1.1 MEETING CUSTOMER NEEDS
1.1.1 The market
a) mass markets and niche markets
niche marketing = targeting a product or service at a small segment of a much larger market share
where customers have similar wants and needs
- Products are highly differentiated and production happens on a small scale
- Sales volume tend to be low but high profit margins
- Prices tend to be high
- Few competitors, businesses will have to compete on quality + customisation in order to succeed
Advantages Disadvantages
fewer competitors, as large companies are not Small scale of the market limits the chances of
attracted to a relatively small market. So high profits
businesses can charge a higher price
limited demand may suit a small firm that would Small firms in niche markets can be vulnerable to
lack the resources to produce on a large scale changes in demand
firm can adapt its product to meet the specific Lack of economies of scale lead to higher prices
needs of the niche market instead
can be easier for firms to target customers and An increase in interest may be enough to attract
promote their products effectively larger firms into the market
Mass marketing = aiming a product at all (or most) of the market
- Larger sales volume
- Lower price as intense competition
- Product differentiation used by using elements of the marketing mix
- Requires production a large scale
Advantages Disadvantages
Large scale production is possible, economies Greater investment requires – mass production
of scale leads to lower costs per unit
Large volume of customers enables companies Firms in mass markets are vulnerable to
to earn huge revenues changes in demand (fashion and tastes)
Mass marketing allows firms to use the most It can be difficult to appeal directly to each
expensive marketing, helping to eliminate individual customer because mass market
smaller rivals products must be designed to suit all customers
Mass marketing increases brand awareness
, 1.1 MEETING CUSTOMER NEEDS
Marketing
= the management process involved in identifying, anticipating and satisfying consumer
requirements profitably
Identification – businesses have to understand what customers want to buy
Anticipation – businesses have to understand what customers want in advance
Satisfaction – successful businesses have to build up a customer base (repeat purchase)
The importance of marketing:
o More repeat purchasing
o More likely to tell friends
o More willing to try new products
o Will become loyal to business or product
Marketing involves:
Researching the market and finding out what customers want to buy
Developing and designing a product that satisfies customers’ needs and wants
Producing the right amount and to the right quality specification
Getting the price right so that the product is affordable to customers but also allows the
business to make profit
Making sure that the customer knows about the product through promotion (advertising)
Ensuring the product is on sale in places convenient for the customers to buy it
4P’s
PLACE
PRODUCT
PROMOTION
PRICE
Market share = is the amount of sales achieved by one particular business in relation to the market
as a whole
Market growth = the percentage increase (or decrease) in the market value or volume of the whole
market
Market size = the total sales of all producers/providers within a market, measured by the value
(sales revenue) or volume (units sold)
total sales of firm
market share =
total market sales
change in market sales
market growth =
original total market sales
b) Dynamic markets
= a market which is constantly changing
All markets are dynamic but the pace and nature of change varies considerably by market
Sources of change include change in customer tastes and the impact of new market entrants
1.1.1 The market
a) mass markets and niche markets
niche marketing = targeting a product or service at a small segment of a much larger market share
where customers have similar wants and needs
- Products are highly differentiated and production happens on a small scale
- Sales volume tend to be low but high profit margins
- Prices tend to be high
- Few competitors, businesses will have to compete on quality + customisation in order to succeed
Advantages Disadvantages
fewer competitors, as large companies are not Small scale of the market limits the chances of
attracted to a relatively small market. So high profits
businesses can charge a higher price
limited demand may suit a small firm that would Small firms in niche markets can be vulnerable to
lack the resources to produce on a large scale changes in demand
firm can adapt its product to meet the specific Lack of economies of scale lead to higher prices
needs of the niche market instead
can be easier for firms to target customers and An increase in interest may be enough to attract
promote their products effectively larger firms into the market
Mass marketing = aiming a product at all (or most) of the market
- Larger sales volume
- Lower price as intense competition
- Product differentiation used by using elements of the marketing mix
- Requires production a large scale
Advantages Disadvantages
Large scale production is possible, economies Greater investment requires – mass production
of scale leads to lower costs per unit
Large volume of customers enables companies Firms in mass markets are vulnerable to
to earn huge revenues changes in demand (fashion and tastes)
Mass marketing allows firms to use the most It can be difficult to appeal directly to each
expensive marketing, helping to eliminate individual customer because mass market
smaller rivals products must be designed to suit all customers
Mass marketing increases brand awareness
, 1.1 MEETING CUSTOMER NEEDS
Marketing
= the management process involved in identifying, anticipating and satisfying consumer
requirements profitably
Identification – businesses have to understand what customers want to buy
Anticipation – businesses have to understand what customers want in advance
Satisfaction – successful businesses have to build up a customer base (repeat purchase)
The importance of marketing:
o More repeat purchasing
o More likely to tell friends
o More willing to try new products
o Will become loyal to business or product
Marketing involves:
Researching the market and finding out what customers want to buy
Developing and designing a product that satisfies customers’ needs and wants
Producing the right amount and to the right quality specification
Getting the price right so that the product is affordable to customers but also allows the
business to make profit
Making sure that the customer knows about the product through promotion (advertising)
Ensuring the product is on sale in places convenient for the customers to buy it
4P’s
PLACE
PRODUCT
PROMOTION
PRICE
Market share = is the amount of sales achieved by one particular business in relation to the market
as a whole
Market growth = the percentage increase (or decrease) in the market value or volume of the whole
market
Market size = the total sales of all producers/providers within a market, measured by the value
(sales revenue) or volume (units sold)
total sales of firm
market share =
total market sales
change in market sales
market growth =
original total market sales
b) Dynamic markets
= a market which is constantly changing
All markets are dynamic but the pace and nature of change varies considerably by market
Sources of change include change in customer tastes and the impact of new market entrants
