1.1 - The Market Flashcards
What is a Mass Market?
The market that’s aimed at the general population
e.g. regular toothpaste
What are some Mass Market characteristics?
- products can be sold on a global scale with just a few language tweaks
- product is sold to all consumers in the same way
e. g. Coca Cola, one advert made to appeal to everyone
What are 3 advantages to Mass Markets?
- Large volumes of sales means HIGH REVENUE
- Mass marketing is straight forward as everyone is equally targeted
- Large scale promotion means economies of scale ( when unit costs fall as output rises ) and low average unit costs
What are some Disadvantages to Mass Markets
- Lots of Competition
- Homogeneous products ( ones that are the same ) need to be differentiated through marketing which can be expensive
- High volume production may not be flexible enough to keep up with changes in demand
What is a Niche Market?
A subset of the main market and addresses a specialist need
e.g. sensodyne toothpaste for sensitive teeth
What is 1 Characteristics of Niche Market?
- a particular segment of the market that’s not being met by other providers
What is a Niche Market example?
Supercars
What are 3 Advantages to Niche Market?
- Less competition than Mass Markets
- Charge premium price
- Easier to target customers
What are 2 Disadvantages to Niche Markets
- Very risky as demand many not be constant
- High unit costs so no economies of scale ( when unit costs fall as output rises )
What is Market Size?
The TOTAL of all sales of all the producers in the market
What are 2 ways Market Size can be measured?
- through VALUE
- through VOLUME OF SALES
What is Market Share?
The proportion ( % ) of a market that’s taken by a business
What is the formula to calculate Market Share?
Sales of x / Total sales in whole market X100
What is a Dynamic Market?
One that is subject to a rapid or continuous changes
What are 2 examples of a Dynamic Market?
Shoe Market
- tastes in fashion change rapidly
- products are made to satisfy new needs
Online Retailing
- constantly changing, developing, expanding and offering customers new products and new ways to shop
What are 4 advantages to Online Retailing?
- Open all hours, don’t miss critical shopping times
- Orders can be taken automatically without the need for staff
- Shop can reach international markets easily
- Flexible, owner can be anywhere in the world
What are 4 Disadvantages to Online Retailing?
- Owners need IT skills
- Issues with online security worries put off older customers and those not keen to share their bank details
- Very competitive market
- Customers can be aware of owners business model
What are 3 ways very competitive markets benefit the consumer?
- More competition means a business needs to be very efficient
- More competition means the business needs to listen to consumer needs and wants and constantly strive to meet those needs rather than being product orientated
- More competition means a business must be less wasteful
What is a Business Risk?
The possibility a business will have lower than anticipated profits or experience a loss rather than taking profit.
When you CAN PREDICT the chance of an outcome in the future
Could lead to a lack of job security
What can a Business Risk be influenced by?
Raw materials Costs Competition Overall economic change Government Laws
What is Uncertainty?
When a business are UNABLE TO PREDICT external shocks or future events
