MARKETING

Question 1

What is marketing?

Answer 1

Marketing is about getting the right product to the right customer at the right price at the right time.
It is all centered around the customer.

Question 2

Market Orientation

Answer 2

An approach of first establishing consumer demand through market research before producing and selling a product.

Question 3

Benefits of Market Orientation

Answer 3

• Increased confidence that the products will sell. Reduced Risk of Failure.
• Firms can anticipate and respond quickly to changes in the market.
• Firms are in a strong position to meet the challenges of new competitors entering the market.

Question 4

Limitations of Market Orientation

Answer 4

• Resarch can be costly
• Difficult to meet every customer’s needs due to their frequently changing tastes.
• Uncertainity about the future can have a negative influence on the market planning strategy.

Question 5

Product Orientation

Answer 5

Focuses on making the product first before attempting to sell it.

Question 6

Benefits of Product Orientation

Answer 6

• High quality products
• Succeed in industries where the speed of growth is slow and the firm already has a good reputation.
• Confident + Strong beliefs
• Control over their activities

Question 7

Limitations of Product Orientation

Answer 7

• Risk eventual business failure
• Spending money on research + development is costly without any promising results.

Question 8

Product oriented approach

Answer 8

• Inward looking: Focused on making the product first and then trying to sell it.
• Supply creates demand
• Innovative products

Question 9

Market oriented approach

Answer 9

• Outward looking: market research first, then product
• First demand, then supply
• Meet needs + wants

Question 10

Market Share

Answer 10

The percentage of total sales that a business has within an industry. The percentage of one firm’s share of the total sales in the market.

Question 11

Formula for Market Share

Answer 11

Firm’s sales / Total sales in the market x 100

Question 12

Market share can be measured by

Answer 12

1. Volume: Number of goods bought by customers
2. Value: Amount spent by customers

Question 13

Increase in market share means:

Answer 13

• Effective marketing startegies
• Sells more products
• Reduce competitors
• Increased profit
• Key player in the industry

Question 14

Market Growth

Answer 14

Increase in the number of consumers who buy a good or service. Change in market size over a given period of time.

Question 15

Formula for market growth

Answer 15

market size (second year) - market size (first year)/market size first year x 100

Question 16

Market Leader

Answer 16

Measuring market share can indicate if a firm is market leader. A market leader is the firm with the larget market share in a particular industry.

Question 17

Benefits of being a market leader

Answer 17

• First mover advantages
• Increased sales revenues: Higher Profit
• Economies of scale
• Highest quality development partners +innovative technologies = outperform their competition

Question 18

Limitations of being a market leader

Answer 18

• subject of ant trust law suits
• not necessarily the most proftable for an investor, costs are too high