Edexcel As Business Topic 1.1 Meeting Customer Needs

Front 1

Adding value

Back 1

• Added value is value of finished output over & above cost of achieving it - i.e. cost of inputs and transformations
• Value can be added by manufacturing, branding, technology and a unique selling point
• Calculated as: Selling Price - Cost of Inputs - Cost of Transformation
  

Front 2

Market mapping

Back 2

• Process of positioning competition within a market by plotting key variables that differentiate products within the market from each other
• A variety of market conditions may be represented on map to identify trends and relationship between consumers & products e.g. price of product vs quality of product
• This can help a business identify problem areas or gaps in product range it produces

Front 3

Market Orientation

Back 3

• Outward-looking approach to new product development where key focus is on what products consumer wants
• Informed by market research
• Business will concentrate on understanding needs of customer & adapting or producing products to meet these
• Reduces, but does not eliminate, risk of new product development
  

Front 4

Market Segmentation

Back 4

• Splitting customers into categories to identify different types of consumer - i.e. by age, gender, location or income
• Demographic segmentation looks at social & economic characteristics of customers
• Geographic segmentation defines market categories based on where people live e.g. regions, cities or neighbourhoods

Front 5

Mass Market

Back 5

• When a firm targets the whole market rather than a particular segment
• Mass marketing can give a business a high volume of sales but often at lower prices
• High degrees of competition may mean a firm has to use tactics such as branding to gain a competitive advantage

Front 6

Niche Market

Back 6

• When a firm targets a small subsection or previously unexploited gap in a larger market
• Being in a niche market may give a business first mover advantage and allow them to charge a premium price

Front 7

Primary Research

Back 7

• Primary market research (field research) involves collection of 1st-hand data that is original i.e. it did not exist before
• Collected for specific needs of the business or entrepreneur so is likely to be more focussed
• May take form of focus groups, observations, questionnaires or surveys

Front 8

Product Orientation

Back 8

• Inward-looking approach to new product development where key focus is on what products can be made & production process
• Informed by scientific research & technical development (R&D)
• Business will concentrate on producing high-quality products and later look at creating a market for them

Front 9

Qualitative Data

Back 9

• The statistical data that informs a company about people's behaviour but does not identify reasons
• Suitable methods of collection include closed questions, observations & surveys

Front 10

Sample size

Back 10

• Size or proportion of whole population chosen as representative of market for market research purposes
• Sampling methods include:

1. Random - proportion of population selected for study. Each individual has equal chance of being selected
2. Quota - limited group of population chosen reflects characteristics of target market
3. Stratified - sample selected from a specific subsection of population

Front 11

Secondary Research

Back 11

• Secondary market research (desk research) already exists, having been undertaken by another organisation
• May not meet exact needs of business but is often more comprehensive than small-scale primary research