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Define market segmentation
Process where a business divides a market into groups based on specific characteristics.
Define product orientation
A marketing strategy that focuses on the quality and features of the product itself, often prioritizing product innovation over customer needs or market demand.
Define secondary research
Collection and analysis of data that already exists.
What is the effect of researcher bias
Get people to answer in a certain way.
Purpose of market segmentation
To allow the business to directly target specific consumer groups.
Define market orientation
A marketing approach focusing on the needs of the customer and tailoring a product towards this.
Define test marketing
Free samples are provided to the business’ target market to test the response to it.
Define market positioning
The product launch decisions such as price, quality, branding and customer perception which puts the product in a position comparable to others in the same market.
Define market map
2 dimensional diagram which allows a business to compare its products’ characteristics to rivals.
Define market saturation
When most customers who want to, have bought a product in a market.
Define competitive advantage
Features of a business or its products that customer perceive as far better than competitors.
Define product differentiation
When businesses’ try to make their goods or services stand out from others in the market.
Possible sources of competitive advantage
Quality
Price
Convenience
Ethical stance
Reliability
Define added value
The difference between the selling price and the cost of inputs to create the product/service.
Define market
A place where buyers and sellers meet to exchange goods or services.
Define niche market
Where products are aimed at a small subsection of a market
What is the aim of marketing
To help identify, anticipate and satisfy consumer needs and wants profitably.
Define market research
Gathering data from consumers to aid business decisions
Characteristics of a mass market:
Less unique products as aimed at broad market segments
Low average costs due large scale production economies of scale
Low prices lead to greater affordability and higher sales volumes
Low prices lead to lower profit margins
Characteristics of a niche market
Products are more unique- aimed at narrow market segments
High average costs due to small scale production- no economies of scale
High prices = lower sales volumes
High prices can allow businesses to earn higher profit margin
Define dynamic market
A market that is subject to rapid or continuous change
Define market growth
The measurement of the change in the entire market, expressed as a percentage of the original size
Define competition
Occurs when at least two businesses are providing goods/services to the same target market. More businesses = more competition.
Difference between indirect and direct competition
Direct competition is with the same product but indirect competition is a different product competing for the disposable income of the consumer.
Difference between risk and uncertainty
Risks can be calculated and prepared for whereas uncertainty can’t as its out of the blue.
Risk is a potential threat to business success
Uncertainty is when outcomes are difficult to predict
How does market research help a business?
To reduce risk when launching new products or entering new markets
Anticipate future needs and wants of consumers
To understand consumer behaviour
To identify how much consumers are prepared to pay
To identify competitors and gauge their potential strengths and weaknesses
What are the methods of primary market research?
Surveys
Observation
Interviews
Test marketing
Focus groups
Examples of ICT to support market research:
Company websites- tracking searches, reviews and rivals websites (secondary).
Social networks- Can track opinions on things and run quick polls/surveys
Databases- Store customer info
Strengths of market segmentation
Recognizes not all consumers are identical
Can increase loyalty as targeted consumers feel needs are being met
Reduces cost and waste compared to whole market
Help alter products/marketing
Limitations of market segmentations
Not everyone behaves the same
Difficult to find segments- people can belong to multiple
Identified segments may be too small and unprofitable
Requires more detail = higher costs
Usefulness of market mapping
Market gaps can be identified
Comparisons can be made between a business’ products and those of its rivals - where are the business’ products positioned about its rivals?
Market maps are simple to construct and offer a visual illustration of the position of a product in the market
Limitations of market mapping
A gap can not be profitable to fill
Mapping a market may require primary research which can be expensive
Only two criteria can be chosen which may prove too simplistic
Markets are often dynamic and a market map only provides insight at a specific point in time
Methods of adding value
Marketing and branding
Functions and features
Packaging
Design
Product differentiation
Customization
Customer service
Convenience
Note 
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