Meeting Customer Needs

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Risk
Entrepreneurs commit resources that could be lost.
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Uncertainty
Businesses operate in an ever changing environment and are subject to changing external factors.
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What are the different types of markets?
Consumer goods market, markets for services, commodities markets, financial markets and the housing market.
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What does marketing involve?
Understanding customer needs, understanding dynamics of market, developing successful products and promoting the business and its products.
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Mass market
Business sells same products to all consumers and markets them in the same way. Fast moving consumer goods sold. Number of customers is huge if product is sold globally.
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Mass-market
Businesses can produce large quantities at low unit cost by exploiting economies of scale. High sales high profit. Lots of competition lots of money spent on marketing. Investment incapacity required. Businesses have to be competitive with price
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Niche market
Small market segment. Selling to a small customer group sometimes with specific needs. Small firm survive. Avoid competition. Easier to focus on the needs of customer. Possible to charge premium prices.
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Niche market
Can attract competition is successful. Market is small and unable to support competing firms. Large businesses can over run a small rival. Businesses that rely on a single niche are vulnerable they could collapse.
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Dynamic markets
Innovation, social change, changes in legislation, demographic changes and economic growth.
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Market size
The size of the market can be measured by value the total amount consumers spent on the product value the total quantity sold by businesses.
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Market share
Market share is the proportion of a particular market held by business market share can be used as a measure of success.
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Market shares calculation
Sales of the business divided by total sales in the market multiplied by 100.
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Successful businesses adapt by…
Flexibility, market research, investment in new technology people and products and continuous improvement.
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Competition
The level of competition in the market can vary it has an impact on the way businesses operate and experience of customers.
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Market research
The first stage of the marketing process and involves gathering and analysing qualitative and quantitative market data it is the key indicator of customer needs which drives decision-making across all business functions not just marketing.
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Advantages of primary market research
Specific to the needs of the business, more up-to-date and reliable, better for two-way communication and follow-up questions and often better if you want to collect qualitative data.
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Disadvantages of primary market research
It is time-consuming and therefore costly and difficult to conduct a large sample size.
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What is sampling
Provides an insight into the market but save some money as the whole population is not needed example must be representative and biased and large enough to represent the whole market.
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Primary research
Research collected by the company.
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Secondary research
Research that already exists conducted by another organisation.
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Advantages of secondary market research
Easily accessible and a good starting point, fast and less time-consuming and often better if you want to collect quantitative data.
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Disadvantages of secondary market research
Some days I can be free about detailed reports can be expensive to purchase and it is not always up-to-date or specifically tailored to the business needs.
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Examples of primary market research
Questionnaires, interviews, focus groups and customer observation.
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Examples of secondary market research
Market research reports, competitors, websites, government statistics and newspaper articles.
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Product orientation
Focused on production efficiencies and the product it self so the product features profit margins and efficiency.
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Market orientated
Focused on consumer needs, understanding customers and developing products that meet their needs their customers issues characteristics and how the product is used.
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Limitations of market research
It is often biased a small sample limits the reliability of the research causality can be hard to identify and collecting it’s very time-consuming.
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Uses of market research
Product development, budgeting, production forecasting, sales forecasting, developing marketing activities, workforce forecast and cash flow forecasting.
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Benefits of sampling
It is quicker and easier than trying to collect research from everyone this is often impossible and the bigger the sample size the more representative it will be.
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Correlation
Helps businesses understand the relationship between two factors is it business can understand the key factors determining demand for its products they can manipulate these trees greater sales.
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ICT and market research
Collecting data through websites, social media and networking and analysing information in databases
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Benefits of market segmentation
Differentiate itself from its competitors, develop and build its brand, identify and satisfy the needs of a specific group of customers, reaches customers with relevant marketing activities, Focus the business activities and build loyalty.
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Market maps
A technique used to understand how products businesses are viewed relative to competitors based on two relevant characteristics.
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Benefits of market maps
It helps a business decide whether to set up in the market, it is a useful process of comparing similarities and differences between businesses, getting a better understanding of competitionAnd useful as market research for customer perception.
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Factors to consider when positioning a product or business
The attributes of the product such as features and quality. The origin of the product and business such as its heritage. The classification of the product or business.
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Limitations of market maps
Perceptions of customers other businesses and society often very complex and may not fit into the model of the two variables in market map is planning to and different different stakeholders may have a different opinion of where the business is.
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Competitive advantage
A set of unique features of the business and its products that are perceived by customers are significant and superior to competition businesses that have a competitive advantage will often differentiate their products from competitors.
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How can differentiation be achieved
Developing a brand characteristics creating unique product features providing a unique customer experience building good relationships with customers and offering a price for undercut competition.
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USP
Something that sets the business apart and makes it distinguishable from any other business.
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Innovation
Ability of this needs to create new and unique processes and products these can be sometimes legally protected for a patent.
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Architecture
Refers to the relationships within a business that create synergy and understanding between suppliers customers and employees of the business.
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Reputation
Brand values are hard to replicate and may take years to develop.
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Ways to add value
Good customer service, speed of service and response time to customers, packaging, frequent buyer offers, customisation, better design and branding.
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Adding value and profit
Closely linked to the concept of profit the more value of business can add the higher the price and the greater the profit margin the challenge for any business is adding value without adding too many additional costs.
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Other cards in this set

Card 2

Front

Uncertainty

Back

Businesses operate in an ever changing environment and are subject to changing external factors.

Card 3

Front

What are the different types of markets?

Back

Preview of the front of card 3

Card 4

Front

What does marketing involve?

Back

Preview of the front of card 4

Card 5

Front

Mass market

Back

Preview of the front of card 5
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