Theme 1 - section 1 (meeting customer needs) Flashcards
(46 cards)
What is a mass market
A market aimed at a large group of buyers, Products in this market have a wide rage of appeal and is useful to a variety of people.
Niche market
Market aimed at a specific group of buyers. Product is specialised to meet particular requirements of buyers.
Why might new businesses struggle to survive in a mass market?
Not enough capital generated to meet large scales of volume demanded
Businesses in a niche market can be more……
Risky as they are reaching out to a smaller number and narrower range of customers.
Businesses in niche market will be able to…….
Charge higher prices as they are usually unique so people are willing to pay more money.
Market size = …..
Total value of sales in a given time period
Market share =
(usually shown as a %)
Firms total sales
___________________
Total sales in the market
Firms in mass markets need to make their Brand ……
Distinctive. Firms with a brand that is easily recognisable , allows them to stand out from their customers
Firms in mass markets need to focus more on ….
Branding, as they are selling similar products to its competitors, so it needs to stand out in other ways.
Firms in a niche market need to focus on …….
Meeting customer demands and there is little competition.
Dynamic markets
Markets which change and evolve rapidly, usually due to a change in fashion or advancement in technology.
Examples of dynamic markets……
Mobile phones , fashion ……
Businesses in dynamic markets need to be able too …..
Adapt to meet customer needs
What is online retailing?
selling products via the internet
Benefits to online retailing
- Costs are lower
Not having a physical shop means costs are lower, as there are less staff that need paying, meaning businesses can charge lower prices for their products.
- Wider range of customers
Customers can purchace from anywhere in the world at any time increasing the amount of possible sales.
- customers can compair prices
customers can eaily compair prices to find the lowest price.
Drawbacks of online retailing.
- more competition
customers can eaily shop around, so firms spend time making their shopping website experiance easier, for easier repeate purchase.
- No physical products
some customers like to see physical products, ways to tackle this include free returns and online chat services
- Cyber attacks
firms need to protect customers personal details from cyber criminals and make sure they are protected. Maintaining security is expensive but are cheaper than the potential consequesnses.
Product orientated business
Production and marketing desicions are focused on design, quality and performance of its product, tather than what customers actually want.
What is direct competition ?
when two or more businesses sell similar products that appeal to the same group of customers. For example Tesco and Asda.
What is Indirect competition ?
When two or more businesses sell products that are different, but they are competing for the same customers. For example Indian and Italian take aways.
Effect of competition on product
- Need to make sure product is high quality.
- Needs to be distinctive.
- Lots of innovation needed.
- USP
Effect of competition on promotion
- Lots of investment to get noticed
- Lots of campaigns and advertising
- Branding (celebrity endorsement)
Effect of competition on pricing
- competitive pricing strategy
- Based on competitors prices
- New products might use penetration
pricing.
Effect of competition on place
- need to ensure product / service is easy to access.
- online retailing
- set up apps
Market orientated business
business focuses heavily on selling products that match customer preferences. It invests lots into market research to find out what customers want and are willing to buy. ( low risk)
