Markets Flashcards
What is a market
A market is a place where buyers and sellers can exchange or transact goods and services.
What is competition
The contest between organizations that provide similar products or services or that target the same audience of consumers. Businesses compete to convert and retain customers, increase revenue and gain more market share.
What are the types of markets
Niche market
Mass market
Trade market
Consumer market
Seasonal market
Local market
Global market
Product/service market
What is a niche market
A niche market is a specialized market segment where you cater
for the demand for products/services that are not currently being supplied by the main suppliers
What is a mass market
Mass marketing involves a business aiming products at a whole market rather than particular parts of them
What is a trade market
Focus on firms, distributors, retailers and wholesalers rather than consumers with the goal of increasing demand with supply chain partners.
What is a consumer market
Focuses on consumers, when individuals purchase products or services for their own personal use.
What is a seasonal market
the process of marketing products or services during special points of the year.
What is a product/service market
Product market is a market where they sell products and service markets is a market where they sell services.
What is a local market
Where goods and services are sold locally as firms are setup there (domestic)
What is a global market
Global marketing is all about selling
goods or services to overseas markets
What is market segmentation
Any subgroup of a larger market, Business’ divide their target markets into segments that have common features/ similar characteristics
How are markets segmented
Psychographic segmentation
Demographic segmentation
Geographical segmentation
What is Psychographic segmentation
Based on characteristics, needs & wants, age, ethnic background, gender, income and occupation
What is demographic segmentation
Based on consumer personality and emotionally based behaviour.
What is geographical segmentation
Based on geographic area, climate, population densities.
What is the importance/ advantages of market segmentation to firms
Firms gain greater knowledge about its customers
Can identify requirements/Match the needs of different groups more precisely
Can target their advertising therefore maximising it’s efforts
Higher profits
Increase brand loyalty as their needs are being met
Types of competition
Competition ranges from:
Perfect competition
Monopolistic competition
Oligopoly competition
Monopoly competition
What are the characteristics of perfect competition
Assumes all products are the same (homogenous)
Consumers have perfect knowledge of the market
No barriers to entry
Large number of small firms
Individual firms are price takers no influence of price of good
Example agriculture
What the characteristics of monopolistic competition
Products are differentiated from others through branding & marketing mix
Few barriers to entry
Relatively large numbers of small firms compete
Example restaurants
What are the characteristics of oligopoly competition
Business tries to differentiate products
Most common type of market
Dominated by small number of large firms
Significant barriers to entry: high startup costs, high advertising
Prices remain stable
Collusion between business to stop new entrants
Example supermarkets
What are the characteristics of monopoly competition
Only a single seller of a unique product
No competition the firm is the whole market
High barriers: high costs etc.
Potential abuse of the position
Why do consumers need protection from exploitation of firms
Consumers need protection as some organisations resort to unfair tactics in order to increase sales and revenue and reduce costs
What do consumers need protection from
Poor quality/unsafe goods - Firms seek to reduce costs this can lead to unsafe products.
substandard services - A substandard service or product is unacceptable because it is below a required standard, firms do this to reduce costs.
misleading information - When advertising some ads can be be misleading and false information
pressurised selling tactics - Some businesses charge a large amount of interest to pressure customers into signing an agreement to purchase goods they don’t want
What is demand
demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given time
What is supply
supply is the amount of a resource that firms and producers are willing and able to provide to the marketplace or to an individual
What is the equalibrium
In a demand and supply diagram is the point when the demand and supply is equal.
Why is demand and supply important in markets
Supply and demand have an important relationship because together they determine the prices and quantities of most goods and services available in a given market.
What is a competitive market
Competitive market - A competitive market is a market where there are numerous producers that compete with one another to provide goods and services for consumers wants and needs
What is the market share
This measures the sales of a firm
relative to the market size
Equation for market share
Sales of business/Total sales in the market x100
Factors of Supply
Productivity
Indirect Taxes
Number of Firms
Technology
Subsidies
Weather
Cost of Production
Factors of demand
Structure of Population
Advertising
Substitutes (price of)
Income – general level
Fashion and Taste
Price level
Complements (price of)
Expectation of consumer
What is the role of an ombudsman service
If a customer has a complaint that in their view has not been satisfactorily
dealt with by the business concerned, the next step in finding redress
might be the Ombudsman Service.
Give the range of competition in order
Perfect - Monopolistic - Oligopoly - monopoly
What are the pros & Cons for niche markets to firms
+
Charge higher prices
Low competition
Promotion costs can stay low
-
Firms that exploit a niche market often bring along competition.
Cannot benefit from economies of scale.
Limited profit as of market size
Benefits to customer of market segmentation
Receive a product closer to their expectations
Make them feel that they are getting there value for money
Because marketing is targeted the consumer is aware of new products/ new features
