3 Understanding markets 14 Flashcards
What are the 2 types of markets?
Local and national
Local market…
Local businesses focus on the local market
The concern for a owner of a business in the local market is: the level of demand and the level of competition locally
Ask questions like: “how do locals buy the product at the moment?” or “how much completion is there?”
National market…
The businesses focus on the national market
Electronic markets …
Fiercely price competitive, so the companies supplying services have huge pressure to keep their costs as low as possible
Do not rely on physical location
Market is quick and cheap to enter
What are the factors determining demand?
Price, Incomes, Actions of competitors, own marketing activities, Seasonal factors.
Why does price determine demand?
The higher the price, the more people there are who cannot afford it
The higher the price the less good value the item will seem compared with other ways of spending it (1ft/6films)
What is Market Size?
The measurement of all the sales by the companies within a marketplace.
Can be measured by volume and by value
What is Market Share?
The proportion of the total market held by one company or product.
Can be measured by volume but is more often looked at by value
