1.1 Meeting Customer Needs

What is market share?

The percentage of the market that a business controls, such as Tesco controlling 25%, making it the market leader.

Who is the market leader?

The business with the largest market share.

What is market growth?

Indicates whether a market is expanding or contracting over time.

What is a mass market?

The largest part of the market targeting the majority of customers.

What is a niche market?

A smaller segment of the market targeting specific customer needs.

What is primary research?

Original research tailored to a business, such as surveys or focus groups.

What is secondary research?

Pre-existing research reused by a business, though it may be outdated or generic.

What are open-ended questions?

Questions that allow respondents to provide any answer, offering more detailed insights.

What are closed questions?

Questions that provide a set group of options for respondents to choose from.

What is quantitative data?

Numeric data that can be easily grouped, such as percentages or trends.

What is qualitative data?

Non-numeric data like opinions or open-ended responses, offering deeper insights.

What is market segmentation?

The process of dividing consumers into specific groups based on criteria like age or interests.

What is product orientation?

A business approach where a product is developed first, assuming a market will exist.

What is market orientation?

Designing a product based on what the market demands, ensuring an audience exists.

What is market mapping?

A tool for positioning products in a market using variables like price and quality.

What is competitive advantage?

A unique selling point that gives a business an edge over competitors.

What is added value?

Justification for premium pricing, such as convenience or brand recognition.

What are the main methods of primary research?

Surveys, questionnaires, and focus groups tailored to gather specific business insights.

What are the main sources of secondary research?

Market data, reports, or online resources that already exist but may lack specificity.

How is market growth measured?

By analyzing whether the overall size of a market is increasing or decreasing over time.

Why is understanding market growth important?

It helps businesses decide whether to enter or exit specific markets based on trends.

What factors influence market growth?

Technology, societal changes, consumer demand, and economic conditions.

What are the axes commonly used in market mapping?

High price/low price and high quality/low quality.

What does a gap in the market represent?

A potential opportunity where no products or services currently exist.

What risks are associated with gaps in the market?

Lack of demand or high costs might make some gaps unviable.

What is the significance of being a low-cost producer?

It allows a business to attract price-sensitive consumers and compete at the bottom of the market.

What is product differentiation?

Offering unique features or qualities that justify higher prices and build brand loyalty.

Why is being a mid-market business risky?

It may lose customers to both low-cost and high-differentiation competitors by not excelling in either area.

What is a unique selling point (USP)?

A feature or quality that sets a product apart from competitors, providing a competitive edge.

What role does branding play in competitive advantage?

It builds consumer trust, recognition, and loyalty, justifying premium pricing.

What is the purpose of market segmentation?

To identify and target specific customer groups effectively, improving marketing and product fit.

Why is combining qualitative and quantitative data beneficial?

It provides a comprehensive view, combining trends with detailed insights into customer behavior.

What is the role of consumer confidence in market growth?

High confidence often leads to increased spending, boosting market growth.

What is the impact of societal changes on markets?

Changes like aging populations or lifestyle shifts can create new demands or reduce others.

What are examples of added value in products?

Convenience, brand recognition, and unique features like pre-made meals or premium labels.

How does technology influence market growth?

It drives innovation and new markets but can also render existing markets obsolete.

What is the purpose of market research?

To gather insights that help businesses understand customer needs and market trends.