meeting consumer needs: the market

brand name

brand name

name, term,sign symbol or design that allows a consumer to identify goods and services of a business and differentiate a product from its competitors.

credit crunch

when borrowing becomes difficult because bank loans are harder to get and interest rates are high

e commerce/ online retailing

using electronic systems to sell goods and services using the internet

Market

set of arrangements that allows buyers and sellers to communicat and trade in a particular range of goods and services

market share

the porportion of total sales in a particular market that a business or brand is responsible for in %

marketing

the management process of identifying,anticipating and satifying customer needs/wants profitably

mass market

a huge market where products with mass appeal are targeted

niche market

a smaller more specialised market within a large industry

online retailing

the selling goods online

volume

quanitity of products sold

value

total spent by customers

what does marketing involve

• identifying needs and wants of customers

• desiugning products that meet those needs

• understanding the challanges posed by competitors

• informing customers about the product

• persuading and distributing products

characteristics of mass markets 2 or 3 needed

• the same product is sold to everyone

• large number of customers in the market

• mass quantities produced so lower average costs

• higher revenue but lower profit margins

• chance of forming an economy of scale

characteristics of niche markets

• sells to a small gorup of people

• meet of specific needs

• avoids competition because the are market orientated

• charge premium prices

• more vulnerable to market fluctuations

advantages of mass markets

• lower unit costs → large-scale production

• more sales → higher revenue

• increased brand awareness so the brand becomes easily identifiable

• easier to target a wider market

• higher chances of economies of scale

disadvantages of mass markets

• low prices → decreased profit margin

• increased competition → products are less differentiated

• higher risk → harder to compete in saturated markets

• associated with lower quality goods due to low prices

advantages of niche markets

• high profit margins because the prices are higher

• decreased competition as similar businesses do not exist

• increased customer loyalty as the firm is market-orientated so their needs are met

• the firm will have specialist skill and knowledge

disadvanatages of niche markets

• risk of overdependence on one product/service

• not possibilities of economies of scale

• sensitive to fluctuation in the market

• harder to create a recogniseable brand

market size

the total revenye generates by the sales of all products and services in the market

uses of branding in marketing

• customer loyalty

• charging premium prices

• developing a brand identity

• product recognition

dynamic markets

a market that is subjected to continual and rapid change

how do market change

• grow

• shrink

• fragment

• emerge

• disappear

what do firms need to do to cope with a dynamic market

adapt to the changes in social,economical, environmental and financial changes in society to remain profitable

advantages of e commerce/online retailing + their effects (5)

• retailer can market to a wider group of people in society → increases volume of sales generated by a firm → increased revenue and product availability

• easier to segment psychologically→market to a specific target market easier → easier to reach target market

• lower marketing costs→ more resources can go to financiing other areas of a business

• open 24/7 → increased accesibility

• greater flexibility → firms can instantly update to meet new trends online

disadvantages of e commerce/online retailing + their effects (2)

• hard to generate economies of scale → there is not a big competitve advantage

• risk of overdependence on one product →limited market research that can be conducted →vulnerability to change

3 ways markets can change

• market size

• nature of market

• new markets

how does market size change(7)

• change in population

• change in economic conditions (financial state of people)

• supply and demand

• competition in the market

• trends

• inflation

• consumer preferences

stages of change in market size

stability: market stays the same due to consumer preferences being stable

growth: change in consumer preferences leads to an increased of market size

decline: new invention/ innovation replaces the market and it goes extinct

nature of markets

market are in a state of flux

flux:the structure and nature of a market is subject to constant change

factors affecting the nature of markets(7)

• income

• technology

• cost of production

• number of sellers and buyers

• social media

• consumers trying to match colleague/celebrity spending habits

new markets

markets that are always developing

• appea when new products are launched

• sources of new markets are BRIC countries

BRAZIL

RUSSIA

INDIA

CHINA

types changes that affect market growth(4)

• innovation

• social changes

• demographic changes

• changes in legislation

economic growth

the development of production and services in the economy

innovation

creating a new product by taking advantage of inadequacies in the market

social changes

how changes in society impact the greater market

such as :

• changes in beliefs/attitudes

• changes in technology

• changes in the consumer demographic

changes in legislation (law)

can destroy or put a market in decline

as the can prevent marketing or reduce sales volume

demographic changes

:changes in the structure of the population

ways to adapt change(5)

• constant improvement (efficiency customer loyalty+ innvation

• market research

• investments

• flexibility (adapting to changes in the market)

• developing a niche

competition

a rivalry that exists between businesses in the same market

effect:creates pressure on businesses to attract consumers

consequences of competition

• harder to enter a market

• surviving the market is harder

• reduced profit

• high chances of take over

take over

buying a rival market

e.g spending absurd amounts on advertisements

advantages of competition for consumers

• cheaper prices

• more choice/customizeability

• better quality

• low chances of being exploited

ways to attract customers

• lowering prices

• differentiating products

• offerring better quality

• using powerfull advertising

• offering incentives

risk

an action where the outcome is uknown and resources could be lost

uncertainty

where the markets that businesses work in are vulnerable to external influences due to a lack of control

examples of uncertainty

• new competitor join with a superior product

• social changes

• new legislation

• new technology

• natural disasters

• credit crunch/recession