The Market(1.1.1) Flashcards
What is a mass market?
sells the same products to the general population and markets them all in the same way
e.g. Coca-Cola
What is a niche market?
small market segment- selling to a small customer group often with specific wants and needs
e.g. Rolex
What is branding?
what differentiates one product from another
name logo, brand etc
e.g. Nike, Adidas
What is a dynamic market?
a market that is subject to rapid or continuous change
e.g. trainers
What is economies of scale?
as a business expands it can increase its scale of output this will likely generate efficiencies that lower their cost of production
What is technical economies?
when growth allows a firm to buy specialised machinery and equipment that will most likely result in lower costs per units
What is diseconomies of scale?
while a firm will continue to increase scale of output it will be eventual that average costs will start to increase
What is market share?
describes the proportion of a particular market that is held by a business product or brand
What is market size?
the number of potential customers that could buy from your business
Two ways market size is estimated
value-total amount spent by customers
volume-sales or physical quantity of product sold
Market share equation
sales of a business
——————————— x100
total sales in a market
Niche market advantages
small customer base-easier to respond to demand
customer service
meeting needs
following trends
less competition-more control on market/industry-may see more products
Niche market disadvantages
less demand-not as constant-less safe revenue-less cash flow
higher production cost-no economies of scale
Mass market advantages
mass marketing-lots of customers-everyone is targeted-larger sale revenue-higher value of profit
high revenues-invest back into business
research and development
Mass market disadvantages
lots of competition-more expenditure marketing-distinct from competition
high volume of production-mass production
more difficult to respond to demand-damage customer base
What are the four area of dynamic markets?
online retailing
how markets change
innovation and market growth
adapting to change
What is online retailing?
selling through the means of the internet
e.g. clothes through SHEIN
Advantages of online retailing
accessible 24/7-convenient for customers-meets wants and needs
data collection-primary research market
price discounts online-more repeat customers-higher sales revenue
attracts more customers-more advertisement
Disadvantages of online retailing
high cost to maintain and develop-security and protection
high competition-distinct website/app- very expensive
lack of customer service-less personal
return complicationa
How the market changes factors
Political factors e.g. imports/exports
Economic factors e.g. interest rates
Social factors e.g. changing tastes and preferences
Technological factors e.g. apps
Legal factors e.g. e-cigg/vaping restrictions and regulations
Environmental factors e.g. electric/hybrid cars
What is competition?
when two or more businesses enter the market and bring goods to sell
What is direct competition?
sells the same product or service
e.g. Nike and Adidas
What is indirect cometition?
competing for disposable income
e.g. cinemas, DVD shops, streaming services
What can increased competition create?
The need to drive down costs e.g. more efficient process
Develop innovative products and services e.g. focused R&D,
Push for excellent marketing which would supersede rivals e.g. creative, enticing advertising
High quality products and services e.g. sleek design, intended performance with updates
