Lesson 2 : Mass Markets 5/9/24

Question 1

What is the definition of Target Market?

Answer 1

Group of people that you are aiming to sell a product to.

Question 2

What is the definition of Mass Markets?

Answer 2

A large market of customers where products are undifferentiated. The business sells products and services to suit a large number of consumers eg. Milk, mobile devices, Items that everybody buys, there is a large number of customers.

Question 3

What is the definition of undifferentiated?

Answer 3

This means that all products sold in a mass market are broadly similar to each other.

Question 4

Advantages of Mass Markets - Purchasing EOS ( Economies of Scale )

Answer 4

• A firm that serves the mass market will typically be a large firm that serves thousands / millions of customers.
• As a result, firms can bulk buy their stock. Supplies will typically give a ‘bulk buying discount’ for bulk orders of stock.
• This lowers a firm’s cost of production.

Question 5

Advantages of Mass Markets - Marketing EOS ( Economies of Scale )

Answer 5

• Adverts impose a single, one off cost to a business.
• Large firms will typically have multiple product lines. Eg. Boots. Even though only one advert has to be paid for, the whole product range can be advertised. This brings down the average cost of marketing.
• Large and small firms have to pay the exact same amount to advertise, however bigger firms have the advantage of being able to advertise more than one product, which lowers the cost of your product.

Question 6

Advantages of Mass Markets - Stable demand patterns

Answer 6

• Forecasting sales is relatively simple in a mass market. This is because the same large group of consumers typically ‘repurchase’ every week / month. Eg. toothpaste. This means that sales patterns for mass market firms are relatively stable which gives the mass market firm eg. colgate, certainty.
• Customers have a very regular purchasing behaviour in regards to products in mass markets. This is useful for these mass market firms since they are able to predict their sales every week, month etc.

Question 7

Advantages of Mass Markets - High sales / Profit

Answer 7

• Sales and profit will typically be high in a mass market.
• This is because thousands / millions of customers will be served.
• This makes operation in a mass market an attractive option for many businesses
• There is a lot of money to be made in the mass market.

Question 8

Disadvantages of Mass Markets - Not responsive to individual customer need

Answer 8

• Products cannot be tailored to suit a specific customer’s taste or requirement. For those customers who want a personalised product / service, they won’t be served by mass market producers.

Question 9

Disadvantages of Mass Markets - High Competition

Answer 9

• As the profit potential in the mass market is enormous, many firms are attracted into the marketplace.
• This means that mass markets are usually highly competitive markets to operate in.

Question 10

Disadvantages of Mass Markets - USP, (Unique selling point/proposition) Required

Answer 10

• This is particularly important in a mass market given the large range of similar, competing products in the marketplace.
• The USP helps the product to stand out and hence attract customers.

Question 11

What is the definition of USP?

Answer 11

A feature of a product that distinguishes it from all other competing products in a marketplace.