1.1 Meeting Customer Needs Dynamic markets market size Mass markets Niche markets market share Online retailing Risk and uncertainty Competitive advantage Market mapping Adding value Product differentiation 1.1 Meeting Customer Needs Primary and secondary market research Limitations of market research Quantitative and qualitative Product and market orientation Use of ICT Market segmentation

The UK grocery market was worth £128 billion in 2007 The UK grocery market was worth £128 billion in 2007. Tesco, Asda and Sainsbury were the top three companies with combined sales of £82.4 billion. Tesco’s sales were £40 billion and Asda’s sales £21.5 billion. Calculate the size of Sainsbury in 2007. (2) 2 marks £82.4B – (£40B + £21.5B) = £20.9 billion

Always show your working out when completing calculations. Examiners Tip Always show your working out when completing calculations. It maybe that you only got part of the calculation wrong. Therefore some marks can still be awarded

Using the UK grocery market figures for 2007 given in question 1 calculate the market share of Tesco and the market share of Asda in 2007. (4) 4 marks – 2 marks for each company Tesco £40B × 100 = 31.25% Asda £21.5B × 100 = 16.8% £128B £128B

Blackberry Ltd has sales of £0. 6M. The market is worth £12M Blackberry Ltd has sales of £0.6M. The market is worth £12M. Calculate the market share of Blackberry Ltd. (3) 3 marks £0.6M × 100 = 5% £12M

The UK car market was worth £2. 45 billion in 2007 The UK car market was worth £2.45 billion in 2007. If it were to grow by 5% in 2008 calculate what its market value would be in 2008. (4) 4 marks £2.45B × 5 ÷100 = £0.1225B or £2.45B × 1.05 = £2.5725 billion £2.45B + £0.1225B £2.5725 billion

= write answers that make the connections

+ write chunky paragraphs

therefore… this might mean… on the other hand… By building a logical argument using connectives which in turn… therefore… A consequence of this might be … this might mean… on the other hand… this is because

Here’s an example of how to start building a chain of argument using connectives Effects Explain therefore because makes it easier for the business to develop marketing campaigns that appeal directly to that target market , increasing the chances of the campaign reaching the target audience. the business is only focusing on a small group of customers within a much larger segment. This In addition to this, focusing on a niche market makes it easier for a business to target their marketing

https://www.youtube.com/watch?v=mgKp6DOpTTI

What is meant by the term, adding value? (2 marks)

Added value is.. Adding value is the process of increase the worth of a product or service by transforming or modifying the resources used to make or provide it

Explain one reason why turning potatoes into vodka might be an effective way of adding value? (4 marks)

Once reason why turning potatoes into vodka is an effective way to add value is because it takes a very low cost resource and transforms it into a much more valuable and unique product that can sell for up to £32

Examiners Tip To achieve GOOD application, you need to use the evidence in the case study to SUPPORT your arguments

Introducing......Mammoth Supply Co Focus on market segmentation – read through the case study on the Mammoth Supply Company

Market segmentation is the process of splitting down the market, into different groups of people, with similar characteristics

Assess two benefits of the Mammoth Supply Company targeting a specific market segment (10 marks) Have a go at planning your answer to this question using the template on pg 16

One benefit of the Mammoth Supply Company targeting a specific market segment is This is a benefit to them because Another benefit of the Mammoth Supply Company targeting a specific market segment is the market research that they carried out showed them that men stopped eating diet food after the age of 30 and that there was a gap in this market. by targeting this gap they can therefore benefit from first-mover advantage and develop brand loyalty for the products that they are offering. that by targeting a specific group of people, they can design food that specifically meets their target market. For example, their rum and cola ice cream was created specifically for their target market. by developing food that meets the needs of their target group it is more likely to sell as they would prove more popular with their customer base.

Examiners Tip Again, we can see from the previous example that using the key words in the question can lead to a much more focused and structured answer

Extract A. Online grocery retailing in India India’s grocery market is dominated by small independent shops. Even though there are no longer legal constraints on western companies building supermarkets, no-one has given it a serious try. But suddenly there’s competition. Online grocery store ‘Big Basket’ claims a growth rate of 12 to 16 per cent a month. That could propel its revenue from $33 million in 2014 to $295 million in 2017, according to the company. So far the big online shoppers have been the middle classes, keen to get the Italian herbs or Extra Virgin Olive Oil that would never be stocked by a small independent in India. In the longer term the expectation is to win a ton of business from young, modern, better off consumers. Big Basket is at the heart of this, with its distinctive logo and bright red plastic delivery boxes becoming a trademark of the brand. At Big Basket the key focus is ‘fulfilment’, in other words getting the precisely picked order to the right customer at the agreed time. But of course costs are also important. A huge impediment to profitable trading for supermarkets is the high rents charged in prime locations. Top grocery retailers want great sites, but the high rents make it hard to generate satisfactory profit margins. Online grocers can focus on locations that are cheap – and with space to stock a massive range of goods from around the world. Big Basket stocks 14,000 products and over 1,000 brands. Big Basket has raised $61 million of venture capital investment and is starting to consider a stock market flotation. With 500,000 customers in six of India’s biggest cities, there is still plenty of scope for competitors to see opportunities. One rival, Pepper Tap, is using a different model. Whereas Big Basket has its own huge warehouses to pick stock from, Pepper Tap is really an App allowing mobile ordering sourced from local corner shops. Pepper Tap takes on the cost of online distribution and delivery, but avoids the huge costs of building warehouses and holding vast amounts of stock. Pepper Tap’s model allows for lower prices and free delivery to customers, but Big Basket offers range plus the premium image that comes from a more modern, western operation. Sources: Adapted from Financial Times, June 27th 2015 From being traditionally sleepy, the grocery business in India is changing. Assess two problems for existing firms as the market becomes more dynamic. (8)