Pamela is a sole trader. She started her successful photography business 30 years ago. She specialises in taking pictures of people and places for use in posters, calendars and fashion magazines. It is a niche market. Pamela uses cost-plus pricing as part of her marketing mix. Offering a high quality service is important to Pamela and her 2 employees.
Outline two reasons why offering a high-quality service might be important for Pamela’s business.
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Economic growth in country X has created many opportunities for new businesses such as TGH. TGH manufacture a range of personalised mobile (cell) phone cases using job production. Quality assurance is important to all 8 employees. TGH operate in a niche market. The Marketing Manager uses e-commerce as TGH’s channel of distribution. She is considering ways to build customer relationships.
Outline two reasons why building customer relationships might be important to TGH.
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Identify two ways of segmenting a market.
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Identify two reasons why some markets can become more competitive.
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Identify two benefits to a business of using market segmentation.
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Identify two advantages to a business of maintaining customer loyalty.
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Define ‘mass market’.
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Do you think that more advertising is a better way for a business to respond to increased competition than introducing new products and services? Justify your answer.
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Elton is a sole trader. He sells specialist clothing and equipment for sports, including baseball and hockey. It is a niche market. Elton started his business 5 years ago and it has remained small. A wide range of inventory is important. Elton has been looking at the financial performance of his business. The profit margin for 2018 was 35%. An extract of the accounts is shown in the below table.
Revenue and cost information for Elton’s business for 2018 and 2019 ($) | ||
2018 | 2019 | |
Revenue ($) | 24 000 | 25 000 |
Cost of sales ($) | 7 200 | Y |
Gross profit ($) | 16 800 | 18 000 |
Expenses ($) | 8 400 | 10 000 |
Profit ($) | X | 8 000 |
Explain one advantage and one disadvantage to Elton of operating in a niche market.
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Do you think operating in a niche market will help a small business have a better chance of success than operating in a mass market? Justify your answer.
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Do you think it is a good idea for a business to have only one customer? Justify your answer.
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Do you think offering good customer service is the best way for a small business to build customer relationships? Justify your answer.
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Pamela is a successful entrepreneur. She is the owner of a gift shop selling celebration cards, toys and candy (sweets). When Pamela started her business 30 years ago she had no help to manage the shop. She now has 5 employees. Pamela knows maintaining customer loyalty is important. She uses competitive pricing. Most of her marketing budget is spent on sales promotion. Pamela does not use e-commerce.
Explain two methods Pamela’s business can use to maintain customer loyalty.
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Explain two ways a retail business could respond to increased competition. Which would be the best way to use? Justify your answer.
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Do you think maintaining customer loyalty should be more important to a business than attracting new customers? Justify your answer.
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Do you think entering a growing market where there is a lot of competition is the best way for a business to expand? Justify your answer.
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Consider the following three roles of marketing for ET.
Identifying customer needs
Satisfying customer needs
Maintaining customer loyalty
Which role will be the most important for ET to be successful? Justify your answer.
Refer to the following insert when answering the question
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Consider how the following three factors could affect HealthyMunch's marketing strategy.
Changing customer needs
Increased competition
Use of market segmentation
Which factor is likely to have the greatest impact on HealthyMunch's future success? Justify your answer.
Refer to the following insert when answering the question
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