Market Characteristics

Question 1

Market size

Answer 1

how big the market of a certain industry or product is. this is measured in total revenue generated by all of the companies involved (e.g. auto industry)

Question 2

Customer base

Answer 2

refers to the potential amount of customers interested in a companies product

Question 3

Barriers to entry

Answer 3

Obstacles that may determine the amount of competition in a certain market

e.g. the oil industry has a high barrier to entry because of high
land, labour and equipment costs

Question 4

Competition

Answer 4

refers to the degree of rivalry or amount of other companies competing in a certain market
e.g. fast food has a lot of competitors

Question 5

Geographic

Answer 5

some markets may be focused in a certain area on earth to make the most sales.
e.g. the boating industry may be more present at shores of big lakes and oceans

Question 6

Demographic

Answer 6

where to position yourself to make the most sales
e.g. a porsche dealer may go to a place with higher income distribution (richer ppl) to sell more product

Question 7

Market growth rate

Answer 7

Refers to the percentage increase in the size of a market with in (usually) a year

higher growth rate may increase the amount of firms in the market

Question 8

seasonal and cyclical

Answer 8

a point in time or season where certain products sell better, for example Christmas product sell best during Christmas

Question 9

market share

Answer 9

refers to a firms share of market

market share equation:
sales revenue times 100 divided by total industry revenue

company with highest market share is called the Brand leader

ways to increase market share
promote brand
develop product
motivate work force

Question 10

Market concertation and ratio

Answer 10

measure degree of competition within a market by calculating market share of largest companies this sum is known as the concentration ratio