A

-knowing customer needs - don’t waste money of products that won’t sell
-estimating likely demands- so firms don’t make too many or too few products
-helps entrepreneurs to understand if the market is big enough to make it a success
-finding out about competitors location, products and prices

32
Q

what’s quantitative data?

A

factual, often numerate data that aims to be statistically representative of the whole market

33
Q

what qualitative data?

A

contains opinion and is unlikely to have been gathered on a large enough scale to give statistically reliable data

34
Q

what do customers differ in terms of?

A

-benefits they want
-amount they are able to pay
-media they see
-quantities they buy
-time and place they buy

35
Q

what does market research show us?

A

-dimension of market
-competitor strategies
-needs, wants and expectations of customers and how these are changing
-market segments

36
Q

why is market orientation crucial to marketing success?

A

-markets are much more dynamic
-customers are become more demanding
-barriers to market entry are getting lower

37
Q

positives of quantitive research

A

-data is easy to analyse
-numerical data provides insights into relevant trends
-can be compared with data from other sources

38
Q

negatives of quantitive research

A

-focuses of data rather than explaining why things happen
-doesn’t explain the reasons behind numerical trends
-may lack reliability if sample size and method isn’t valid

39
Q

positives of qualitative data

A

-focuses on understanding customer needs and wants
-can highlight issues that need addressing-tests elements of marketing mix

40
Q

negatives of qualitative data

A

-expensive to collect and analyse
-requires specialist research
-based around opinion
-always a risk the sample is not representative

41
Q

what are focus groups?

A

-form of qualitative research
-groups of people are asked about their perceptions, opinions, beliefs and attitudes towards a product, service, concept or ide

42
Q

what’s sampling in market research?

A

-involves the gathering of data from a sample of respondents, the results should be representative of the population as a whole

43
Q

positives of sampling

A

-small sample size can still provide useful insights
-can reduce risks and costs if used before making marketing decisions
-flexible and relatively quick

44
Q

negatives of sampling

A

the biggest risk is the sample being unrepresentative of the population which leads to incorrect conclusions
-risk of bias in research question
-less useful in market segments when customers tastes and preferences change frequently

45
Q

how is IT used in market research ?

A

-source of primary and secondary research
-software can quickly highlight what customers are saying about the product or brand
-surveys are easy to set up and analyse results
-wide range of powerful software applications to manage social media research and integrate with other business systems

46
Q

what are market maps?

A

-a grid that shows the range of possible positions for two features of a pricy in a market
-may reveal gaps in a market

47
Q

advantages of market maps?

A

-helps spot gaps in market
-useful for analysing competitors

48
Q

disadvantages of market maps?

A

-just because there’s a ‘gap’ doesn’t mean there is demand
-how reliable is the market research?
-subjective

Business Theme 1 (6 decks)

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