Summary Chapter 1 - Meeting customers needs AS level edexcel business studies revision summaries
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Course
Business economics
Institution
Bachillerato
These notes/summaries were made by me personally during the course of Y12, referring to the following book: 9781292239170. These are spectacular notes, which I completed using the indicated book together with other platforms in order to complete the entire syllabus in detail. Finally using these do...
Contents
THE MARKET (1)................................................................................................................... 1
CHARACTERISTICS OF MASS AND NICHE MARKETS...........................................................1
DYNAMIC MARKETS........................................................................................................... 3
MARKET RESEARCH (2)........................................................................................................ 4
PRIMARY RESEARCH.......................................................................................................... 5
SECONDARY RESEARCH.................................................................................................... 5
SAMPLING METHODS......................................................................................................... 6
MARKET POSITIONING (3)..................................................................................................... 7
PRODUCT AND MARKET ORIENTATION..............................................................................7
MARKET POSITIONING....................................................................................................... 8
MARKET SEGMENTATION................................................................................................... 8
PURPOSE OF PRODUCT DIFFERENTIATION......................................................................10
THE MARKET (1)
MARKETS AND MARKETING
Businesses make money by selling their goods and services in the market.
Marketing is the management process responsible for identifying, anticipating, and
satisfying the customers’ requirements profitably. It involves a range of activities that help a
business sell its products:
Identifying the needs and wants of consumers
Designing a product that meets and fulfills such needs
Understanding the threats posed by competitors
Telling customers about their products and persuading them to buy these –
INTERNET and advertisement
Charging the right price
Making the products available in convenient locations.
CHARACTERISTICS OF MASS AND NICHE MARKETS
Mass markets: when a business sells the same products to all consumers and
markets them in the same way; The market for goods that are produced in large
quantities, where customers are less specific about their needs and wants.
ADV:
More potential customers: because mass markets include a much
larger pool of customers, this means businesses can make huge
amounts of sales and so generate high levels of revenue
Lower unit costs: because products are produced in larger quantities,
businesses can exploit economies of scale. As a result, this might
mean prices could be lowered
Save on marketing costs: businesses in mass markets only use one
marketing approach
Brand building and name recognition: as you produce a single
standard product in huge volumes, it makes brand awareness easier.
Less risky: businesses in the mass market are not dependent on a
small group of customers, and risks are avoided.
1
, Business AS revision summaries
Borja Jimenez
DISADV:
Low adaptability: the company does not adapt products according to
consumer tastes and special requirements;
Low-profit margins: The profit margin per unit is low due to low
prices. Low prices might also make the product seem like low value or
bad quality.
Highly competitive: threatening business tend to operate in such
markets. As a result, vast amounts of money have to be spent on
promotion and advertising.
Less attractive to consumers: Low product variety because the
product is standardized and relatively uniform. As a result, it is difficult
to satisfy customer’s specific needs, which may decrease average
customer satisfaction.
Struggle to survive: small companies find it challenging to enter or
survive in the market because of the more limited economies of scale
and intense competition.
Niche markets: It involves selling to a small customer group, sometimes with
specific needs; a small, specialized market for a particular product or service.
ADV:
Less competition: large companies do not want to enter because the
potential profit rate may be low relative to their business size.
Feasible for smaller companies: niche markets are beneficial to
businesses with relatively limited resources. They can survive and
thrive in the market and do not have to compete directly with large
companies in the mass market.
High loyalty: businesses in smaller markets allow good
communication and allow to build strong and close relationships with
customers. Furthermore, because products are made specifically to
fulfill certain needs and characteristics customer satisfaction is likely to
be elevated.
Premium prices: businesses operating in such markets, offer
exclusive products and so they can charge higher and more premium
prices for the products (profit margins increase). Customers normally
link this to quality which provides the business with a good image.
Efficient and easy to control: these businesses have a clear focus
as they target particular customers
Less spends on marketing: marketing in niche markets is highly
targeted so it is more effective, and cost-efficient.
DISADV:
Low economies of scale: because the market is smaller, units are
produced in lower quantities, and so average unit costs increase.
Lower number of sales: Again, because the market is smaller less
customers will buy your products and so it is difficult to earn high
levels of profit
High risks: businesses that rely on a single niche market may be
susceptible, as they are vulnerable to changes in demand.
Limited growth: because the number of targeted customers is
limited, this means business potential growth is affected.
Expensive: If the business is carrying out job production high salaries
will have to paid. Finding a gap in the market is a difficult and costly
task.
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