Markets Flashcards
What is a mass market?
- when the good/service appeals to a large part of the market
- universal appeal
- marketing to all possible consumers
- generic brands
What is a niche market?
- smaller segment of a larger market
- sales will be lower but prices will be higher
- identify the needs of the consumer
- specialised products / services
What are the advantages of a mass market?
- higher sales
- large market
- lower risk
- costs less to produce
What is a market?
Any place where business and customers can meet to exchange goods or services
What are the disadvantages of a mass market?
- usually lower selling price
- competition
- possible higher overheads
- harder to personalise
What are the advantages of a niche market?
- higher prices
- repeat purchasing
- tailored to specific consumers
- unique
What are the disadvantages of a niche market?
- lower sales
- smaller market
- possible higher costs
How can market size be estimated?
Can be calculated by the total sales of all businesses in the market
What is market share and how is it calculated?
It is a term used to describe the proportion of a market that is held by a business
Sale of a business / total sales in market X100
What is the difference between a dynamic market and a static market?
Dynamic - always changing
Static - doesn’t change
What makes a market change?
Competition
Technology
Customer needs and wants
Advantages of online trading
More convenient for the customer
Makes you a stronger competitor
Disadvantages of online trading
Doesn’t allow you to build a relationship with the customers
Harder to get repeat custom
What is competition?
Occurs when two or more businesses act independently to supply goods and services to the same group of consumers
What is direct competition?
When businesses produce similar products
What is indirect competition?
When different businesses make / sell products not in direct competition but compete for the same consumer expenditure
Examples of direct competition
Similar prices
Opening hours
Customer service
Examples of indirect competition
DVD shop and a cinema
Music shop and iTunes
What is market research?
The action or activity of gathering information about consumers needs or preferences
Why do businesses do market research?
Businesses need to make sure they do market research as it can reveal where customers are starting to lose faith in a product or service
Primary research examples
Interviews
Observation
Questionnaire
Secondary research examples
Internet
Trade press
Government data
Books
Primary research advantages
Personal opinion First hand Unique Specific Up to date Reliable
Primary research disadvantages
Time consuming
Money (costs) expensive
Bias is a possibility
