businesses and their customers

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Socio-Economic Groups
A method of dividing up the population based on the occupation of the head of the household.
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Mass Market
Making a product or providing a service aimed at a large number of customers.
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Niche Market
A small market for a specialized product.
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Product-Oriented
Where a business analyses the market and consumers’ needs for a product before starting production.
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Market Segmentation
How the market for a product or service is divided – e.g. by age or gender.
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Targeting
When a business aims a product or service at a particular group of consumers it is said to be targeting that group.
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Disposable Income
The amount of money a consumer has to spend after paying essential bills.
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Test Market
Where a business tests its product in order to see whether consumers will buy it.
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Market Research
The collection of data on customer habits to help decision-making in marketing.
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Primary Research
Data collected first-hand, often in the form of surveys. Sometimes referred to as field research.
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Secondary Research
The collection of data using research or information provided by others, such as magazines, journals and the internet. Often called desk research.
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Surveys
Primary research data collected in the form of questionnaires and interviews.
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Questionnaires
A question sheet filled in by the consumer.
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Interview
A question sheet filled in by the person conducting the interview.
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Consumer Panels
Groups of consumers who are paid to comment on products and services. They are often kept by a business to act as a permanent method of testing their products.
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Target Market
The group of customers to whom a business aims to sell its products. The target market may be other businesses as well as consumers.
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Sampling
The method of choosing a group of customers to represent the views of the target market for a product or service.
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Random Sampling
Choosing a sample for market research where each customer has an equal chance of being asked. A true random sample is often difficult to achieve, and is not used as much as quota sampling.
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Quota Sampling
A method of choosing a sample that represents the target market. If females buy 80% of a product, then there should be 4 females questioned to every male in a quota sample.
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SWOT analysis
The process of a business looking at its performance against others, examining strengths, weaknesses, opportunities and threats.
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Marketing Mix
The parts that make up the marketing for a product or service. Often limited to the 4Ps but can also include other features.
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The 4 Ps of the Marketing Mix
Price, product, place and promotion.
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Ethical Behaviour
A term used to describe a business when it behaves in a fair and morally correct way.
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Competitor Pricing
Setting a price based on price charged by competitor businesses for a similar product.
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‘Cost Plus’ Pricing
A pricing method that adds a percentage for profit to the total costs of marking a product. This gives the selling price.
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Penetration Pricing
Setting a price lower than the competitor businesses. Often used by new businesses to break into a market. This should only be seen as a short-term strategy.
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Skimming
Where a new product is more advanced than competitors, a price is set high as some consumers are willing to pay higher prices to own the newest technology. Sometimes called ‘creaming’.
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Differential Pricing
Charging different prices to certain customers for the same product or service. Often used in the transport industry.
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Promotional Pricing
Reducing prices to give products a boost or to sell off old stock. Most commonly seen as sales in shops.
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Psychological Pricing
Setting a price such as £9.99 instead of £10 to make the product seem much cheaper.
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Research & Development (R&D)
Is used to help introduce both new and existing products. The research may be testing products in a laboratory or conducting market research by interviewing consumers.
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Product Mix
Is the mixture of products or services a business markets. For example, Sony has a product mix which includes TVs, DVDs, camcorders, computer game consoles and Hi-fi units.
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Branding
Is the use of a name to market a product e.g. Twix.
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Trademark
Is the use of a symbol or name to identify and market a product. It may be registered and be marked with ‘TM’ to make sure that other businesses cannot copy this trademark. Cadbury’s is the registered trademark of Cadbury Limited.
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Product Life-Cycle
Is the life of a product, usually shown as a graph divided up into 5 stages: introduction, growth, maturity, saturation and decline.
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Added Value
Is the extra items that are added to a product to help sales. Often used to extend the life-cycle of a product.
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Relaunching
Occurs when an existing product is given a ‘new’ image to help boost sales and further extend the life-cycle of the product.
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E-Commerce
The bringing together of buyers and sellers electronically. Generally used as selling using the internet.
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Place
The part of the market mix that deals with distributing the product to the customer.
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Methods of Distribution
The methods used to get the product to the consumer, for example: producer to retailer to consumer.
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Wholesaler
Part of the distribution that deals with breaking bulk between producer and retailer. A wholesaler buys large quantities from a producer and sells smaller quantities to retailers.
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Direct Sales
A method of selling by larger businesses direct to the customer by catalogues TV, etc. Though smaller businesses have often sold goods in this way, the term is usually used to include more recent distribution methods.
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Global Market
A world-wide market provided by the internet.
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Sales Promotions
Are the methods by which a business tries, over a short period of time, to boost sales; e.g. by reducing prices.
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Loss Leaders
Are goods offered for sale with little or no profit for the business. They are often intended to attract consumers who will buy other goods along with the loss leader. Often used by supermarkets.
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Point of Sales
Are used where the product is sold; e.g. displays.
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Merchandising
Is the promotion of products by selling goods in some way connected with another product or event; e.g. the sale of figures of characters who appear in a major film.
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After-Sales Service
Is the help given to customers after they have brought a product; e.g. a guarantee to repair the product in the first year.
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Public Relations (PR)
Are the methods by which a business brings the product to the attention of consumers by articles in newspapers or other events. This is aimed at improving the image of the business.
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Sponsorship
Is a way of advertising a business by providing money for an event or particular team. E.g. Chelsea FC and Samsung.
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Advertising Media
The methods by which a business can advertise a product. Includes newspapers, TV and radio.
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Advertising Campaign
A series of advertisements, often using different advertising media.
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Advertising Standards Authority (ASA)
Checks that adverts are harmful, misleading or offensive.
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Direct Marketing
Involves contacting the consumer through offers sent directly, usually through the post. Sometimes referred to as ‘junk mail’.
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what is the five step conclusion?
1) make a judgement 2) biggest influence 3) biggest drawback 4) why 5) how to overcome this
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Other cards in this set

Card 2

Front

Mass Market

Back

Making a product or providing a service aimed at a large number of customers.

Card 3

Front

Niche Market

Back

Preview of the front of card 3

Card 4

Front

Product-Oriented

Back

Preview of the front of card 4

Card 5

Front

Market Segmentation

Back

Preview of the front of card 5
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