Markets Flashcards
What is a markt?
A place where buyers and sellers come together to exchange goods and services
Mass market characteristics
- wide range target consumers
-not segmented
-widely available through a range of markets
-mass meda = advertisment
-large productivity- more economies of scale
-lots of competition
-high profit margins
Niche market characteristics
-identify currently unstatisfied gaps in the market
-target consumers
-higher prices
-increased USP
-more consumer loyalty
Niche market advantages
-less competition
-specialist skills/knowledge
-charge higher prices
-clear focus
Drawbacks of niche markets
-lack of economies of scale
-risk of overdependence on a single product/market
-vulnerable to market changes
Market size
Total value or vol of sales in the market
Calc = number of units sold x price
Market share
The propotion of total market sales that a firm has
Calc = sales of one firm/total market sales x 100
Brand definition
A product produced by one business using a specific name
What are reasons branding may be used:
-Differentiate the product from those of rivals
-create customer loyalty
-help product recognition
-develop an image
-charge a premium price when the brand becomes strong
Market share
The proportion or share that is held by a business or a product in a particular market
-sales of a business/ total sales in that particular market x 100%
Key benefits of branding
- added value perspective to consumers
- brand loyalty from cos users (frequent purchasing)
- inelastic demand, ability to charge premium prices
How can a business use brands to differentiate themselves?
- they old undergo various promotions
-very expensive but the financial reward will be worth it - only large corporations can do this creating barriers to entry for new business in the market
- promotions can create product differentiation
How can branding influence price elasticity?
-through Added value that customers perceive with brands, making luxury goods inelastic and less responsive to demand.
How can branding aid product development?
-this makes them already known, brand image already it, consumes more likely to try new products
Example of markets
-consumer markets
-markets for services
-the housing market
-the commodity market - businesses, people buy raw material such as oil, wheat or coffee
-financial markets
Define marketing
It is a process which involves anticipating,identifying and meeting customer needs and wants whilst making a profit.
What are dynamic markets?
Markets which are constantly changing
How can a market being dynamic impact a business?
-a failure to adapt can lead to a collapse in the business
What is online retailing?
This is when businesses sale their goods and services online
Benefits of online retailing?
-retailers ca market their goods based on convenience of consumers
-easier to get personal info from consumers, in order for targeting in the future
-selling costs for example staff wages, overheads, rent avoided
-marketing cost= cheaper
-online = wider reach to consumers
-open 24/7= more convenient
Ways that the market change?
-the size of market
-the nature of market
-new markets
Why does Innovation and market growth occur?
-economic growth
-innovation
-social changes
-changes in legislation
-demographic changes
What is competition?
-this is the rivalry that exists between businesses in market
How do businesses compete?
-lowering prices
-product differentiation
-offering better quality products
-powerful promotions
-offering ‘extras’ e.g high quality customer services
How does the methods for businesses attract customers from competition useful?
All these methods cost money and generally reduce profit
- however businesses most do this to survive in the market
How do consumers benefit from competition?
This increases their variety to purchase
What happens to a business that doesn’t adapt?
-they will lose market share
What might help a business adapt to market changes?
-flexibility - e.g the training of staff for various roles
-market research - help the business keep in touch with consumer needs
-investments -
-continuous improvements
-develop a niche
What is risk?
The possibility that an event could occur
What is uncertainty?
The unpredictable and uncontrolled d events that affect business decisions and actions
