Theme 1
Meeting customer needs
definition
equations
, 1.1
• Meeting customer needs
, 1.1.1
the market
• a) Mass markets and niche markets:
o characteristics
o market size and market share
o brands
• b) Dynamic markets:
o Online retailing
o How markets change
o Innovation and market growth
o Adapting to change
• c) How competition affects the market
d) The difference between risk and uncertainty
, • mass – aimed at everyone
Aimed at everyone so advertising is the same, large sales = large revenue lots of competition
• Niche – subset of the market, specialist items
Charge premium prices demand can easily fall, so sales/revenue falls, hard to benefit from EoS
Branding –
Mass – build customer loyalty, differentiate form homogenous products
Niche – premium and pricey, aims at a small group who can afford them
• Market size
Volume %
Value £
• Market share – proportion of market a business has - (sales/total sales of market) x 100
• Dynamic markets – market that is constantly changing
Online retailing – easy to set up, low overheads, flexible hours, competitive, lack of security
• Market growth – size of market changes
• Competition affecting the market –
• Competition means businesses need to be more efficient/productive to gain an advantage → be
more labour productive/efficient → lower unit costs → cheaper costs → reduce price → attract
more customers → more sales and more revenue
• Listening to customer trends → keeps customers loyal → keeps market share → takes sales from
its competitors
• Need to be innovative and maintain high quality products and service
• Risk – outcome is known
• Uncertainty – outcome is unknown
Meeting customer needs
definition
equations
, 1.1
• Meeting customer needs
, 1.1.1
the market
• a) Mass markets and niche markets:
o characteristics
o market size and market share
o brands
• b) Dynamic markets:
o Online retailing
o How markets change
o Innovation and market growth
o Adapting to change
• c) How competition affects the market
d) The difference between risk and uncertainty
, • mass – aimed at everyone
Aimed at everyone so advertising is the same, large sales = large revenue lots of competition
• Niche – subset of the market, specialist items
Charge premium prices demand can easily fall, so sales/revenue falls, hard to benefit from EoS
Branding –
Mass – build customer loyalty, differentiate form homogenous products
Niche – premium and pricey, aims at a small group who can afford them
• Market size
Volume %
Value £
• Market share – proportion of market a business has - (sales/total sales of market) x 100
• Dynamic markets – market that is constantly changing
Online retailing – easy to set up, low overheads, flexible hours, competitive, lack of security
• Market growth – size of market changes
• Competition affecting the market –
• Competition means businesses need to be more efficient/productive to gain an advantage → be
more labour productive/efficient → lower unit costs → cheaper costs → reduce price → attract
more customers → more sales and more revenue
• Listening to customer trends → keeps customers loyal → keeps market share → takes sales from
its competitors
• Need to be innovative and maintain high quality products and service
• Risk – outcome is known
• Uncertainty – outcome is unknown
