Meeting Customer Needs

Question 1

What do businesses do to make money?

Answer 1

Sell their goods and services in markets

Question 2

How were markets historically defined?

Answer 2

Places where buyers and sellers would meet to exchange goods

Question 3

What are some modern methods of trading goods and services?

Answer 3

Telephone, newspapers, mail order, Internet

Question 4

What are consumer goods markets?

Answer 4

Markets where products such as food, cosmetics, and magazines are sold

Question 5

What types of services are included in markets for services?

Answer 5

• Hairdressing
• Auditing

Question 6

What is the housing market?

Answer 6

A market where people buy, sell, and let property

Question 7

What are commodity markets?

Answer 7

Markets where raw materials such as oil, copper, wheat, and coffee are traded

Question 8

What do financial markets trade?

Answer 8

Currencies and financial products

Question 9

What does marketing involve?

Answer 9

• Identifying the needs and wants of consumers
• Designing products that meet these needs
• Understanding the threat posed by competitors
• Telling customers about products
• Charging the right price
• Persuading customers to buy products
• Making products available in convenient locations

Question 10

True or False: Marketing is solely about selling products.

Answer 10

False

Question 11

Fill in the blank: Marketing involves _______ the needs and wants of consumers.

Answer 11

identifying

Question 12

Fill in the blank: The housing market is where people _______ property.

Answer 12

buy, sell and let

Question 13

What is a mass market?

Answer 13

A mass market is when a business sells the same products to all consumers and markets them in the same way.

Question 14

Give examples of products sold in a mass market.

Answer 14

• Fast-moving consumer goods
• Crisps
• Breakfast cereals
• Computer software
• Soft drinks

Question 15

What is the potential customer base size in mass markets?

Answer 15

Possibly billions if products are sold globally.

Question 16

What is economies of scale?

Answer 16

Producing large quantities at a lower unit cost.

Question 17

What are the potential benefits of operating in a mass market?

Answer 17

• Higher sales
• Higher profits

Question 18

What challenge do businesses face in mass markets?

Answer 18

High competition may lead to increased marketing spending.

Question 19

What was Coca-Cola®’s advertising budget in 2016?

Answer 19

Around US$4000 million.

Question 20

Define a niche market.

Answer 20

A niche market is a small market segment that has sometimes gone ‘untouched’ by larger businesses.

Question 21

How does niche marketing differ from mass marketing?

Answer 21

Niche marketing involves selling to a small customer group with specific needs.

Question 22

What advantages do small firms have in niche markets?

Answer 22

• They can survive by supplying niche markets
• They may avoid competition
• Easier to focus on customer needs

Question 23

What is an example of a business that targets niche markets?

Answer 23

Zumiez, which sells products related to surfing, skateboarding, and snowboarding.

Question 24

What is a potential risk for businesses in niche markets?

Answer 24

If a large business enters the niche market, they may easily overrun smaller rivals.

Question 25

Why might businesses relying on a single niche market be vulnerable?

Answer 25

They are not spreading their risk and may collapse if they lose grip in their chosen market.

Question 26

How can the size of a market be estimated or calculated?

Answer 26

By the total sales of all businesses in the market.

Question 27

What is market size usually estimated in?

Answer 27

Value and Volume.

Question 28

What does 'Value' refer to in market size estimation?

Answer 28

The total amount spent by customers buying products.

Question 29

What was the estimated value of the global fast food market in 2014?

Answer 29

Approximately US$495,000 million.

Question 30

What was the expected value of the global fast food market by 2020?

Answer 30

Approximately US$645,000 million.

Question 31

What does 'Volume' refer to in market size estimation?

Answer 31

The physical quantity of products that are produced and sold.

Question 32

How is the market size for domestic air travel in China measured?

Answer 32

By the number of passengers carried per year.

Question 33

What was the number of passengers carried for domestic air travel in China in 2016?

Answer 33

487,960 million.

Question 34

How are estimates of volume often based in service markets?

Answer 34

On the number or percentage of users, subscribers, or viewers.

Question 35

Give examples of service markets where volume is estimated based on users.

Answer 35

* Number of mobile phone users * Number of television viewers * Percentage of households with digital television.

Question 36

True or False: Different markets are likely to differ in size.

Answer 36

True.

Question 37

Which market is likely to be smaller in size: the sale of savoury snacks or the sales of footwear in a year?

Answer 37

The sale of savoury snacks.

Question 38

What is market share?

Answer 38

The proportion of a particular market held by a business, product, or brand expressed as a percentage.

Question 39

How is market share calculated?

Answer 39

Sales of a business / Total sales in the market × 100%

Question 40

Why is measuring market share important?

Answer 40

It indicates market leadership, influences company strategies, and reflects business success or failure.

Question 41

A business with a small market share may set a target of increasing its share by _______.

Answer 41

5 per cent

Question 42

True or False: Market share can indicate whether a business is a market leader.

Answer 42

True

Question 43

What might influence other companies in the market based on market share?

Answer 43

The presence of a market leader.

Question 44

What might a business with a small market share do in response to its position?

Answer 44

Set targets to increase its market share.

Question 45

What does a high market share indicate about a business's strategy?

Answer 45

It may indicate success in maintaining or growing its market position.

Question 46

What is the primary purpose of giving products a brand name?

Answer 46

To distinguish them from other products in the market

Question 47

Why is branding particularly important in mass markets?

Answer 47

Because many products are competing for a share of the market

Question 48

Name three examples of common brand names.

Answer 48

* Google® * BBC * Toyota * Nike® * Apple®

Question 49

What are two goals of branding?

Answer 49

* Differentiate the product from those of rivals * Create customer loyalty

Question 50

Fill in the blank: Branding helps with _______ recognition.

Answer 50

product

Question 51

What can strong branding enable a company to do?

Answer 51

Charge a premium price

Question 52

What is one way branding can influence customer perception?

Answer 52

Develop an image

Question 53

True or False: Branding is only relevant to luxury products.

Answer 53

False

Question 54

What might branding help to establish between a company and its customers?

Answer 54

Customer loyalty

Question 55

List two functions of branding.

Answer 55

* Help product recognition * Charge a premium price