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Theme 1, Part 1 and 2- Meeting Customer Needs and The Market - Coggle…
Theme 1, Part 1 and 2- Meeting Customer Needs and The Market
Market Research
Primary Research:
conducting your own research (eg. questionnaire, surveys)
Pros:
- specific for the business
- data is up to date
Cons:
- can be expensive to conduct
- can be bias
Secondary Research:
using pre existing data someone else collected (eg. the internet, government stats)
Pros:
- free
- provides a good understanding of the market
Cons:
- information may be out of date
- not specific to your business
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Limitations:
- sample size can be too small
- bias within the sample
Market Segmentation Definition:
dividing the market up into subsections of customers who share common characteristics (age, location, income) to help the business understand their target audience better
The Market
Mass Market Definition:
a business that sells a product or service that is aimed at the whole market
Benefits:
- access to a large amount of customers
- high production levels mean lower unit costs and economies of scale
Niche Market Definition:
a small segment of a mass market
Benefits:
- higher selling price
- higher profit margins
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PESTLE:
- Political
- Economic
- Social
- Technological
- Legal
- Environmental
Brands
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Building A Brand:
- advertising
- USP
- sponsorship
- promotion
Benefits:
- added value
- able to charge premium prices
- reduced PED
PED / YED
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Interpreting PED:
- Elastic product= a whole number (1.1, 3.96)
- Inelastic product= decimal number (0.2, 0.75)
Interpreting YED:
- luxury item= elastic= greater than 1
- necessity item= inelastic= greater than 1 but less than 0
- inferior good= less than 0
Adding Value
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How To Add Value:
- better deign than competitors
- slogan
- produce products cheaper
- usp
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