theme 1.1

• Marketing- The process of identifying, anticipating and satisfying customer needs and wants profitably.
• Niche- Business targets a smaller section of a larger market where customers have specific needs and wants eg Lush.
• Mass- Business sells into the largest part of the market, where many similar products are on offer.
• Marketing size- can be either big or small. It is measured by two factors: Value- Measure the market in a currency. Measured buy the total spent by customers buying products. Volume- Units sold in a market. The physical quantity that are produced and sold.
• Market share- The percentage of a market owned by a business when compared to their competitors.

  Formula- sales or volume sold by a company / total sales or volume sold in market x100
• Brands- Try to establish themselves by creating a brand name and setting themselves apart from competition. Could be used for product recognition.
• Dynamic market- The market changes over time. It can grown, shrink, fragment or completely disappear.
• Innovation- causes market growth. There are two types: product innovation (the adaptation or improvement of existing products) and process innovation (the adaptation or improvement of existing processes)

  innovation can help to create new markets and eliminate others.
• Competition- Rivalry that exists between businesses in a market. It impacts both the business and the consumer.
• Direct competition- Businesses produces similar products that appeal to same consumers eg Aldi and Lidl.
• Indirect competition- Businesses make or sell products not in direct competition but for the same customer expenditure eg CDs vs Cinemas.
• Risk- Something that can be planned for. The probabilities of the outcomes are known.
• Uncertainty- Caused by unexpected, often external factors, outside of the businesses control.
• Product orientated- Prioritise a products design quality or performance rather than meeting customer preferences. Lots of research and design.
• Market orientated- Business focuses on what the market wants. they specifically look at what customers need. This needs to be flexible and requires a lot of market research.
• Primary research- This is known as 'Field Research'. It involves collecting new data that is first hand for a specific purpose. For example, a questionnaire.
• Secondary research- Known as 'Desk research'. It involves collecting data that already exists.

  Internal data- Company sales figures, profit from previous years. These are collected from existing documents.

  External data- Market research reports from MINTEL. These sources are from outside the business.
• Qualitative data- Data that is not in numeric form. It is motivations and opinions. They show why something happens. This data uses open ended questions.
• Quantitative data- Data that is in numeric form. Facts and figures. Often large quantities of data to analyse. This data uses closed questions.
• Market segmentation - Splitting up their target audience or market into segments that are based on wants and needs.
• Types of segmentation:

  Demographic- age, social class, income, gender.

  Geographic- regions of country, rural, urban.

  Psychographic- target audience or behaviours.
• Market Mapping- The positioning of brand influenced by customer perceptions rather than business.
• Competitive advantage- The unique features of a company and their products perceived by customers as better than competitors.
• How to develop competitive advantage?

  product design

  customer service

  economies of scale

  ethical stance

  flexibility
• Product Differentiation- Setting a product apart from its competition, It is used to gain a comeptitive advantage edge over rivals.
• How might a business differentiate?

  Catchy slogans

  Worldwide availability

  Range of prices

  Seasonal products

  Market research