1.1 Meeting customer needs Flashcards
What is a market ?
where buyers and sellers meet to exchange goods, now-a-days it is more specific e.g.
*financial markets
*housing markets
*commodity ( raw materials e.g. coal, coffee) markets
What is the mass market ?
A market segment in which a product or service is offered to a large no. if consumers. That have diverse needs and preferences.
What is the niche market?
More specialised segment of the market, characterised by a smaller group of customers with specific needs or preferences .
Examples of a mass market
Coca Cola, Apple
Examples of a niche market
Nomo chocolate, Lefty’s
Characteristics of a mass market
*High volume of sales- due to it being designed to appeal large amount
*Low profit margins- companies can sell products at lower price and still make profit
*Heavily promoted- use of mass media advertising to promote to wide audience
*Wide range of customers- intended for general public
Characteristics of a niche market
*Smaller market size- smaller but still profitable due to high level of demand for specific products
*Specific target audience- targeted at specific group of customers with specific needs inc demographic, psychographic and behavioural characteristics
*Unique products/service- offering things that aren’t widely available
*Personalised marketing- tailored marketing strategies for the target audience
What are the mass market product categories?
Technology, Apparel, Footwear and FMCG
What are Fast moving consumer goods?
Products with rapid consumption at a low cost. They are in high demand due to their frequent purchase
What is diversification?
Selling many different types of products, you meet many needs of consumers
Benefits of working in a mass market
Economies of Scale, stable demand, higher revenue, higher demand, greater marketshare
Drawbacks of working in a mass market
increased competition, price pressure
Benefits of working in a niche market
lower competition, customer loyalty, greater understanding of customer needs
Drawbacks of working in a niche market
limited customer base, limited growth potential, smaller market size
Value of goods
Volume of goods
total revenue of goods sold in particular market
total quantity of goods sold in particular m/i
Market size
Measured by value or volume of product
Can identify opportunities, Help assess competition, helps business planning (eg predict sales)
Market Share
A company or product’s share of a market’s volume or value, shows performance, shows a company’s market position
Calculating Market Share
sales of business /total sales in market x100 = %
Dynamic Market
A market which changes and evolves due to : consumer preferences, tech and competition
Businesses must adapt to compete
E.g. Tech & Fashion are DM
Online Retailing Benefits
Cost effective, Convenient(open 24/7, global access), Measurable Market strategies ( customer date for personalised campaigns), Personalised Pricing, Dynamic Pricing ( changes due to demand)
Online Retailing Drawbacks
Increased competition ( easier to enter market, hard to differentiate), Dependence on tech ( need to have reliable online presence), Returns & Refunds
Market Growth Factors
Economic growth (overall production), Innovation (development), Social Changes, Legalisation Changes, Demographic changes (can change demand and habits)
Adapting to change
Flexibility, Market Research, Investment, Developing niche, Continuous improvement
Competition affecting Market
drives innovation, incline in differentiation, increased marketing and advertising efforts
