1.1.1 The Market

Question 1

What is Mass market?

Answer 1

this is the market that is aimed at the general population e.g. regular toothpaste

Question 2

What is Niche market?

Answer 2

this is a subset of the main market and addresses a specialist need e.g. Sensodyne toothpaste for sensitive teeth

Question 3

What is a homogenous product?

Answer 3

Adjective of the same kind; alike.

For example similar products that compete in a market e.g. different brands of yoghurt

Question 4

What are the Advantages of operating in a mass market?

Answer 4

Straightforward and has no specific target audience
Large volumes of sales means high revenue

Question 5

What are the Disadvantages of operating in a mass market?

Answer 5

Lots of competition
Homogenous products need to be differentiated

Question 6

What are the Niche market pros?

Answer 6

Charge premium price
Easier to target customers
Less competition

Question 7

What are the Niche market cons?

Answer 7

Risky as demand may not be constant
Higher unit costs so no economies of scale

Question 8

What is Market size?

Answer 8

The size of the market is the TOTAL of all the sales of all the producers in that market

1. Volume of sales, or quantity of products sold e.g. 91 million burgers sold every year
2. Value, total amount spent by customers e.g. The UK burger bar market is estimated to be worth £3.28billion in 2016

Question 9

How do you calculate market share?

Answer 9

𝑆𝑎𝑙𝑒𝑠 𝑜𝑓 𝑥/Total sales in whole market x100

Question 10

What are dynamic markets?

Answer 10

A dynamic market is one that is subject to rapid or continuous changes

Question 11

What are the Advantages of online retailing?

Answer 11

-Shops are open round the clock so they don’t miss critical times when customers can shop e.g. evenings
-Orders can be taken automatically without the need for staff

Question 12

What are the Disadvantages of online retailing?

Answer 12

-Issues with sending goods back may put customers off
-Issues with online security worries put off older customers and those
not keen to share their bank details

Question 13

What is Business risk?

Answer 13

the possibility a business will have lower than anticipated profits or experience a loss rather than taking a profit

Question 14

What is Uncertainty?

Answer 14

Uncertainty is when businesses are unable to predict external shocks or future events