markets

Question 1

what is a market?

Answer 1

a place where buyers and sellers meet to exchange goods or services

Question 2

what is a mass market?

Answer 2

where a business sells to the whole market and markets the product to all consumers in the same way

Question 3

what is a niche market?

Answer 3

this is when a business targets a small segment of the overall market that has very specific needs and wants

Question 4

what are the advantages to niche markets?

Answer 4

-lower levels of competition
-a higher price can be charged
-possible to build strong customer loyalty

Question 5

what are the disadvantages to niche markets?

Answer 5

-potentially lower profits as the market is smaller
-a change in customer tastes could make the niche disappear

Question 6

what are the advantages of mass markets?

Answer 6

• more potential sales as wide market
• less risky as there are more customers to target

Question 7

what are the disadvantages of mass markets?

Answer 7

• more competition
• product harder to personalise
• needs to be able to operate on a larger scale meaning costs could be very high

Question 8

what is the calculation for market share?

Answer 8

sales of one product
______________________ x 100
total market sales

Question 9

what is market segmentation?

Answer 9

the process of subdividing a market into identifiable segments or subgroups having similar needs , wants , or characteristics

Question 10

what are the 3 categories for market segmentation?

Answer 10

demographic
psychographic
geographic

Question 11

what are the positives of market segmentation?

Answer 11

-greater knowledge about its customers
- customers feel valued that their needs are targeted so it improves loyalty
-allows a business to sell more products and increase profits
-allows a business to make a wider range of products

Question 12

what are the potential drawbacks of market segmentation?

Answer 12

-splitting the market into groups means more time spent on different marketing campaigns
-targeting only one segment can be risky as a change in customer tastes could lead to a loss in sales

Question 13

what are the benefits to the customer of market segmentation?

Answer 13

-can receive a product closer to their expectations
- can fit better with their budget or lifestyle

Question 14

what is a monopoly?

Answer 14

when there is one business in the market or one with 25% market share