1.1.1 The Market

Question 1

Niche Market Advantages

Answer 1

\+ Charge premium price
\+ Easier to target customers
\+ Less Competition
\+ Small scale production - flexible and ability to follow trends
\+ clear focus

Question 2

Niche market Disadvantages

Answer 2

• Risky, demand may not be constant
• Higher unit costs, can’t benefit from economies of scale
• If success attracts competition

Question 3

Mass market advantages

Answer 3

+ Straight forward - everyone is equally targeted
+ Large volume sales
+ Economies of scale

Question 4

Mass market disadvantages

Answer 4

• Competitive
• High volume production - not flexible
• Homogenous products may need to be differentiated through marketing etc

Question 5

Market Size

Answer 5

measure of total available demand for competitors in a marker
indicates potential sales

Question 6

Market Growth

Answer 6

measures rate of change of market size

• key indicator for existing and potential market entrants
• % change
• measured annually
• MARKET SIZE (this period) ÷ MARKET SIZE (last period) - 1 X 100

Question 7

Market Share

Answer 7

How overall market split between competitors %
Good indicator of competitive advantage
Sales of company ÷ sales whole market X 100

Question 8

Dynamic Markets - key sources of change

Answer 8

tastes, technology and new market entrants

Competition

• battle for market share
• pricing
• competitive advantage