The Market

Question 1

Mass markets

Answer 1

this is the market that is aimed at the general population e.g. regular toothpaste

Question 2

Niche market

Answer 2

this is a subset of the main market and addresses a specialist need e.g. Sensodyne toothpaste for sensitive teeth

Question 3

Homogeneous

Answer 3

Adjective of the same kind

Question 4

Mass market characteristics

Answer 4

A product is sold to all consumers in the same way. For example coca cola – one advert made to appeal to everyone

Question 5

Mass market example

Answer 5

Consumers are not brand loyal in this market, they choose a car based on a logical comparison of features, engine and price

Question 6

Advantages of mass Market

Answer 6

Large scale production means economies of scale and lower average unit costs
Mass marketing is straightforward as everyone is equally targeted

Question 7

Disadvantages of mass market

Answer 7

Homogenous products need to be differentiated thorough marketing which can be expensive

Question 8

Mass market brands

Answer 8

Branding is very important in mass marketing to instil loyalty in customers, but not all mass markets rely on branding (small car market)

Question 9

Niche market characteristics

Answer 9

This is a subset of the main market and caters to a particular segment of the market that is not being met by other providers

Question 10

Niche markets examples

Answer 10

There are many niche markets in the car market, mainly at the top end.

Question 11

Niche market pros

Answer 11

Charge premium price
✓Easier to target customers
✓Small scale production can be flexible and follow trends ✓Less competition than in the mass markets

Question 12

Niche market cons

Answer 12

Very risky as demand may not be constant
Higher unit costs so no economies of scale Example: Tokyo old cameras

Question 13

Niche markets profitability

Answer 13

These can be profitable markets to be in, often prices charged are higher as consumers in that niche are willing to pay for exactly the right product.

Question 14

Market size

Answer 14

This can be measured two ways:
1. Volume of sales, or quantity of products sold e.g. 91 million burgers
sold every year**
2. Value, total amount spent by customers e.g. The UK burger bar market is estimated to be worth £3.28billion in 2016*

Question 15

Market share

Answer 15

𝑆𝑎𝑙𝑒𝑠 𝑜𝑓 𝑥
x 100
Total sales in whole market
The answer is expressed as a percentage %

Question 16

Dynamic market

Answer 16

A dynamic market is one that is subject to rapid or continuous changes

Question 17

Dynamic market taste and fashion

Answer 17

As tastes in fashion change rapidly, so products are made to satisfy these new needs.

Question 18

Dynamic markets online retailing

Answer 18

Online retailing is a dynamic market because it is constantly changing, developing, expanding and offering customers new products and new ways to shop.

Question 19

Advantages of online retailing

Answer 19

Shops are open round the clock so they don’t miss critical times when customers can shop e.g. evenings
✓Orders can be taken automatically without the need for staff
✓Shop can reach international markets easily
✓Low overheads, no need for a shop premises
✓Stock can be easily withdrawn or updated to keep up with dynamic market changes in tastes

Question 20

Disadvantages of online retailing

Answer 20

Issues with sending goods back may put customers off
Issues with online security worries put off older customers and those
not keen to share their bank details

Question 21

Market growth

Answer 21

With dynamic markets, comes constantly changing consumer tastes and preferences

Question 22

Competition of the market

Answer 22

More competition means a business needs to be very efficient
2. More competition means the business needs to listen to consumer needs and wants and constantly strive to meet those needs rather than being product orientated

Question 23

Risk

Answer 23

Business risk is the possibility a business will have lower than anticipated profits or experience a loss rather than taking a profit
• Business risk is influenced by; raw material costs, competition, the overall economic climate and government laws e.g. minimum wage

Question 24

Uncertainty

Answer 24

Uncertainty is when businesses are unable to predict external shocks or future events