1.1.1 Niche And Mass Marketing Flashcards
What is a market
A place where buyers and sellers meet to exchange goods and services
What is marketing
A range of activities that help a business to sell products
What is niche marketing
Targeting a product of service at a small market segment of a larger market e.g. Rolex
Advantages of nice marketing
- Consumers are prepared to pay a premium price
- Easier to target customers if only selling to one type
- Firms can adapt the goods and services to suit the niche market
Disadvantages of niche marketing
- No benifit from economies of scale such a as bulk buying
- Leaves firms vulnerable to changes in demand as market is small in size
- Successful firms may attract larger firms and be knocked out of the market
What is mass marketing
The process of promotion the sales of larger numbers of a product to the whole market in order to facilitate high levels of production
Advantages of mass marketing
- Firms will use large scale production, benefiting from economies of scale (bulk-buying) which will lower costs of production and increase profit margins.
- The huge revenue derived from sales will allow firms to use the most expensive marketing.
- It increases brand awareness, increasing sales still further.
Disadvantages of mass marketing
- High set-up costs prevent many firms from entering the market.
- If demand suddenly falls, machinery remains unused and the costs of producing each product increases.
- It is impossible to appeal to individual customers directly because mass market products must suit all customers.
What is a brand
A name given to a product to differentiate if from other products
Where is branding most important
Mass markets. - where lots of products compete for market share
Reasons for firms using branding
A. It creates brand loyalty
B. It differentiates the product
C. Charge a higher price
D. To develop an image e.g. sellotape
