4.1 Introduction to marketing

market research

The process of systematically gathering data from consumers, which can be used to influence business decisions. It helps businesses identify products/services they can develop in response to the needs and wants of their customers

product-oriented

an approach to marketing that focuses on the characteristics of the product rather than the needs of the consumer

pros and cons of product-oriented

pros

• innovative ideas

• saves time and cost on research and development

• can command premium pricing

cons

• high risk

• less responsive to changing customer needs

• less competitive

market-oriented

an approach to marketing that focuses on the needs of consumers and uses this information to design products that meet those needs 

pros and cons of market-oriented

pros

• higher probability of success

• builds strong customer satisfaction and loyalty

• more adaptable

cons

• market research costs and time

• lacks innovation

• risk of chasing short-term trends, lacks long term differentiation

market share + calculation

the proportion of the total sales of a product/service as a proportion of the size of the market as a whole

( business sales / market size ) x 100

market growth + calculation

the increase in the overall size, value or volume of a market over a period of time, usually expressed as a percentage.

( new market sales - original market sales) / original market sales x100

niche markets

when businesses identify and satisfy the demands of a small group of consumers within the wider market

mass markets

when businesses sell their products to most of the available market

market leadership

a businesses ability to maintain the largest share of a specific market or industry.