1.1.1 The Market (1/3)

Question 1

Market

Answer 1

Where buyers and sellers come together to exchange goods/services in return for money

Question 2

the 2 types of markets

Answer 2

Mass Markets

Niche Markets

Question 3

Mass Markets

Answer 3

A large market, whereby products with mass appeal are sold to a large group of buyers

Question 4

pros of operating in a mass market - 1

Answer 4

large scale production means a business can achieve lower unit costs by exploiting EOS -> likley result in higher profit margins

Question 5

drawbacks of operating in a mass market - 1

Answer 5

• Lots of competitions (think about the effects on product, price, promotion)

Question 6

Niche Market

Answer 6

Whereby products are aimed at a specific group of buyers.

• product is specialised to meet the particular requirements of the buyers

Question 7

Advantages of operating in niche markets - 2

Answer 7

• Can charge higher prices due to less competition
• can also charge premium prices as focusing on needs of consumers

Question 8

Disadvantages of niche markets - 2

Answer 8

• Risky as you’re relying on a narrow customer base.There demand may change.
• Lack of economies of scale e.g purchasing economies