1.1.1 The market Flashcards
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what is a mass market?
where a business sells their products to all consumers and markets them in the same way
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what is a niche market?
where a business targets a smaller segment of a larger market, where customers have specific needs and wants
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what are the characteristics of a mass market?
- customers form majority of the market
- customer needs are more general and less specific
- higher output and capacity
- low cost, wide distribution
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what are the characteristics of a niche market?
- loyal customers
- targets small population of the market
- higher profit margins
- lack economies of scale
- can attract competition if successful
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what is market size?
it is measured by value or volume
- value is the total amount spent by customers
- volume is the number of sales
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what is market share?
the percentage of a market which a business controls
market share = sales of a business/total sales in the market X100
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why are brands useful?
- product differentiation
- brand names are given to products to distinguish them from other products on the market
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what is a dynamic market?
a market which is constantly changing
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how does online retailing impact a dynamic market?
- development of technology
- increase in online retailers
- can cause store based retailers to loose market share
- online market shares are predicted to increase
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how does competition affect dynamic market?
- can reduce market share of other companies
- stimulates innovation
- lower prices
- good quality products or services
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what is meant by ‘risk’
risk is the likelihood of a negative outcome and the chance of a business owner loosing a resource they put into the business
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what is meant by ‘uncertainty’?
business operate in an ever-changing environment and are subject to changing external factors such as legal, economic and social factors
