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BUSINESS THEME 1 - TOPIC 1.1 - MEETING CUSTOMER NEEDS - Coggle Diagram
BUSINESS THEME 1 - TOPIC 1.1 - MEETING CUSTOMER NEEDS
the market
mass marketing
the attempt to create products or services that have universal appeal e.g coca cola
the end goal of mass marketing is to create a generic brand which is totally associated with the product
niche marketing
a very small segment of a much larger markets
specialised products to meet distinctive needs
sells in low volumes so price is higher
brands
a brand can be given a 'personality' which helps it to be recognised and remembered
effective branding is at the heart of achieving product differentiation
dynamic markets
these are markets which are constantly changing
4 factors to consider...
online retailing
- this distribution channel is dynamic + quite unpredictable
how markets change
innovation and market growth
- innovation means bringing a new idea to life which can spark new market growth
adapting to change
- as consumer and fashion tastes change then so must the business
how competition affects the market
competition
is where rival businesses in the same market try to win customers from eachother
it encourages companies to try their best to be innovative and creative
firms may also drop prices to gain competitive edge over rival companies
risk and uncertainty
risks are factors that are not expected but can be quantified
uncertainty is being unable to predict what will happen
market reseach
market orientated
approach means the business reacts to what customers want
advantages
close fit with customer expectations
greater responsiveness to changes in customer needs
disadvantages
regular changes to products may leave customers confused
business may struggle to keep up with product-orientated businesses that invest heavily in the quality of their product
customers may care more about higher quality products
product orientated
approach means the business develops products based on what it is good at making or doing rather than what the customer wants
advantages
high quality products may draw customers in
disadvantages
product might be admired but not sell very well as they're not appealing to customer demand
primary research
is data gathered first hand that is specifically designed and obtained
online surveys
- automatically feeds the info into a database but they have low response rates so can give a distorted picture
face to face surveys
are personal interviews conducted. They are costly but useful as you can get more in depth answers
observation
- watching customers to see how they behave when buying goods. This is time-consuming and costly but can reveal customer views
focus groups
are getting groups of potential customers together. They give detailed qualitative info but can be expensive
pros
up to date and tailored to businesses needs
cons
difficult to collect
expensive
time-consuming
bias
secondary research
involves using data collected by someone else
government data
- free to obtain and free from bias. However, this can be out of date and all businesses have access to it
competitors data
- such as profit figures is very cheap and shows how rivals are doing. However, its usually of very little value as every business can see it
qualitative research
research based on views and opinions
pros
essential for new launches
focused on customer wants and needs
highlights issues
effective at testing new marketing mix elements
cons
expensive to collect
based on opinions and may be bias
quantitative research
based on numerical data
pros
easy to analyse
insights to relevant trends
can be compared easily
cons
doesn't explain why
may lack reliability
sampling
is gathering data from a set of respondents, the results of which should be representative of the population
benefits
can provide useful insights
can reduce risks and costs
flexible and quick
drawbacks
sample could be unrepresentative
risk of bias in questions
not useful in dynamic markets
use of IT
website surveys
use of social media can help a firm get closer to its customers to gather more info and gain customer loyalty
market segmentation
the process of dividing a market into smaller sections which contain customers with similar needs and wants
pros
can spurt rapid growth
can focus on customer needs
helps with marketing mix
retain more customers
can increase prices by targeting a more wealthy market
cons
hard to do in dynamic markets
doesn't mean you can attract the customers in this target market
market positioning
market positioning is the place a product occupies in the consumers mind relative to competing products
market mapping
is a way to display
market map
competitive advantage
of a good or service can be achieved through product differentiation
product differentiation
it's used to insulate the product from the actions of competitors and to allow prices to be increased without a fall in demand
adding value
added value is the difference between the cost of bought-in-goods and services and the selling price of a product
differentiation helps this as you can push prices higher