Understanding Markets Flashcards
Ways of classifying markets
Geographical classification
Physical and non-physical markets
Other classifications of markets
What is geographical classification
Is based on the geographical area targeted by business organisations e.g. Local markets:plumber
What Is physical and non-physical markets
Based on the way in which products are bought and sold.
Physical markets: an actual place where buyers and sellers meet.
Non-physical markets: selling via the telephone or Internet
Other classifications of markets
Can be classified according to the type of customer know as market segmentation.
Can be classified according to the level of competition i the market.
Demand definition
The amount of a product or service that consumers are willing and able to buy at any given price over a period of time.
Elements that effect demand
Income and wealth Price Marketing and advertising Prices of other goods Tastes and fashion Government action Demographic factors
Market segmentation definition
The classification of customers or potential customers into groups or subgroups, each of which respond differently to different products or marketing approaches.
Types of market segmentation
Age Gender Social class Residential Geographical
Benefits of market segmentation
Can help to... Increase market share Develop new products Extend products into new markets Identify ways of marketing a product
Drawbacks of market segmentation
Difficult in identifying the most important segments for a product
Not knowing how to reach the chosen segment with the firm’s marketing
Being unable to keep up-to-date with the changing views of the target market segment
Potential for ignoring other market segments
Market size definition
The volume of sales of a product or the value of sales of a product
Market growth definition.
The percentage change in sale over a period of time.
Market share
The percentage or proportion of the total sales of a product or service achieved by a firm or a specific brand of a product.
Factors influencing market growth
Economic growth
The nature of the product
Changes in taste and fashion
Social changes
Market share formula
Market share= sales of one product/brand/company ------------------------------------------ Total sales in the market x100
