1.1 Meeting customer needs
- Created by: AmyBennet
- Created on: 27-03-17 01:43
View mindmap
- 1.1 Meeting customer needs
- 1.1.1 The Market
- Mass markets and niche markets
- Mass markets
- A mass market is where a business sells to the largest part of the market, where there are many similar products on offer
- Advantages of a mass market
- Economies of scale
- Appeals to more people so less risky
- Customer needs and wants are less specific
- Likely to promote more widely
- Disadvantages of a mass market
- Lots of competition
- Can't charge very high prices as they have to remain competitive
- Need to sell more due to narrower profit margins
- Hard to differentiate
- Niche markets
- Where a business targets a smaller segment of a larger market where customers have specific wants and needs
- Advantages of a niche market
- Less competition
- Clear focus
- Builds market expertise
- Can charge a higher price
- Profit margins are higher
- Customers tend to be more loyal
- Disadvantages of a niche market
- Lack of economies of scale
- Risk over dependence on a single product or service
- Likely to attract competition if successful
- Market size
- Value
- Total spent by customers buying products
- Volume
- Physical quantity of products sold
- Value
- Market share
- (Sales of a business/ total sales in the market) x 100
- Uses of Branding
- Differentiates products from competiton
- Create customer loyalty
- Helps product recognition
- Develops an image
- Charge a premium price
- Mass markets
- Dynamic markets
- Online retailing
- Benefits of online retailing
- Retailers can market their goods towards people who prefer to shop from home.
- Easier to gather personal information from customers
- Selling overhead costs are lower
- Marketing costs can be lower
- Open 24/7
- Can reach more customers
- Stores can be updated more frequently
- Can buy from anywhere in the world
- Benefits of online retailing
- How markets change
- New markets
- The nature of markets
- The size of markets
- Innovation and market growth
- Innovation is where businesses can create new needs and wants and meet them with new products
- What causes growth in existing markets?
- Economic growth
- Innovation
- Social change
- Changes in legislation
- Demographic changes
- Adapting to change
- Flexibility
- Market research
- Investment
- Continuous improvement
- Developing a niche
- Online retailing
- How competition affects the market
- Businesses
- lower prices
- Make products seem different to those of competitors
- Offer better-quality products
- Advertise more powerfully
- Offer extras like better customer service
- May try to reduce competition by taking over competitors
- May try to cause obstacles for rivals
- Consumers
- Benefit when there is more competition in a market
- More choices
- Lower prices
- Higher quality
- Government ensures there's competition
- Businesses
- Risk and uncertainty
- Risk is where an action is taken where the outcome is unknown, resources are committed which can be lost
- Uncertainty is due to external influences, beyond the control of a business, that impact the market
- Mass markets and niche markets
- 1.1.2 Market Research
- Product and market orientation
- A product-orientated business is one which focuses on the production process and the product itself
- A business that is market-orientated is one which continually identifies the needs of customers
- Can respond more quickly to market changes
- Can anticipate market changes
- Can judge whether a product will be a success more easily
- Can respond more strongly to competition
- Primary and secondary market research used to:
- identify and anticipate customer needs and wants
- quantify likely demand
- Gain insight into customer behaviour
- Limitations of market research
- Human behaviour- the opinions and behaviours of the consumers surveyed may change from what they say during research
- Sampling and bias- not everyone in the population can be asked and the sample may not be representative of the total population's views
- Questions need to be carefully written to avoid being leading
- The use of ICT to support market research
- Company websites- these can provide access to online surveys, these can be targeted to consumers depending o their perceived interests
- these are cheap to administer and can be made available to respondents 24/7.
- Social networking- this helps a firm gain an insigh into the mind of the consumer
- Databases- allows information to be stored which can sort people ito demographics
- Company websites- these can provide access to online surveys, these can be targeted to consumers depending o their perceived interests
- Product and market orientation
- 1.1.3 Market positioning
- Market mapping
- Competitive advantage of a product or service
- A set of unique features of a company and its products which are perceived by customers as significat and as superior to competition
- Can be developed in a number of ways:
- Product quality
- Product design
- Promotion
- Customer service
- Delivery times
- Economies of scale
- Flexibility
- Ethical stance
- Focus on a particular market segment
- The purpose of product differentiation
- Flexible pricing: A business can charge a higher price if they seem different to competition
- Recognition: A brand can gain recognition in the market if they differentiate
- Brand development
- Overcoming competition
- Extended product range: Businesses can serve more than one market in the same industry
- Adding value to a product or service
- Where a product provides extra features for a customer that exceed expectations.
- A business may add value by putting together a package of benefits
- Very good customer service can help to add value
- Packaging and branding ca add value by making a product seem more expensive
- Frequent buyer offers reward customers for purchasing
- Customisation
- 1.1.1 The Market
- Can be developed in a number of ways:
- Product quality
- Product design
- Promotion
- Customer service
- Delivery times
- Economies of scale
- Flexibility
- Ethical stance
- Focus on a particular market segment
Similar Business Studies resources:
Teacher recommended
Comments
No comments have yet been made