1.1.1 The Market Flashcards
Definition for Niche Marketing
A smaller segment of a larger market, where customers have specific needs and wants
Definition for Mass Marketing
largest part of the market,
where there are similar products offered by competitors.
Key features of a Mass Market
- Customers form the majority in the market
- Customer needs and wants are less specific
- Associated with higher production output
- low-cost
Advantages of targeting a Niche
- Less competition
- Clear focus - target particular customers
- Can often charge a higher price
- Profit margins often higher
- Customers tend to be more loyal
Disadvantages of targeting a Niche
- Risk of over dependence on a single product or market
- Likely to attract competition if successful
- Vulnerable to market changes
definition for market size
total value of sales in a market over a certain time period. It can also be measured by total number of consumers
key features of Market size
- it indicates the potential sales for a firm
- measured in terms or annual sales
Definition for market growth
measures the rate of change of market size, which might be rising, falling or remaining stable.
Definition for market share
The proportion of the total market that the business holds
formula for market size
total units sold x average price
formula for market share
business share
________________ x 100
total sales
formula for market growth
change
_________ x 100
sold (in previous year )
Branding in Markets
mass markets
- more businesses selling similar products
- more competition
focus heavily on branding
Niche Markets
- consumers interested that product meet particular requirements.
definition for dynamic market
a market that changes and evolves rapidly. eg. camera market
Reasons how markets change
- consumer preferences - eg. fashion or advances in technology
- innovation - growth of some markets and the decline of others
- competitors - entering and leaving the market
