Paper 2

• The Market


  The place where the laws of supply and demand operate and buyers and sellers interact
• Marketing


  Understanding the needs and wants of customers and providing the right goods and services
• Customer


  A person who buys goods or services
• Consumer


  A person who uses goods and services
• Customer needs


  Things you have to have in order to live
• Customer wants


  Things that you would like to have
• Price needs


  The price should reflect the quality of the product
• Quality needs


  The product should have sufficient quality to satisfy the needs of the customer
• Choice needs


  There should be a sufficient range of products to choose from of different design, price and quality
• Convenience needs


  The product should be available in the place and at the time a customer needs or wants it
• Identifying customers


  Finding out who buys or will potentially buy a product
• Understanding customers


  Finding out how customers choose between different products
• Exchange process


  When one entity or person gives up something for another, e.g. a business exchanges a product for payment
• Value for money


  The idea that you have paid a fair price for a product or service
• Segment


  A piece of the whole usually expressed as a percentage or fraction
• Market segmentation


  Dividing the market up into groups of customers and consumers with specific needs and wants
• Mass marketing


  Marketing a product to the whole, unsegmented market, regardless of individual group or demographic differences
• Location


  Where people live, work and interact with the market
• Income


  How much money customers earn
• Lifestyle


  The choices people make in the way they live, e.g. hedonistic, vegetarian, health-conscious
• Age


  The different age groups that make up the population, usually divided into bands or life stages, e.g over 65s or retired people
• Other Demographic factors


  Factors that define people into groups, e.g. race, religion, gender,
• Demographics


  The study of statistical differences within a given population
• Market mapping


  Setting out the features of a market in the form of a diagram
• Targeting


  Aiming your product or service at a specific group or set of groups in the market
• Competing effectively


  Gaining market share and driving inefficient products and businesses out of the market
• Market research


  Methods that a business uses to find out about the viability of a new product, attitudes and opinions towards existing products and how to better satisfy the needs and wants of the customer
• Purposes of market research

  Identify customers and their needs, find gaps in the market, reduce risk and make better business decisions
• Quantitative research


  Finding out statistics, percentages and data
• Qualitative research


  Finding out opinion, experience and attitudes
• Primary research


  Getting first-hand information from customers sometimes called 'fieldwork
• Secondary research


  Using existing sources of data sometimes called 'desk research
• Online survey


  Computer-based questions, collected and collated automatically
• Questionnaire


  Usually sets of written or verbal questions to customers
• Focus group


  A small group that is asked about their opinions, habits and choices
• Observation


  Watching the behaviour of customers and consumers
• Internet research


  Using the web to do market research, this can be both quantitative and qualitative
• Sales volume


  The number of products sold
• Sales value


  The amount of revenue received from products sold
• Market share


  The percentage of the market that an individual business or product commands in comparison to its direct competitors