Theme 1 Flashcards
What is a market?
buyers and sellers which trade in a particular market
What are the 2 types of market
mass
niche
what is a mass market
aimed at a large group of buyers. Wide appeal and useful to a variety of people not just a small segment of the population
What is a niche market
aimed at specific group of people. Product is specialised to meet certain needs of buyers in the market
Give examples of mass and niche markets in confectionary market.
Cadbury- mass
Moofree- niche
moo feee sells milk free chocolate
Why does businesses in a mass market have cheaper products
More consumers , so sales volume is higher. They can achieve economies of scale this means products are sold cheaper.
Why do new businesses struggle to survive in a mass market?
New businesses need capital (lots of) they might not have this and struggle
Why are businesses in a niche market more risky than mass market?
they sell to a smaller number of consumers and narrower range of consumers. If there is a change in the market they may struggle to survive
Why can niche markets charge higher prices ?
niche markets sells specialised products this means they can charge higher prices.
What is market size?
total volume of sales in a market over a certain period of time.
How can market size be calculated?
Total consumers in the market
What is market share and how to calculate?
The proportion of the total market a business holds.
business sales
———————- = % answer
total sales in the total market
Why do mass markets have larger market size than niche markets?
There are lots more businesses
What is branding? Why is it important?
Creates a clear logo name and statement. It’s important cos it allows consumed to differentiate their products to consumers
Why do mass markets focus on branding?
mass market businesses sale similar products. so they focus heavily on branding. Niche market consumers focus more on particular requirements met when buying a product
what is a dynamic market + examples
constantly changing market e.g fashion
How can consumer preferences change?
Changes in fashion and advances in technology.
How can markets change?
innovation
change in consumer preferences
the way they want to shop
legislation
How can innovation bring market change?
New products or processes emerge this can lead to growth in some firms and a decline in others. e.g development of digital camera removed polaoirds and disposable camera
How can a change in legislation bring market change?
can affect products sold in a market. 2018 uk government introduced a sugar tax on sugary drinks - many drink manufacturers changed their products so they contained less sugar so they dont have to pay tax
why do businesses need to adapt to changes?
to be successful and maintain and gain market share
what is online retailing?
selling products via the internet
What are 3 benefits to online retailing
less costs to open a store - less staff - saves costs - can lower prices to consumers or keep price same and gain extra profit
convienece - open 24 hours - purchase anytime from anywhere - increases opportunity for sales
customers can easily compare pricing and pick firms with lowest price
3 drawbacks of online retailing
more competition - customers can easily shop around - they can tackle this by making their shopping experience on online stores better than competitors- e.g saving payment details and delivery details
some consumers like too see the products and speak to staff - ways to tackle this includes free returns and online chat services
need to protect fradulent / cyber crimes and transcations and protects consumers personal details - this is expensive and costly