1. THE MARKET Flashcards
What does marketing involve?
-Identifying and fulfilling consumer wants and needs
- Understanding threats from competitors
-Informing and persuading consumers to purchase your product
- Charging the right price
What is a mass market?
A very large market in which products with mass appeal are targeted
What are some advantages of selling to a mass market?
- Huge consumer base hence ability to amass a vast volume of sales
- Exploitation of economies of scale
- Opportunity of diversification
What are some disadvantages of selling to a mass market?
- Great number of competition hence high advertisement costs
- Low profit margins possible price wars
- Threat of new market entrants and established businesses can increase difficulty of barrier of entry
What is a niche market?
A smaller market segment, usually within a large market or industry , often targeting specific needs of a smaller customer group
What are some advantages of selling to a niche market?
- lack of competition
- opportunity to charge higher prices
- closer customer relations / better relationship leading to customer loyalty
What are some disadvantages of selling to a niche market?
- Lack of economies of scale
- Success in the niche market will likely attract bigger firms hence leading to competition
- More risky as the business relies on a single market hence if they lose touch with the market there is no “back-up” product
How can market size be calculated/estimated?
Value: Total amount spent by consumers buying products
Volume: Physical quantity of products that are produced or sold
Market share is given by:
Sales of a business/total sales in the market x 100%
What is a brand name?
A name, term, sign , symbol , design or any other feature that allows consumers to identify the goods and services of a business and to differentiate themselves from competitors
Branding might be used to:
-Differentiate products from rivalling ones
- Create customer loyalty
- Help product recognition
- Develop a brand image
- Charge a premium price
- Allow for diversification
What is a dynamic market?
Markets subject to change : that grow , shrink, fragment , emerge or completely disappear.
What is e-commerce
The use of electronic systems to sell goods and services
Benefits of offering online retail services?
- Easier to gather customer information to target them with products and offers in future
- Lower operating and selling costs such as sales staff, rent and other overheads can be avoided hence allowing for lower prices
- Lower marketing costs
- Global reach
- Open 24/7
- Greater flexibility in updating stock , prices etc
Market growth may happen because of?
- Economic growth
- Innovation
- Social changes
- Legislative changes
- Demographic changes
