Business Studies - Topic 10

Marketing

Identifying customer wants and satisfying them profitably.

Customer

A person, business or other organisation that buys goods or services from a business.

Customer Loyalty

When existing customers continually buy products from the same business

Customer relationships

Communicating with customers to encourage them to become loyal to the business and its products

Market Share

The percentage of total market sales held by one brand or business

Consumer

Someone who buys goods or services for personal use, not to resell.

Mass market

Where there is a very large number of sales of a product

Niche market

A small, usually specialised, segment of a much larger market.

Market segment

An identifiable sub group of a whole market in which consumers have similar characteristics or preferences.

What are the roles of marketing?

• Identifying customer needs

• Satisfying customer needs

• Maintaining customer loyalty

• Building customer relationships

Why do customer/consumer spending patterns change?

• Consumer taste and fashions change

• Changes in technology

• Changes in income

• Ageing population 

• Increased competition, e.g globalisation

How can a business respond to market changes?

• maintain good customer relationships

• keep improving existing products

• new products

• keep costs low to maintain competitiveness.

What are advantages of a mass market?

• potential for high sales

• opportunities for growth

• economies of scale

• risks can be spread

What are disadvantages of a mass market?

• Competitors

• High costs for advertising and promotion

• might not meet customer satisfaction

What are advantages of a niche market?

• small business may be able to sell successfully 

• needs of consumers can be satisfies

What are disadvantages of a niche market?

• limited sales potential

• Often you can only specialise in one product

• No longer in demand

What are the types of segmentation?

• age

• gender

• lifestyle

• region/location

• by socio-economic group

What are advantages of market segmentation?

• Sell more products

• customer loyalty more likely

• introduce new or improve new product

What are disadvantages of market segmentation?

• detailed market research needed

• expensive to adapt products/promotion for each group.

• segment may be too small to be profitable