1.1.2 The market Flashcards
What is a mass market?
A market aimed at the general population
What are the characteristics of a mass market?
Products and services are sold to all customers in the same way with low prices and high sales
What are the 2 pros of a mass market?
-Benefit of economies of scale
-High revenue
What are the cons of a mass market?
-Increased competition
-Not flexible to changes as there’s a high volume of production
What is a niche market?
A section of the market that has a specialist need or desire
What are the characteristics of a niche market?
Caters to a particular segment with low sales and high prices
What are the 2 pros of niche markets?
-Charge a premium price
-Small scale of production can be flexible
What are the 2 cons of a niche market?
-Risky as demand may not be constant
-No economies of scale
What is market share?
A business’s total sales in relation to the overall sales of the industry in which it operates
What is the formula for market share?
Sales of x / total sales in the market x 100
What is a dynamic market?
A market that is rapidly or continuously changing
What are the 3 pros of online retailing?
-24/7 sales can increase revenue
-Low overheads as no shop needed
-can reach international markets
What are the 2 cons of online retailing?
-Online security may put some off
-Comp is aware of business activity and prices
How does increased competition affect the market?
-Businesses need to be efficient
-Businesses must compete on non-price factors
What is a risk?
When the potential outcomes of a decision are unknown
