business: #10

marketing

identifying customer wants and satisfying them profitably

role of marketing

1. identifying customer needs

2. satisfy customer needs

3. maintain customer loyalty

4. gain info about customer

5. anticipate changes in customer needs

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 it's products

how to maintain customer loyalty?

fast response, promotions, membership/loyalty programs

gain info about customers

understanding why customers buy products and how they use them

anticipate changes in customer needs

identifying new trends in customer demand or gaps in the market/untapped markets to produce new goods/services

why do consumer spending patterns change?

1. tastes

2. tech

3. income

4. ageing

why have some markets become more competitive?

1. globalisation (online shopping)

2. transportation improvements

3. increased accessibility through the internet (consumers know more)

how can businesses respond to changing spending patterns/increased competition?

1. maintain good customer relationships

2. keep improving it's existing product

3. bring out new products to keep consumers’ interest

4. keep costs low to maintain competitiveness (also keeps prices low)

mass market

business sells to largest part of the market, where standardized products are being sold

advantages of mass market

1. total sales are high

2. costs low, as promotion is to appeal to most customers

3. no extra costs, as product is standardized

disadvantages of mass market

1. standardized products, hence customers’ specific needs aren't met

2. high competition levels

3. difficult to sell in some countries

niche market

small, usually specialized, segment of a much larger market

advantages of niche market

• reduced competiton

• can identify customers' needs → increased customer loyalty

• customers are prepared to pay higher price

disadvantages of niche market

• limited sales potential

• business can't spread risks

• high risk of imitation

market segment

an identifiable sub-group of a whole market in which consumers have similar characteristics or preferences

ways of segmenting a market

1. income

2. age

3. location

4. gender

5. lifestyle

advantages of market segmentation

• needs of each customer are completely satisfied → product is designed for specific needs

• high total sales

• targeted ads

• willing to pay higher price

disadvantages of market segmentation

• small market size

• cost of development increases

• storage costs increase

• advertising costs increase

what does the marketing department consist of?

1. sales

2. market research

3. distribution

4. promotion

formula for market research

sales revenue/total sales for whole market x 100