The Market (1.1.1) Flashcards
What are the two types of markets in a business?
Niche and Mass Markets
What is a Niche Market?
A Niche Market one that is small and is specialized for a particular product or service that has unique needs. E.g. Pets/Fitness
What are the advantages of a Niche Market? (5 Advantages)
-Can change your price to be more expensive (premium pricing)
-Know what customers to target as specific products
-Low Competition
-High Brand Loyalty
-High Market Share (not many similar=USP)
What are the Disadvantages of a Niche Market? (5 Disadvantages)
-Lower revenue
-Less Sales
-Limited expansion
-Less bulk buying discount
-Eagle eyed competition
What is a Mass Market?
Mass Market is the market for goods that are produced in large quantities. Mass Production
What are the advantages of a Mass Market? (4 Advantages)
-Higher Revenue/Sales
-Brand awareness
-Bulk Buying discount
-Low unit costs
What are the Disadvantages of a Mass Market?(4 Disadvantages)
-If you raise prices people are less likely to buy (price sensitive)
-High Competition
-Low Brand Loyalty
-Variety of Customers
Example of business that moved from Niche to Mass Market and why.
Urban Outfitters has recently started to move more to a Mass Market style because its started to grow more and expand so more common shops and has also started changing its unique brands more. This has meant its started to become more similar to a Niche Market. This can be good because Urban Outfitters can get more sales and revenue however it does loose the USP of the business and could lead to loss of brand loyal customers.
What is a Dynamic Market?
A Market that changes to suit its environment.
What does a Dynamic Market do?+ How can we do this?
Changes to suit the market.Can do this by:
-Need to drive down costs
-Need to maintain competitive price
-Need to innovate create USP’s
-Need to maintain quality
What is an example of a Dynamic Market? (2 Examples)
-Phone Market is constantly changing to suit consumers tastes.
- McDonalds food is constantly changing to suit changes in tastes and dietary changes (vegan/veggie)
It can make it more expensive but but could have a good increase on sales due to more options and gives business a USP for Customers which can be popular.
What are the two types of competition?
Direct and Indirect Competition
What is Direct Competition?
Same Product, Same Customer
E.g. Hellman’s and Heinz Ketchup
What is Indirect Competition?
Different Product, Same Customer
E.g. Mayo and Brown Sauce
What does competition force you as a business to do? (4 Reasons)
It forces you to:
-Improve your Product/Service
-Improve your Productivity/Efficiency
-Spend more on Promotion
-Lower your price
What are the methods of improving your Product/Service? (5 Methods)
-Convenience
-Branding
-Design
-USP
Quality
What are the methods of improving your Productivity/Efficiency? (5 Methods)
-Training Staff
-Financial Motivation
-Empowerment
-Specialization
-Higher Skilled Staff
What are the Methods of Promotion? (5 Methods)
-Advertising
-Sponsorship
-Social Media
-Loyalty Schemes
-Celebrity Endorsement
What does lowering your price do for a business?
-Attracts more budget-friendly customers=Increased Sales
-Increased sales volume may lead to strong word of mouth=Better brand awarness
