Markets Flashcards
Markets (Def)
Meeting place between buyers and sellers where goods and services are exchanged.
Market Share (Def)
Measures the sales of a business relative to it’s size.
Market Share (Formula)
(Sales of a Business / Total Sales in a Market) x 100
(Can be financial or in terms of volume)
Importance of Market Share
Helps businesses set and meet their objectives
Helps to compare with competitors
Attractive to Shareholders
Economies of Scale?
Global Markets (Def)
Global marketing refers to the sales of goods and services to overseas markets. Different marketing strategies are implemented based on region/country.
Benefits of Global Marketing
Higher Earnings
Spread the Risk
Economies of scale
Home market is already saturated
Seasonal Markets
Many businesses are strictly bound by seasonality (outdoor swimming pools).
Some get higher experienced sales in some months but still experience revenue throughout the year (Diet Plans in Jan)
B2B Markets
Business to Business markets is the sales to the distributors and wholesalers. Marketing here wants to increase the demand of the goods they sell on a large scale.
Mass Marketing
Aims products at a whole market. ITV, Washing Powder.
Advantages of Mass Marketing
Economies of scale
Untargeted marketing can be used
Low Cost Operations
Disadvantages of Mass Marketing
High Upfront Cost
Vulnerable to a fall in Demand
Need heavily differentiated products or competition is fierce.
Niche Markets
A specialized market segment where demand can be catered for the products and services not being sold by main suppliers.
Advantage of Niche Markets
Can charge premium prices for the short supply
Avoids competition by selling to a new segment
Promotion costs can be lowered
Disadvantages of Niche Markets
Competition is quickly attracted if a business is doing well
Minimal Risk Spread
Highly volatile sales (due to limited customers)
Cannot access economies of scale
Market Segmentation
Breaks the market down into sub-groups that share similar characteristics, that may tailor different products and services toward them.
Demographic Market Segmentation
Gender
Age
Social Class
Geographical Market Segmentation
Rural, Urban, Suburban?
Country - legislation can change products
Psychographic Market Segmentation
Personality and Lifestyle
Culture
Political Voting Preference
Benefits to Customer (Market Segmentation)
Can help their buying patterns match their principles
They are made aware of alterations and new products as the marketing is targeted to them
Benefits to Firm (Market Segmentation)
Can get greater knowledge of their customer base
Target Advertising
Increase Brand Loyalty
Monopoly
-Single Producer in a Market
-High barriers to entry
-No close substitutes
Oligopoply
Market dominated by few big firms but some small firms exist
Monopolistic Competition
Market that is made up of differentiated small firms
Perfect competition
Market made up of a lot of identical small firms
