Theme 1 Meeting Customer Needs

Question 1

What’s a Market?

Answer 1

Buyers/sellers trade a particular type of product in a particular place, businesses that sell/buy to each other.

Question 2

What’s a Mass market?

Answer 2

Aimed at a large group, wide appeal and useful to most of the population like Colgate toothpaste.

Question 3

What’s a Niche market?

Answer 3

Aimed at a specific group of buyers, specialised to meet requirements for buyers like Sensodyne toothpaste.

Question 4

What’s Market size?

Answer 4

Royal value of sales in a market over a certain time period (year) or total number of consumers in a market.

Question 5

What’s Market share?

Answer 5

Proportion of a total market the business holds, dividing sales in a time period by total sales in total market.

Question 6

What are Dynamic markets?

Answer 6

Change and evolve rapidly consumer preferences in fashion or advances in technology.Also, shopping online more.

Question 7

Has Online retailing changed how markets operate?

Answer 7

Growth of online retailing has a negative impact on shop-front retailers on high street, closed down.

Question 8

Benefits of online retailing

Answer 8

Business costs are lower, don’t need a physical shop or hire many staff. Consumers compare prices between firms.

Question 9

Drawbacks of online retailing

Answer 9

Making sure personal details are protected by cyber criminals, not processing fraudulent activity, expensive.

Question 10

Direct competition

Answer 10

Two or more businesses sell similar products that appeal to same group of customers.Tesco,Asda Sainsbury’s sell similar food and household products.

Question 11

Indirect competition

Answer 11

Two or more businesses sell different products, competing for same customers, Indian takeaway against a Chinese takeaway.

Question 12

Marketing mix

Answer 12

Product-market has similar products so need better quality to stand out.
promotion- get products noticed,branding, celebrity endorsement .

Question 13

Marketing mix

Answer 13

pricing-competitive pricing, price based on competitors. Penetration pricing, set low prices
Place-easy for customers to access, may sell online

Question 14

Competition affects nature of ownership

Answer 14

New and smaller firms struggle to survive, need investors to help raise more funds.

Question 15

Franchise

Answer 15

Agreement that allows a business to use another businesses idea, for fee.

Question 16

Risk

Answer 16

Probabilities of different outcomes, need to consider negative outcomes.

Question 17

Uncertainties

Answer 17

Unexpected events, don’t know what could happen, external things the business can’t control, bad weather.

Question 18

Market research

Answer 18

Before launching a new product, help prevent terrible errors, reduce risk in decisions.

Question 19

Product orientation

Answer 19

Focuses on design, quality or performance. Use technology to develop new products and functions.

Question 20

Market orientation

Answer 20

Selling products that’ll match customer preferences. Tailored to customers, expensive.

Question 21

Primary market research

Answer 21

Gathers new data (someone on their behalf)

Question 22

Secondary market research

Answer 22

Data that’s already available

Question 23

Social networking

Answer 23

Internet-based to connect with customers that have a certain interest.

Question 24

Segmentation

Answer 24

Dividing a market into groups based off characteristics, buyers age, income, hobbies

Question 25

Demographic segments

Answer 25

Age,gender,socio-economic class

Question 26

Geographic segments

Answer 26

Neighbourhood, city, county, country or region. Range of lifestyles

Question 27

Income segments

Answer 27

Chanel make-up aimed at high income, Superdrug low income.

Question 28

Behavioural segments

Answer 28

High protein aimed at sporty/gym people.

Question 29

Market map

Answer 29

High price Low quality High quality Low price

Question 30

Market map information

Answer 30

Reveals gaps in market, demand for a product, competitors and declining product

Question 31

Competitive advantage

Answer 31

Allows firms to generate more sales/ more portable than rivals, be unique.

Question 32

Competitive advantage sales and profit. (1)

Answer 32

Lower costs, similar product as rivals at a lower price for more sales. Product innovation, first in the market, new/unique product. Advertising/marketing, more advertisements more consumers attracted.

Question 33

Competitive advantage sales and profit. (2)

Answer 33

Reliability and quality- consumers more willing to pay more for better quality, helps enable high prices and reputation. Good customer service- polite,knowledgable staff make repeat purchases. Convenience- next day delivery attract consumers

Question 34

Competitive advantage adding value and formula

Answer 34

Increasing difference between cost of making product and price customer pays. Added value=price product is sold- cost of making product.