What is marketing?
Marketing addresses people’s needs and wants by predicting what consumers may want in the future. (it is not only advertisement, it is looking into the market and seeing what is needed)
What is Market orientation?
When firms create products, based on what consumers want, and what the public prefers
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What is marketing?
Marketing addresses people’s needs and wants by predicting what consumers may want in the future. (it is not only advertisement, it is looking into the market and seeing what is needed)
What is Market orientation?
When firms create products, based on what consumers want, and what the public prefers
What is product orientation?
When firms create products based on what they want, and their own skills and strengths e.g., british airlines wanted to create a plan that can cross the atlantic, and weren’t concerned whether or not it would sell
What are advantages of market oriented firms?
Greater flexibility → respond to changes in demand
More profits can be made, as comsumers purchase their wants
increased customer satisfaction
Lower risk → firms can be sure that their products will sell
What are disadvantages of market oriented firms?
market research is needed → finding out what consumers want can be expensive
consumer’s desires aren’t fixed and can change rapidly
they often need to have new workers or learn new skills, as they may not have transferable skills needed for each new product they create
What are advantages of product oriented firms?
quality can be assured, as they are good at what they do → it is their passion
more control over operations → it is not determined by demand
no market research needed
they can often charge higher prices as products are likely to be higher quality, premium products
What are disadvantages of product oriented firms?
The wants of the market are ignored → less oportunites to make profit and less customer satisfaction
high risk strategy with high failure costs
What is market share?
Market share is an organizations share of the total value of sales within a specific industry
How do you calculate market share?
(Firms sales revenue/industry sales revenue) x100
What are benefits to firms with a high amount of market share?
Eliminate competition
brand-recognition and status
price setting abilities
lower risk of takeover
How can a business increase Market share?
motivating and training their workforce
increasing efficiency
promoting brand
What is market growth?
An increase in sales in an industry → the market size is increasing
Market growth rate formula
(current market size - original market size)/original market size x 100
What is a marketing plan?
A firm creating a plan and marketing strategies to reach their objectives and goals
Advantages of marketing planning
improves changes of success
provides clear objectives
Disadvantages of marketing planning?
time cost
money cost
human resource cost
plans may be inflexible and outdated
What is a market segment?
A particular group of customers with similar characteristics and have similar needs or wants
What factors can the target groups for a business be based on?
Consumer profiles:
demographic → age, gender, religion, ethnicity
geographic factors → location, climate
psychographic factors → status, hobbies, interests
What is a mass market?
the market for goods that are produced in large quantities e.g., fast food, bottled water, chocolate
What is a niche market?
the market for goods that are specialized and produced in small quantities e.g., luxury yachts
What are advantages of a mass market?
economies of scale → low cost of production and large amounts of goods being produced
large customer base
increased sales
What are disadvantages of a mass market?
risk of takeover / high amounts of competition
no ability to charge high prices, as these aren’t specialized or high-quality goods
products don’t have a good quality → less customer satisfaction
What are advantages of a niche market?
products are more customized → can be sold more expensively
less competition → lower threat of takeover
high customer satisfaction due to good quality → customer loyalty
What are disadvantages of a niche market?
low brand recognition
limited customer base → only targets a specific market segment
few opportunities of economies of scale → high cost of production
What is a brand/product position map?
Customer perceptions of a product or brand in relation to others in the market. These are useful for businesses as they can see where they are in quality, price, health etc. in relation to other brands
Why is a unique selling point important for businesses?
They stand out from its competitors, eliminate competition and attract customers
What is differentiation?
The act of distinguishing a business or its products from rivals in the industry
What are advantages of differentiation?
businesses stand out from competitors and can eliminate competition
they can charge higher prices for their unique products
brand recognition and loyalty
What are disadvantages of differentiation?
excessive differentiation can confuse consumers
costly because often the products are high quality