Unit 3 Flashcards
(38 cards)
Whast is a Market?
Market - The Market is all customers and consumers who are interested in buying a product and have the ifnancial resources to do so
Why does the Market for a business change overtime?/ what affects the the amount of money customers spend on buying goods and services?
Consumer Marekts (for individual consumers)
Indstrial Marekts (for businesses)
Price of Products - Price of Products change overtime, Consumers will buy the product with the lower price (nike)
Changes in INcome - Consumers income is changing for the wrost so they will end up spending money on needs instead of luxurious wants (housing prices)
Changes in Population - When the country’s population grows in size, the more people the more business sales (london)
Changes in Fashon - The normality of fashion changes, people want what’s hot and don’t want outdated brands that no one wears anymore (crocs)
More Competition - Some Business get lost in the erruption of the new brands and fashion and get left behind, people want the cooler brands that have risen up (hmv)
What is a Consumer Base?
the group of people a business sells its product to
Target Market?
individuals identified by a business as the customers or cunsumers of its products. (when a business decides to produce products for a particular grop of consumers
What are Consumer Markets?
Products sold to the final consumer: eg televisions and cars
What are Industrial Markets?
productsd sold to other businesses for use in the production process: eg machinery and equipment
What is Market Segmentation?
The process of dividing a market of potential customers into groups, or segments, based on different characteristics
How are the different ways markets are segmented in Market Segmentation?
There are many ways markets are segmented:
Socio - economic groups (income) - the money that the customer has
Demographics (age, gender, ethnicity)
Geographic - recognises the consumers in one location may have different needs from cunsumers in another location
Phycographics (lifestyles, beliefs, attitudes)
What is a Market SEGMENT?
A part of the whole market in which consumers have specific characteristics
What are Benefits to Market Segmentation?
Better matching of product to specific customer needs, likely to increase sales
Helps with new product development - focused on needs of customers in the segment
Small Firms who wouldent be abnle to co operate in a whole market then hav an option to make it easier and operare in 1 or 2 segments
Marketing strategies can be better targetted at each segment. This reduces sxarce rescources. For example, advertising can be directed at the target market and not wasted on trying to sell the product to the whole market
What is Free Trade?
no barriers exist that might prevent trade between different countries
What is Niche Marketing?
Developing products for a small segment of the Market
OPPOSITE OF MASS MARKETIG
What is Mass Marketing?
Selling the same prodct to the whole Market
OPPOSITE OF NICHE MARKETING
What are Benefits and Limitations of Niche Marketing?
B: Less copmpetition in the small firms which means that you do not have to waste scarce rescources responding to competitor actions
Consumers will usualy pay more for an exclusive product which gives firms the oppertunity to charge high Prices
L: Small Chanfges in Consumer Spending Patterns could significantly effect the firms since there are such less customers
What are Benefits and Limitations of Mass Marketing?
B: Much Larger Market Has the Potential for high sales and profits
Changes in consumer patterns don’t have a massive effect on abusiness in a mass market which reduces the risk for them
L: Many more competitors which lowers price
Consumers nowerdays are often looking for something more different and exclusive and don’t want the same product mass marketing
What is a Market oriented Business?
Businesses that Conduct Market Research to find out exactly what consumers want, and design a product to meet their requirements
(Describes most businesses including McDonald’s, Nike, Innocent)
What is a Product Oriented Business?
Businesses that Concentrate on developing a really good product, then persuading consumers to buy it afterwards
(Sony, Walkman, Apple Iphone, Range Rover but these businesses do still use market research)
What is Primary Research and Secondary Research?
Primary Research - The gathering of New Information, specific to the needs of the business eg focus groups and test markets
Secondary Research - The use of data that is already in existence eg Commercial Reports and Goverment Data
What is Market Research?
The process of collecting and anyising data about the customers, competitors and market for a product
What are Advantages and Disadvantages of Primary Research?
Advantages of Primary Research: New ideas that the company may not have seen before
These ideas are not outdated
Disadvantages of Primary Research:
People may be rushing this survey / focus groups to get to the reward therefore not producing good and helpful awnsers
What are Advantages and Disadvantages of Secondary Research?
Advantages of Secondary Research: Could solidify the message / point by using better language or simplify the message so that people can understand this easier.
Easier for the business to find instead of hosting focus groups or spending money on polls, much easier to find.
Disadvantages of Secondary Resarch: Could be missing vital information that was said when the information first came around.
Could be outdated opinions / information
What is the Product Life Cycle?
The life of a Product is the period of time during which it appeals to customers.
What are the different stages of a Product Life Cycle?
Introduction Stage: The product is introduced in the Market, Sales are Low. Product might be making a loss in this stage
Growth Stage: Product is becoming better known to consumers. Product starts to earn profit during this stage.
Maturity Stage: Sales are no lonjger growing but are no longer falling
Decline Stage: Profits are falling and the p[roduct becomes unprofitable
How does Brand Image increase a Business’es sales and revenue?
Consumers will recognise the product more eassily when looking at simmilar products
Product can be priced as higher than not well known brands
Easier to launch new products because Consumers already know and trust the brand
