Markets Flashcards
What is a market?
A market is any place that buyers and sellers will come together to exchange goods or services. There will normally be an exchange of money at a set price.
What is a nature of the market?
Today, markets take numerous forms e.g. local, national, physical or electronic.
What is competition?
The number of businesses operating in the same market. They are competinting to sell the same product to a similar target market.
What are the types of markets?
Local/Global
Mass/Niche
Trade/Consumer
Product/Service
Seasonal
What are ways businesses compete?
New product development
Changing/improving existing products
Promotions
Changing prices
Improving distribution networks including online sales
Quality assurance
Improved customer service – staff training
What are the characteristics of mass markets?
A product is targeted at a wide range of people
The market is not segmented
Products appeal to a wide range of customers
Products are widely available through a range of markets
Mass media is used to advertise the products
What are the characteristics of niche marktets?
Identifying small, currently unsatisfied, gaps in the market
The target market is well defined with distinct characteristics
Promotional activities will be targeted at just a small subsection of the whole market
Can often charge higher prices
What are trade markets?
It is when businesses sell to other businesses
What is a consumer market?
It is when businesses sell to the public
What is market size?
It is the total volume or value of the amount of sales in a market.
Number of units sold x price
What is market share?
This is the proportion of total market sales that a firm has
Sales of one firm/Total market sales x 100
What are market trends?
These are over changes in the market?
What is market segmentation?
It is when the market is split into subgroups of consumers with similar characteristics
What are some methods of market segmentation?
Demographic
Income
Behavioral
Geographic
What are the subgroups for market segmentation?
Age
Gender
Race
Level of education
Religion
Family size
Stage in life
What are the impacts of market segmentation for business and customers?
Advertising can be targeted
The most and least profitable customers can be identified
Least profitable markets can be identified
It easier to identify and launch new products
What are market structure?
It is the number of firms in a market within an industry and the way in which those businesses behave t
What is Perfect competition?
What are the characteristics ?
Perfect competition is a situation where there is a large number of small businesses producing almost the exact same product (HOMOGENEOUS).
Little - to no Barriers to entry
Perfect knowledge of goods and services
No interrelatedness
Price-takers
What is Monopolistic Competition ?
What are the characteristics ?
Monopolistic competition is a situation where there is a large number of RELATIVELY small businesses and there a few entry barriers similar to perfect competition.
Branding
Low barriers to entry
Limited Knowledge
Price-Makers
What is Oligopoly?
What are the characteristics ?
Oligopoly is where there are many firms, but only a few dominate the market. An example would be petrol, beer and detergent.
High entry barriers(Legal,Money)
Very limited Knowledge
high interrelatedness
Price-Makers
What is a monopoly?
What are the characteristics ?
Pure) Monopoly occurs when one business has TOTAL control over a market and is the only seller of the product. An example would be Royal mail or British gas. A legal monopolist is deemed a monopolist if it owns at least 25% of the market.
Near impossible entry barriers
Price-Makers
What is collusion?
Collaboration Secretly to increase prices.(Illegal )
What is demand?
The quantity of goods and services that will be bought at any time given price over a period of time
What is supply?
Supply is the quantity of goods and or services produce to the market at a given price and time
