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 and capacity + potential for economies of scale. Success usually associated with low-cost (highly efficient) operation or market leading brands.
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
Lack of economies of scale. 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 of annual sales or volume sold per year.
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 / Total sales x 100.
Formula for market growth
Change / Sold (in previous year) x 100.
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.
