1.1 Flashcards
the market
mass market and niche market definition
mass market = market aimed at the general population, homogenous
niche market = subset of mass market and addresses a specific need
homogenous definition
of the same kind, alike
characteristic of mass markets and pros and cons
marketed to all consumers in the same way
marketed through things like tv ads - reaches large amount of population
+ larger scale production means economies of scale
+ high volume pricing
- high amounts of competition
-
niche market advantages and disadvantages
+ premium pricing
+ easier to target customers
+ small scale production more flexible
+ less competition
-risky as demand is not consistent
- smaller market share possible
2 ways market size measured, why is this helpful?
- volume of sales
2.value (total amount spent by customers)
- look at data and decide whether market is expanding or contracting
market share formula and definiton
(sales of x / total sales in whole market) x100
the proportion of a market held by a business
dynamic market definition
market subject to rapid or continuous changes
online retailing pros and cons
+open all the time
+ orders automatic (no need for staff, lower costs)
+ international markets
+ flexible
+opportunities for fast growth
- issues with delivery
- very competitive markets
how does competition affect
how businesses act
- businesses more efficient
- businesses listening to customer wants and needs
- less wasteful businesses
- quality increase
difference between risk and uncertainty
Risk is the possibility that the business may experience a lower than expected profit or a higher than expected cost.
Whereas uncertainty is not being able to predict external factors due to operating in everchanging environment.
product orientation and market orientation definition
Which is appropriate when
A business is product oriented when it only looks at the product or production process when deciding what to make next.
appropriate when - little competition
- little consumer knowledge eg. iphones
A business is market oriented when it focuses on identifying customer wants and needs and meeting them. eg. fully customizable audi cars
market research helps to
reduce risk
decision making
identify competitors
understand price
understand potential demand
primary market research defintion and types
research you gather yourself
1. customer interviews
2. questionnaires
3. focus groups
4. observation (observing buyer behaviour)
5. test marketing (product offered to a sample)
secondary research
gathering data which already exists
1. government reports
2.trade publications
4, internet
limitations of market research
bias
sample size - inaccurate
time consuming
how does technology affect market research
make the collection of data faster and more specific to individual customers
also processed more effectively to highlight trends and correlations
market segment definition
different market segments?
identifiable group of individuals who share one or more characteristic
1. location
2. demographic
3. lifestyle
4. income
5. age
6. gender
process of
market mapping definition and uses
process of finding variables which differentiate brands in a market and then plotting them in a map
- identifies a gap in the market
- identifies competitors
- helps start up identify where to position itself
ways to achieve competitive advantage of a product or service
1.price leadership
2.Added value
3. innovation
4. reliability
5. quality
6. reputation
7.advertising
8. branding
9. convenience
10. customer service
amount by
added value definition and 3 ways this can be achieved
the amount by which the monetary value of a product or service increased at each stage of production
1.design
2. production
3.marketing
