Theme 1 Topic 9 - The Market Flashcards
Define Niche Marketing
Targeting a relatively small segment of the market
What are three advantages of niche marketing?
Charge higher prices, Less competition, Easier to maintain quality
What are three disadvantages of niche marketing?
Less customers/sales, Changes in demand make them vulnerable, Large firms may join market
Define Mass Marketing
Targeting a large part of the market or the whole market with a product that appeals to a wide range of customers
What are three advantages of mass marketing?
More customers, More profit overall, Smaller businesses unable to enter the market
What are three disadvantages of mass marketing?
Smaller market size, Sell for less, Changes in demand lead to half empty warehouses
Define Market Size
The total sales of all the companies within a market place
What two things can the size of a market be measured by?
Sales volume and Sales value
Define Sales Volume
The number of items sold by all businesses in the market
Define Sales Value
The amount of spending by all the customers in the market
What two ways can market size be calculated?
Adding together the number of items sold by all the different firms operating in the market or Adding together the sales revenue of all the businesses in the market
Define Market Share
The percentage of total market sales held by one firm
Market Share =
The businesses sales/Total market sales x 100
Define Market Leader
The business with the largest market share
Define Dynamic Market
One with the potential to rapidly change
What type of market is online retailing?
Dynamic and unpredictable
What are three advantages of online retail for businesses?
Easy to access market, Reduced overheads, Potential for rapid growth
What are three disadvantages of online retail for businesses?
Website costs, Security and fraud, Customer trust
What are three advantages of online retail for customers?
A wider range of products available, Convenient, Compare prices
What are three disadvantages of online retail for customers?
Can’t see quality before buying, Shipping costs, Delivery time
Define Disruptive Technology
Where new technology has the potential to change the way the market operates
Define Competition
When two or more businesses act independently to supply goods and services to the same group of consumers
What are the two types of competition?
Direct and Indirect
Define Direct Competition
When businesses produce similar products that appeal to the same group of consumers
Define Indirect Competition
When different businesses make or sell products that are not in direct competition but compete for the same consumer expenditure e.g. HMV and Odeon
Most companies operate in highly competitive environments, so what two things do they need to be?
Innovative in improving their product range and Competitively priced
Define Risk
Something that can be planned for - probabilities of outputs are known or at least understood or considered. It is a conscious decision that entrepreneurs will make if the potential rewards are high
Define Uncertainty
Caused by unexpected and often external factors outside of the businesses control
