1.1.1 the market Flashcards
define market
where buyers meet sellers, either face to face or online
define mass market
the market that is aimed at the general population
define niche market
a subset of the main market and addresses a specialist need
mass market characteristics
a product is sold to all consumers in the same way
mass market pros
large scale production = economies of scale + lower average unit costs.
large volume of sales = high revenues.
mass market cons
lots of competition.
homogenous products need to be differentiated through marketing which can be expensive.
mass marketing process
mass marketing
high sales
mass production
lower costs and higher profits
niche market characteristics
a subset of the main market and caters to a particular segment of the market
niche market pros
charge premium price.
easier to target customers.
small scale production can be flexible and follow trends.
less competition than in the mass markets.
niche market cons
very risky as demand may not be constant.
higher unit costs so no economies of scale
market size
can be measured through:
volume of sales
value
volume of sales
physical quantity of products sold
value
total amount spent by customers
market share
the proportion % of a market that is taken by a business, product or brand
large market share
if a business has a large market share the best way to ensure growth is by boosting the size of the market as a whole
market share formula
sales of x / total sales in whole market x 100
mass market brands
branding is very important in mass marketing to instil loyalty in customers
niche market brands
many niche markets in the car market, mainly at the top end.
customers are looking for a very special car that will turn heads
dynamic markets
one that is subject to rapid or continuous changes
4 key factors of dynamic markets
online retailing.
factors and trends affecting marketing changes.
innovation and market growth.
adapting to change.
online retailing
dynamic market because it inconstantly changing, developing, expanding and offering customers new products and new ways to shop
pros of online retailing
shop is open round the clock.
orders can be taken automatically without the need for staff.
shop can reach international markets easily.
easy to set up.
opportunities for fast growth.
flexible
online retailing cons
71% of customers still prefer to browse online then purchase from a shop.
problems with fraud, spam, viruses.
very competitive market.
owner needs it skills.
issues with online security worries.
issues with sending goods back.
factors and trends affecting markets
all markets are affected by the current business environment.
means the local and national factors that will affect it.
unemployment and levels of affluence / disposable income significantly affect markets
trends affecting business
social
technology
environmental
ethical
competition and the market
very competitive markets benefit the consumer.
more competition = a business needs to be very efficient.
more competition = business needs to listen to consumer needs and wants.
more competition = business is less wasteful.
more competition = must produce a good quality product or service
define risk
when the potential outcomes of a decision are known
define uncertainty
none of the outcomes are known in advance
examples of external influences
a new competitor might enter the market with a better product.
customer tastes change due to new social trends.
new technology.
recession
