The Market Flashcards
Mass markets
this is the market that is aimed at the general population e.g. regular toothpaste
Niche market
this is a subset of the main market and addresses a specialist need e.g. Sensodyne toothpaste for sensitive teeth
Homogeneous
Adjective of the same kind
Mass market characteristics
A product is sold to all consumers in the same way. For example coca cola – one advert made to appeal to everyone
Mass market example
Consumers are not brand loyal in this market, they choose a car based on a logical comparison of features, engine and price
Advantages of mass Market
Large scale production means economies of scale and lower average unit costs
Mass marketing is straightforward as everyone is equally targeted
Disadvantages of mass market
Homogenous products need to be differentiated thorough marketing which can be expensive
Mass market brands
Branding is very important in mass marketing to instil loyalty in customers, but not all mass markets rely on branding (small car market)
Niche market characteristics
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
Niche markets examples
There are many niche markets in the car market, mainly at the top end.
Niche market pros
Charge premium price
✓Easier to target customers
✓Small scale production can be flexible and follow trends ✓Less competition than in the mass markets
Niche market cons
Very risky as demand may not be constant
Higher unit costs so no economies of scale Example: Tokyo old cameras
Niche markets profitability
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.
Market size
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*
Market share
𝑆𝑎𝑙𝑒𝑠 𝑜𝑓 𝑥
x 100
Total sales in whole market
The answer is expressed as a percentage %
Dynamic market
A dynamic market is one that is subject to rapid or continuous changes
Dynamic market taste and fashion
As tastes in fashion change rapidly, so products are made to satisfy these new needs.
Dynamic markets online retailing
Online retailing is a dynamic market because it is constantly changing, developing, expanding and offering customers new products and new ways to shop.
Advantages of online retailing
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
Disadvantages of online retailing
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
Market growth
With dynamic markets, comes constantly changing consumer tastes and preferences
Competition of the market
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
Risk
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
Uncertainty
Uncertainty is when businesses are unable to predict external shocks or future events
