finals

• marketing is the process of identifying, anticipating and satisfying customer wants and needs profitably
• you can satisfy wants and needs by improving existing products or creating new products
• the roles of marketing are:

  • identifying customer needs
  • satisfying customer needs
  • maintaining customer loyalty
  • building customer relationships
• the target market is a specific segment of the market that the business aims to sell to
• reasons spending habits may change

  • decrease income= buying less goods, increased income= buying more+expensive goods
  • if competition decreases prices or is seen to have the better products, customers switch
  • if the price increases, demand decreases. If the price decreases, demand increases
  • increases in money spent on advertising and promotion can convince consumers to change spending habits
• businesses able to adapt products to changing spending habits are more likely to survive and are more competitive.

  this can be done by:

  • adapting produce
  • new product
  • selling in new markets
  • closing unprofitable locations/products
• increase competition is due to

  • globalization
  • technology (more products available giving more options and more competition)
  • government regulations (may make it easier to enter new market)
  • communication (increase communication makes it easier to share information)
• responding to change in spending habits and increased competition

  • develope new products
  • improve customer relationships
  • reduce costs (improved efficiency)
  • expand into new markets
  • improve advertisement and promotion
• mass market= majority of potential customers in the market. products can be sold in large quantities for low prices
• advantages of mass market:

  high sales at low prices so the costs are spread

  good source of regular income reduces the risk of cash flow problems
• disadvantages of mass market:

  • high profit attracts competitors. this can drag the price down and reduce profit
  • difficult to identify change in needs
  • products are less unique, decreasing customer loyalty
• niche market is a small or specific part of the market. products meet specific needs.
• advantages of niche market

  • can focus on target customer so changing needs are met
  • little competition gives the business a larger market share
  • business can charge higher prices (premium prices)
• disadvantages of niche market:

  • if successful, can attract large businesses, making it harder for small businesses to compete.
  • sales are low and may be limited.
  • lower output means there is lower economies of scale. this increases cost
• a market segement is a group of customers who share common charecteristics
• factors of segmentation:

  • geographic segmentation (location)
  • demographic segmentation (age and gender)
  • socioeconomic status (levels of income)
• benefits of segmentation:

  • products are changed to meet specific needs, giving them a higher added value because u can charger higher prices
  • less wasted resources (on failed products) lowers marketing cost which increases profit margin
  • identifies potential markets which increases the potential sales revenue making the business more competitive
• deciding on a segmentation strategy:

  • potential revenue (if the market is too small its less likely to generate profit.
  • future growth (if the segment is unlikely to grow its not worth the investment)
  • the brand (the brand must match the market to be able to compete)
• benefits of market research

  • better understanding of target audience means products can be developed to meet wants and needs. this increases sales and decreases wasted resources on failed products
  • informs business of competitions activities. this helps develope a better market strategy to increase market share.
• market orientation identifies wants and need before developing a product to meet them
• advantages of market orientation:

  • attracts potential customers by meeting specific needs. this ensures long term success of the product.
  • the business is trusted to respond to changes which builds brand loyalty
• product orientation= products developed before identifying wants and needs
• advantages of product orientated:

  • lower cost of market research
  • less reliance on date that may be outdated
• primary market research is conducted for the first time for a specific purpose
• benefits of primary market research:

  • date is relevant to specific product
  • gives a competitive advantage because competitors don't have the data. this can help develope a unique selling point
  • control over date collection gives more accurate data
• limitations of primary research

  • expensive which means it may not always be possible on a limited budget
  • answers given may not always be honest
• methods of primary research:

  • interviews
  • postal questionaire
  • online survey
  • focus group
• advantages of interviews:

  • can ask more detailed questions for more detailed data
  • provides specific information about how customer needs are met
• limitations of interviews

  • time consuming
  • limited number of people can be interviews which may cause a lack of respresantation
• advantages of postal questionnaires

  • same questions are asked so data is easier to analyse
  • quantitative data can give indication of customer wants and needs
• limitations of postal questionnaires:

  • requires sending in mail which adds cost
  • questionnaires may not be sent back which can cause inefficiencies
• advantages of online surveys

  • minimal costs
  • easy to set up
  • quantitative data can be immediately analysed
• limitations of online surveys

  • easy to ignore
  • may be given false information
• advantages of focus groups

  • good source of qualitative date
  • quicker and cheaper than individual interviews
• qualitative data answers questions about a consumers ideas and opinions. its more detailed than quantitative date
• quantitative data answers questions about quantity . the data is numerical.
• limitations of focus groups:

  • time consuming and expensive to collect data
  • limited number of participants so not whole of market is represented
• sampling is getting general idea of views swithout asking all of population
• random sampling is selecting participants randomly. its simple making it cheaper and quicker. however, there is a possibility of someone who doesn't match characteristics of most likely customer being selected.
• quota sampling is separating into groups with similar characteristics, and picking a few participants from each group. its more time consuming but is more likely to meet target market. ]