Unit 3.1 Marketing, Competition and the Customer Flashcards
(21 cards)
Marketing definition
- The process of identifying, anticipating and satisfying customer requirements
Role of Marketing (4)
- Identify customer needs (market research)
- Satisfy customer needs (producing and selling goods)
- Maintaining customer loyalty (consistent quality)
- Building customer relationships (methods encouraging customers to buy from them)
Objectives of Marketing (4)
- Increase sales revenue
- To improve and maintain image of the product or business
- Increase market share
- To target a new market
Why consumer spending patterns change
- Change in trends or fashion
- Change in tech
- Change in income
- National or global events
Importance of changing to fit customer needs (4)
- to stay ahead of competitors
- stay profitable
- firm will fail to survive because customers will buy from other businesses
- a growth opportunity to build customer loyalty and stay competitive
Why have some markets become more competitive? (3)
- Globalization–> sold everywhere more competitors
- Improvements in transport–> easier and cheaper to distribute and sell
- E-Commerce–> Customers can buy from the internet from anywhere in the world
How can a business respond to changing spending patterns (4)
- Maintaining good customer relationships–>ensuring customers continue to buy
- Keep improving existing products so sales volume is maintained
- Introduce new products–> keep interest
- Keep costs low–> maintain profitability
Market Definition
Anywhere where buyers and sellers come together to transact with each other
Mass market
market aimed to the general population
Niche market
section of the main market addressing special needs
Mass Market Advantages
- large scale production means lower average costs
- large volume sales means higher revenue
- High revenue can be pumped into R&D
- Mass marketing is straightforward as it is equally target to everyone
Mass Market Disadvantages
- High levels of competition with similar products
- Need to differentiate through marketing is expensive
- High volume of productions means not flexible to demand changes
Niche market Advantages (4)
- Less competition
- Can charge premium prices
- Easier to target customers
- Small scale production is flexible
Niche market Disadvantages (2)
- risky and demand may not be constant
- higher unit costs so NO economies of scale
Market Segmentation Definition
The process by which a market is divided into distinct subsets of customers with similar needs and characteristics
Geographic segmentation
Dividing the market into different geographical units such as nations, religion, states pr cities etc.
Demographic Segementation (based on characteristics)
Divided based on variables e.g. age, gender, family size, income, occupation etc.
Psychographic Segmentation
Divided on social class, lifestyle or personality traits
Behavioral Segmentation
Divided on their attitudes, knowledge, uses or responses to a product
Market Segmentation Advantages (3)
- Allows a business to identify consumer needs and wants which aren’t currently met
- Increased sales since products are produced for a specific group
- Money and time is not wasted in trying to sell products to the whole market
Market Segmentation Disadvantages
- ## Costly and extensive market research needed
