Mass and Niche Markets

Question 1

What is the difference between mass markets and niche markets?

Answer 1

• In a mass market, customers’ needs are less “specific” and more “general”
• A niche market is when a business sells a product to a small customer group, in a market which has often been untouched by larger businesses.

Question 2

Give an example of a mass and a niche market

Answer 2

• Mass market - LuLu, Carrefour

- Niche market - Louis Vuitton, Gucci

Question 3

Give two positives of mass and niche markets

Answer 3

• Mass Markets: - Lower risk since resources are focused on one large market.
• It is associated with higher production output and capacity + potential for economies of scale
• Niche Market: Gives you a clear focus since you are targeting a particular group of customers.
• Profit margins are often higher.

Question 4

Give two negatives of mass and niche markets

Answer 4

• Niche Markets-Vulnerable to market changes
• Likely to attract competition if successful
• Mass Markets-Fixed Costs
• Fierce Competition

Question 5

Which two ways can market size be measured?

Answer 5

• By Volume

- By Value

Question 6

What is market share and how is this calculated?

Answer 6

• This is the proportion of a market that is held by a business.
• It is calculated like this: (Sales of a business / total sales in the market) x 100

Question 7

What is a ‘market leader’?

Answer 7

The business who has the most market share in the market.

Question 8

What is meant by a ‘market’?

Answer 8

A market is the place where buyers and sellers meet. Businesses can be categorized depending on which market they operate in.

Question 9

Why is it important for businesses to know their market share?

Answer 9

To know whether their product/s is failing or not so that they know what their next steps are.