Markets a - type of markets Flashcards
What are the different market structures separated by?
the levels of competition that exist within each market and the market conditions inn which the business operates
What are the different types of markets?
Monopoly, Oligopoly, Monopolistic Competition and Perfect Competition
What is a monopoly market?
A single producer within a market dominates. They are likely to erect barriers to prevent others from entering their market. They are price makers. They can benefit from economies of scale.
What is an oligopoly market?
Many business but only a few dominate. Each business tends to have differentiated products with strong brand identity. Brand loyalty is encouraged by heavy promotion. Some barriers to entry exist. They an benefit from economies of scale. Will drive down prices to stand out from competition.
What is a monopolistic market?
A large number of relatively small firms in competition with each other. There are few barriers to entry. Products are similar, but differentiated from each other. Brand identity is relatively weak. Business are not price takers; they only have a limited degree of control over the price they charge.
What is a perfect competition market?
large number of businesses competing and no one is large enough to influence the activities of others. No market leaders no price leaders so each business must accept the going price rate. No difference between goods sold by each business (homogenous).
Equal levels of productivity. Customers have full market info. No barriers to entry. These do not exist as they are unrealistic market conditions. It is just a model.
What does B2C mean?
Business to consumers. They sell their goods/services to the consumer markets.
What does B2B mean?
Business to business. They sell their goods/services to other businesses. (Costco example)
What is mass marketing?
When a business targets its advertising and promotional spending at the whole market, not a particular segment. EOS can be taken advantage of because of higher productivity. The cost of setting up and competition in a mass market can be very high.
What is niche marketing?
Where a business targets a smaller segment of a larger market, where customers have specific needs/wants. A higher price can be charged as consumers would be willing to pay it. There must be full understanding of the desires and needs of the consumers. Lower start up costs. They can disappear as a result of economic condition changes.
What is market segmentation?
Any sub-group of a larger market. They are divided by common consumer features/factors.
Types of segmentation
Demographic, Psychographic and Geographic.
What is demographic segmentation?
Segmenting by age, social class, gender and income.
What is psychographic segmentation?
Segmenting by personality and emotionally based behaviour.
What is geographic segmentation?
Segmenting by regions of the country.
