Mass and niche markets Flashcards
What is a market?
A market refers to all of the buyers and sellers that trade a particular type of product in a particular place for a given price.
Is a market only for businesses to consumers?
No, a market is all of the buyers and sellers trading products for a price, this can include b2b sales and business to consumer sales.
What two main types of markets are there?
Mass and niche markets.
Who are mass and niche market products aimed at and why?
Products in a mass are aimed at a large group of buyers. The product has a wide appeal and is useful to a variety of people, not just small market segments.
Products in a niche market are aimed at a specific group of buyers. The products are specialised to meet specific consumer needs.
E.g dairy milk chocolate and dairy free chocolate (niche).
How do businesses in mass markets cut costs where niche markets cannot?
Businesses in mass markets have higher sales volumes; meaning they benefit from lower costs of production due to EOS. However, this is capital intensive as it requires large amounts of products thus is hard for small businesses to succeed in these markets.
Benefit and drawback of being in a niche.
Businesses in niche markets can take more risks due to narrower customer base. However a change in the market and customer demands could massively impact a niche business as they rely on specific customers.
Less competition and specialised products allows niche businesses to charge more as differentiated.
What is market size?
Market size is the total value of sales or consumers at one time (usually a year.)
What is market share?
A proportion of a businesses hold in a market. It is measured through dividing sales over a time period by total sales in the whole market over the same time period.
Why do market share vary in mass and niche markets.
Mass markets have larger market size than niche, with more businesses. However, each individual business is likely to have less market share in a mass market due to higher competition.
Why is branding important in mass markets?
To succeed in a mass, businesses need a distinctive brand. E.g. a clear and obvious name, logo or statement, that customers can easily recognise; helps to differentiate.
Branding is important in all markets, and can encourage consumers to buy products, effecting market share.
In mass markets, there is less differentiation, so more competition. Meaning businesses may focus more heavily on branding in mass markets.
What may niche market businesses focus on as opposed to branding?
In niche markets, consumers are more likely to care about whether the product meets their specific standards and are less concerned about branding; in any case branding still helps with gaining market share, but can be complicated.
