1.1.1 The Market Flashcards
what is a market?
any place where buyers and sellers can meet
what is the aim of marketing?
to help identify, anticipate and satisfy consumer needs and wants profitably.
what is market research?
the process of systematically gathering data from consumers to influence their decisions
what is a mass market?
a market which is aimed at the general population and is large in scale, its types of products are more generalized
benefits of a mass market
- have more customers
- benefit from economies of scale as they have low average costs with large scale production
- build a strong market presence
- lower prices mean greater affordability and higher sales volumes
disadvantages of a mass market
- higher levels of competition
- low prices lead to lower profit margins
- products are similar, they need to differentiate through marketing which can be expensive
what is a niche market?
a market that appeals to a smaller segment of a larger market, it serves customers with specific needs and wants
advantages of a niche market
- less competition, more specific markets
- high prices mean higher profit margins
- customer loyalty
disadvantages of a niche market
- lack of economies of scale - high average costs and small scale of production
- vulnerable to market changes- specific to one thing
- can attract competition if successful
what is a brand?
a good or service that has something which is unique and recogniseable
about a brand
it is more likely to grow if it is easily recognisable and distinctive
strong brands benefit from higher customer loyalty
what is market size
a measure of the total available demand for competitors in a market
about market size
- it indicates the potential sales for a firm
- measured in terms of annual sales or volume sold per year
- measured in volume (units) and value (sales)
what is market growth?
it measures the rate of change of market size
about market growth
- can be rising, falling or remaining stable
- this is a key indicator for existing and potential market entrants
- growth rate is calculated with value (market sales) or volume (units sold)
what is market share?
the share of the total market that is owned by a particular business, product or brand usually measured by amount of sales against other competitors.
what is a dynamic market?
markets that experience rapid and continuous change
sales revenue equation
sales revenue= price x quantity sold
what may cause a business to undergo change
-customers taste and preferences
-impact of technology on what customers buy and how they buy
-impact of new market entrants
what is online retailing?
a dynamic market as it continues to change and develop for customers- selling products via the Internet
benefits of online retailing
business costs are lower- no physical shop to maintain and less staff needed
customers can easily compare prices with other online firms
drawbacks of online retailing
more competition for businesses
consumers cannot physically see the products before purchasing online
what is innovation?
adapting and improving an existing production
how does innovation help businesses?
it helps them to maintain or increase their competitiveness
