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Questions and Answers
What does McDonald's refer to as the 'Experience of the Future'?
What does McDonald's refer to as the 'Experience of the Future'?
A modernized customer restaurant experience that features innovative customer service concepts, such as self-ordering kiosks, cashless transaction convenience, table service, digital boards and high-speed Wi-Fi connectivity.
What is the management task of marketing?
What is the management task of marketing?
Identifying and meeting the needs of customers profitably by getting the right product at the right place at the right time.
What are some examples of marketing objectives?
What are some examples of marketing objectives?
Marketing objectives should be linked to corporate objectives.
Marketing objectives should be linked to corporate objectives.
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Marketing objectives should be determined by junior management.
Marketing objectives should be determined by junior management.
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Marketing objectives should not be realistic.
Marketing objectives should not be realistic.
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What are the three reasons why market size is important?
What are the three reasons why market size is important?
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What are the 3 methods of market segmentation?
What are the 3 methods of market segmentation?
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Which of these are considered 'psychographic factors'?
Which of these are considered 'psychographic factors'?
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What does CRM stand for?
What does CRM stand for?
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CRM seeks to gain information about existing customers.
CRM seeks to gain information about existing customers.
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The objective of CRM is to decrease customer loyalty.
The objective of CRM is to decrease customer loyalty.
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The 'Experience of the Future' for McDonald's involved creating a new menu.
The 'Experience of the Future' for McDonald's involved creating a new menu.
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The definition of marketing is solely focused on advertising.
The definition of marketing is solely focused on advertising.
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Market size can be measured in units or value.
Market size can be measured in units or value.
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Market size is only important to assess whether a market is worth entering or not.
Market size is only important to assess whether a market is worth entering or not.
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What is the formula used to calculate market share?
What is the formula used to calculate market share?
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An increase in market share always signifies higher sales.
An increase in market share always signifies higher sales.
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Market share can increase even if sales are stagnant, under certain circumstances.
Market share can increase even if sales are stagnant, under certain circumstances.
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An increase in market share can decrease profitability.
An increase in market share can decrease profitability.
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Market share is best measured by volume.
Market share is best measured by volume.
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The trend is moving away from customer orientation towards product orientation.
The trend is moving away from customer orientation towards product orientation.
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Customer orientation is considered a risky approach for new businesses.
Customer orientation is considered a risky approach for new businesses.
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Marketing strategies are influenced by market objectives.
Marketing strategies are influenced by market objectives.
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Marketing decisions should be made in isolation from the rest of the business.
Marketing decisions should be made in isolation from the rest of the business.
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Businesses that follow a product-oriented approach are often successful.
Businesses that follow a product-oriented approach are often successful.
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Large firms have no need to use niche marketing.
Large firms have no need to use niche marketing.
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The use of differentiated marketing always leads to higher profits.
The use of differentiated marketing always leads to higher profits.
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A niche market is always easier to penetrate than a mass market.
A niche market is always easier to penetrate than a mass market.
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Market segmentation is not effective for small firms.
Market segmentation is not effective for small firms.
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Market segmentation doesn't require market research.
Market segmentation doesn't require market research.
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CRM is generally a low-cost strategy.
CRM is generally a low-cost strategy.
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CRM may be an effective strategy for all businesses.
CRM may be an effective strategy for all businesses.
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CRM can increase customer loyalty but can also lead to higher customer churn.
CRM can increase customer loyalty but can also lead to higher customer churn.
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CRM is a short-term strategy focused on immediate sales.
CRM is a short-term strategy focused on immediate sales.
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Customer segmentation is important for increasing repeat visits by tourists.
Customer segmentation is important for increasing repeat visits by tourists.
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What are the goals set for the marketing department to help the business achieve the overall (corporate) objectives?
What are the goals set for the marketing department to help the business achieve the overall (corporate) objectives?
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What is the management task of identifying and meeting the needs of customers profitably by getting the right product at the right place at the right time?
What is the management task of identifying and meeting the needs of customers profitably by getting the right product at the right place at the right time?
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What is the role of marketing?
What is the role of marketing?
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What are the key aspects to consider when setting effective marketing objectives? (Select all that apply)
What are the key aspects to consider when setting effective marketing objectives? (Select all that apply)
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Marketing objectives can be broken down into regional and product sales targets.
Marketing objectives can be broken down into regional and product sales targets.
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What is the price level at which demand is equal to supply?
What is the price level at which demand is equal to supply?
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What is the quantity of the product that consumers are willing and able to buy at a given price in a specific time period?
What is the quantity of the product that consumers are willing and able to buy at a given price in a specific time period?
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What is the quantity of a product that firms are prepared to supply at a given price in a specific time period?
What is the quantity of a product that firms are prepared to supply at a given price in a specific time period?
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Which of the following factors affect the level of Demand? (Select all that apply)
Which of the following factors affect the level of Demand? (Select all that apply)
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Changes in other factors, such as an increase in consumer income, can result in a new Demand curve.
Changes in other factors, such as an increase in consumer income, can result in a new Demand curve.
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Which of the following factors affect the level of Supply? (Select all that apply)
Which of the following factors affect the level of Supply? (Select all that apply)
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What refers to a subgroup of a whole market in which consumers have similar characteristics?
What refers to a subgroup of a whole market in which consumers have similar characteristics?
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What refers to the selling of products by businesses to other businesses, also known as business to business or B2B?
What refers to the selling of products by businesses to other businesses, also known as business to business or B2B?
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What refers to the selling of products by businesses to the final end user, also known as business to consumer or B2C?
What refers to the selling of products by businesses to the final end user, also known as business to consumer or B2C?
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What are examples of Industrial Markets?
What are examples of Industrial Markets?
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What are examples of Consumer Markets?
What are examples of Consumer Markets?
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What are examples of Local Markets?
What are examples of Local Markets?
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What are examples of International Markets?
What are examples of International Markets?
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What is an outward-looking approach that bases product decisions on consumer demand, as established by market research?
What is an outward-looking approach that bases product decisions on consumer demand, as established by market research?
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What is an inward-looking approach that focuses on making products that can be made- or have been made for a long time - and then trying to sell them?
What is an inward-looking approach that focuses on making products that can be made- or have been made for a long time - and then trying to sell them?
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Traditional product-oriented businesses, which assume there will always be a market for the products they make, are fast disappearing.
Traditional product-oriented businesses, which assume there will always be a market for the products they make, are fast disappearing.
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Customer-oriented businesses are rare but still exist.
Customer-oriented businesses are rare but still exist.
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The chances of newly developed products failing in the market are reduced through the use of effective market research.
The chances of newly developed products failing in the market are reduced through the use of effective market research.
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Products based on consumers' needs will have a longer lifespan and be more profitable than those that are sold using a product-led approach.
Products based on consumers' needs will have a longer lifespan and be more profitable than those that are sold using a product-led approach.
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Market research never ends.
Market research never ends.
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What is the total value (or quantity) of sales of all producers within a market in a given time period?
What is the total value (or quantity) of sales of all producers within a market in a given time period?
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What is the percentage change in the total size of the market (volume or value) over a period of time?
What is the percentage change in the total size of the market (volume or value) over a period of time?
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What is the brand with the highest share of the market?
What is the brand with the highest share of the market?
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Market size can be measured in two ways: quantity of sales and value of products sold.
Market size can be measured in two ways: quantity of sales and value of products sold.
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Market size is important for 3 reasons: to assess whether a market is worth entering, calculate market share, and identify market growth.
Market size is important for 3 reasons: to assess whether a market is worth entering, calculate market share, and identify market growth.
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Entering a rapidly growing market is always a good idea.
Entering a rapidly growing market is always a good idea.
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What are factors that affect market growth? (Select all that apply)
What are factors that affect market growth? (Select all that apply)
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If a business's market share remains the same, sales will increase in a market with reduced growth.
If a business's market share remains the same, sales will increase in a market with reduced growth.
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In a slow-growing market, competitors might reduce prices to increase sales.
In a slow-growing market, competitors might reduce prices to increase sales.
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Lower prices always result in lower profit per unit.
Lower prices always result in lower profit per unit.
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Businesses might consider expanding into faster-growing markets.
Businesses might consider expanding into faster-growing markets.
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Market share is a measure of the relative success of one business's marketing strategy against those of its competitors.
Market share is a measure of the relative success of one business's marketing strategy against those of its competitors.
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An increase in Market Share always indicates higher sales for a business.
An increase in Market Share always indicates higher sales for a business.
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Retailers are more likely to stock and promote a brand that is the market leader.
Retailers are more likely to stock and promote a brand that is the market leader.
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Market share measured in value terms is always a more accurate reflection of a business's performance than market share measured in volume.
Market share measured in value terms is always a more accurate reflection of a business's performance than market share measured in volume.
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What is the identification of different groups of customers with common needs within a market and the marketing of different products or services to those consumer groups?
What is the identification of different groups of customers with common needs within a market and the marketing of different products or services to those consumer groups?
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Successful market segmentation requires a business to have a clear analysis of the consumers and its target market.
Successful market segmentation requires a business to have a clear analysis of the consumers and its target market.
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What is a quantified picture of a business's consumers showing data about their age groups, income levels, location, gender and social class?
What is a quantified picture of a business's consumers showing data about their age groups, income levels, location, gender and social class?
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What are the three methods of market segmentation? (Select all that apply)
What are the three methods of market segmentation? (Select all that apply)
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Consumer tastes often vary between different geographic areas.
Consumer tastes often vary between different geographic areas.
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Accurate and detailed market research is not essential before entering international markets.
Accurate and detailed market research is not essential before entering international markets.
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Income and social class are important demographic factors that identify socioeconomic groups and can be used to segment the market.
Income and social class are important demographic factors that identify socioeconomic groups and can be used to segment the market.
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Psychographic factors refer to differences between people's lifestyles, personalities, values and attitudes
Psychographic factors refer to differences between people's lifestyles, personalities, values and attitudes
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Market segmentation can help businesses to design and produce goods that are specifically aimed at their target market.
Market segmentation can help businesses to design and produce goods that are specifically aimed at their target market.
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Market segmentation can help businesses to identify and exploit gaps in the market.
Market segmentation can help businesses to identify and exploit gaps in the market.
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Market segmentation can help businesses to avoid wasting money on trying to sell products to the whole market.
Market segmentation can help businesses to avoid wasting money on trying to sell products to the whole market.
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Market segmentation is not helpful for small firms that are unable to compete in the whole market.
Market segmentation is not helpful for small firms that are unable to compete in the whole market.
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Price discrimination between consumer groups can be used to increase revenue and profits.
Price discrimination between consumer groups can be used to increase revenue and profits.
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Research and development and production costs might be lower as a result of needing to make and market different product variations.
Research and development and production costs might be lower as a result of needing to make and market different product variations.
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Promotional costs might be lower as different advertisements and promotions might be needed for different segments.
Promotional costs might be lower as different advertisements and promotions might be needed for different segments.
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Production and inventory holding costs will be lower than for producing and selling just one undifferentiated product.
Production and inventory holding costs will be lower than for producing and selling just one undifferentiated product.
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By focusing on one or two limited market segments, excessive specialisation could lead to problems if consumers in those segments change their purchasing habits significantly.
By focusing on one or two limited market segments, excessive specialisation could lead to problems if consumers in those segments change their purchasing habits significantly.
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Extensive market research is not needed to identify market segments and their needs.
Extensive market research is not needed to identify market segments and their needs.
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What is using marketing activities to build and establish good customer relationships so that the loyalty of existing customers can be maintained?
What is using marketing activities to build and establish good customer relationships so that the loyalty of existing customers can be maintained?
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The heart of CRM involves communication with customers to gain information.
The heart of CRM involves communication with customers to gain information.
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The objective of CRM is to develop customer loyalty to ensure the customers buy from the business in the future.
The objective of CRM is to develop customer loyalty to ensure the customers buy from the business in the future.
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Targeted marketing and customer service are not essential to building customer loyalty
Targeted marketing and customer service are not essential to building customer loyalty
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IT systems and software are not essential for CRM.
IT systems and software are not essential for CRM.
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Effective CRM campaigns rarely require the use of an external marketing consultancy.
Effective CRM campaigns rarely require the use of an external marketing consultancy.
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CRM is effective for businesses with a strong existing customer base.
CRM is effective for businesses with a strong existing customer base.
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CRM is not a sustainable strategy.
CRM is not a sustainable strategy.
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Study Notes
Nature of Marketing
- Marketing is essential for understanding and meeting customer needs profitably. It involves selecting suitable products, ensuring accessibility, and timing marketing efforts, which are critical for effective customer engagement.
- Marketing objectives align with overall corporate objectives.
- Key aspects of marketing objectives include measurable increases in market share, total sales, customer loyalty, and brand identity.
- Effective marketing objectives are realistic, motivating, achievable, and clearly communicated to other departments.
- Marketing objectives are important for providing clear direction and for helping a business achieve its overall corporate targets.
- Marketing involves a range of related management functions, including market research, product design/packaging, pricing, advertising, and distribution, and customer service.
- The McDonald's case study in Malaysia demonstrates the importance of clear marketing objectives.
Demand and Supply
- Demand: The quantity of a product that consumers are willing and able to buy at a given price during a specific time period.
- Supply: The quantity of a product that firms are prepared to supply at a given price during a specific time period.
- Equilibrium price: The price at which demand equals supply.
- Factors influencing demand include consumer income, prices of substitute/complementary goods, population size/structure, fashion/taste, and advertising/promotion spending.
- Factors influencing supply include production costs, government taxes/subsidies, weather conditions, and technological advancements.
- Changes in these factors can shift the demand and supply curves leading to changes in market prices.
- Demand varies with price; for normal goods, quantity demanded rises when prices fall.
Markets
- Markets are platforms where buyers and sellers meet to exchange goods/services.
- Markets aren't always physical locations; online platforms are also markets.
- Market segments consist of customers with similar needs, often with specific characteristics like age, location, lifestyle, etc.
- Types of Markets: potential, target, industrial, and consumer.
- Industrial markets involve business-to-business (B2B) sales of products.
- Consumer markets involve business-to-consumer (B2C) sales of products to the end user.
- Markets can be local, national, or international.
Customer & Product Orientation
- Customer orientation: Bases product decisions on consumer needs as defined by market research. Requires research to understand present and future demand, and prioritizes customer needs.
- Product orientation: Focuses on manufacturing existing or previously developed products and then attempting to sell them to a larger market.
- Customer orientation is an outward-looking approach focusing on consumer demand, while product orientation is inward-looking, focusing on creating and selling products.
Market Size & Growth
- Market size: The total value (or quantity) of sales of all producers in a market within a given time period. Measured by sales quantity (units sold) or sales value (revenue).
- Market growth: Percentage change in the total market size (volume or value) over a given time period.
- Measuring market size & growth helps businesses evaluate market entry potential and calculate their market share.
- Factors affecting market growth include economic growth, consumer income/tastes, and technological changes.
Market Share
- Market share: Percentage of the total market sales held by a particular business in a given time period. Calculated by dividing a business's sales by the total market sales and multiplying by 100.
- An increasing market share typically indicates a more successful marketing strategy compared to competitors.
- Several factors like sales and market growth affect market share. Market share can be calculated by volume or value.
Mass & Niche Marketing
- Mass marketing: Selling standardized products or ranges to the entire market. Focuses on broad appeal and often lower prices.
- Niche marketing: Targeting a small segment of a larger market with specialized products suited to that segment's unique needs. Typically involves higher prices and strong brand loyalty.
- Advantages and disadvantages exist for both strategies.
Market Segmentation
- Market segmentation: Identifying groups of consumers within a larger market who share similar needs and characteristics and tailoring marketing efforts toward those groups.
- Customer profile: Quantified picture of consumers including their age, income, location, gender, and social class.
- Common methods for market segmentation include geographic, demographic, and psychographic segmentation.
- Effective market segmentation requires an accurate understanding of customer needs and characteristics for a particular market.
Customer Relationship Marketing (CRM)
- Customer relationship marketing (CRM): Using marketing activities to build and maintain strong customer relationships to drive customer loyalty.
- CRM emphasizes customer communication to gather information on income, preferences in products, and purchasing histories.
- CRM targets improving customer loyalty for long-term repeat business. CRM is often cost-effective for existing customer bases.
- CRM involves using techniques like targeted marketing, customer service, and communication.
Key Terms
- Product: A good or service offered to the market.
- Corporate objectives: Overall goals of the business.
- Marketing objectives: Specific goals for the marketing department to aid in the achievement of corporate objectives.
- Market: A group of customers who share similar characteristics or needs; it doesn't need to be a physical place.
- Equilibrium price: The price at which demand equals supply.
- Demand: The quantity of a product customers desire and are able to purchase.
- Supply: The quantity of a product firms are prepared to sell.
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Description
This quiz explores the nature of marketing and its objectives, focusing on how businesses can meet customer needs profitably. Additionally, it covers the fundamental principles of demand and supply, including equilibrium price and influencing factors. Test your knowledge on these essential marketing concepts!
