Markets Flashcards
Market
A place where goods and services are traded.
Types of geographical markets
Global market
National market
Local market
Electronic market
Local market
A market where customers are a short distance from suppliers.
Advantages of a business operating in a local market
Easier to engage in market research
Easier to develop relationships with local customers
Communication with the customer base may be easier and more cost effective
Disadvantages of a business operating in a local market
Market size may be relatively small
Most likely limited opportunities for expansion
National market
A market where customers are dispersed throughout the country or over a large area.
Global market
A market where customers are in more than one country and are scattered around the world.
Advantages of a business operating in a global market
Spread risks
Higher earnings
Economies of scale
Electronic market
A market that does not have a physical presence, but exists in terms of a virtual presence via the internet or other digital media.
Niche market
A small, identifiable segment of a larger market, where customers have specific wants and needs.
Advantages of a niche market
Less competition
Target particular customers
Can often charge a higher price
Customers tend to be more loyal
Disadvantages of a niche market
Lack of economies of scale
Likely to attract competition if successful
Risk of over dependence on a single product or market
Vulnerable to market changes (a change in a factor of demand)
Mass market
A large part of the market, where there are many similar products on offer.
Types of market structures
Monopoly
Oligopoly
Monopolistic competition
Perfect competition
Monopoly
When there is a single producer within a market.
