1.1.1 The Market Flashcards
Define market
a market is a place where buyers and sellers come together to exchange goods and services usually for money at a set pice
define mass market
mass market is when a business targets a large target market e.g milk
define niche
niche market is when a business targets a smaller segment of the market e.g football shoes
what are the key features of a mass market
- customers for the majority of the market
- economies of scale (bulk buying
- customers needs and wants are more general and less specific
- success is usually associated with low cost operation or market-leading brands
what are the key features of a niche market
- can often charge higher prices
- target market is well defined with distinct characteristics
- identifying small unsatisfactory gaps in the market
- promotional activities will be targeted at a small sub section of the market.
what are the benefits of mass-market
- widest potential customer base
- lower risk
- low unit costs form economies of scale-bulk buying
- market research cost are cheaper
what are the benefits of niche market
- customers tend to be more loyal
- less competition
- profit margin tends to be higher
- builds specialist skills and knowledge
- can often charge a higher price
- clear focus-target particular customers
what are the benefits of niche market
- customers tend to be more loyal
- less competition
- profit margin tends to be higher
- builds specialist skills and knowledge
- can often charge a higher price
- clear focus-target particular customers
what are the drawbacks of a niche market
- lack of economies of scale - bulk buying
- vulnerable to market changes
- likely to attract competition of successful
- the risk of over dependence on a single product or market
what are the drawbacks of a niche market
- lack of economies of scale - bulk buying
- vulnerable to market changes
- likely to attract competition of successful
- the risk of over dependence on a single product or market
what is market share
the proportion of total market shales that a firm has.This is shown as a percentage
how do you calculate market share?
(sales of one firm/total market sales)x100
what is branding
a brand is a product a business creates using a specific name, logo,shape, colors, symbol
what are the benefits of building a brand
- adds value
- customers/consumers will recognize product
- helps build customer loyalty and repeat business
what are the benefits of building a brand
- adds value
- customers/consumers will recognize product
- helps build customer loyalty and repeat business
what is a dynamic market
a dynamic market is a market that is always changing
what factors might affect the market changing
- trends
- consumer tastes
- competition
- technology
why might a business need to keep up with the dynamic market
if they don’t keep up with the dynamic market they might lose competitiveness
what is the calculation for market growth
(change in market size/original size)x100
what is the definition for innovation
a new idea or invention created which has not been created before
how does competition impact the market
- the price a business is able to charge
- the buying power of the business-supply
- the selling power of the business
- availability of substitutes e.g coca-cola &pepsi
- willingness and ability for new firms to enter the market
what is the difference between risk and uncertainty
risk:
-measurable
-possible to calculate
uncertainty:
-not measurable
-not possible to calculate
