1.1 Flashcards
(32 cards)
What is a dynamic market
A dynamic market is one that is subject to rapid and continuous change in a short period of time
Market share formula
Market share = sales of a business/total sales in market x100
How to adapt in dynamic market?
- Flexibility eg workforce
- Market research
- New tech, ppl and products
ADV of dynamic market
- Forces innovation= opportunity to explot new revenue streams
- Reduces inefficiency as being complacent = failure= decreased market share
DIS of dynamic market
- Can increase costs if a firms is focusing on development of many projects
- If firm cant keep up = reduce market share or failure as they wont adapt to needs of customers
Define niche and mass market
Niche market- small segment of mass market for consumers with specific needs and wants
Mass market- main segment of market that attracts a large number of customers
ADV of niche market
- Lower competition= reduced cost on advertising
- better meet customer needs= higher levels of customer satisfaction= build brand loyalty = able to charge higher prices so higher profits
- Higher prices for goods= higher profit margins
DIS of niche market
- Limited growth due to small customer base
- Relevancy in market as not large segment of market
- Higher cost per unit as in niche you compete on quality
ADV of mass market
- Larger scale production = EOS = lower cost per unit
- Brand awareness unlike niche
- High opportunity for increased profits and revenue
- Growth not limited
DIS of mass market
- High competition= spend large sum of money on advertising and promotion
- Higher costs eg advertising, capital, machinery
- Low prices of products due to them being standardised= maybe higher breakeven point
- Avoid segment= less able to meet every customer needs= less added value= lower prices and lower profits
Characteristics of mass market
- Appeal to large population of market
- Potential for high revenue and profit
- High competition
- Large scale production
Niche market characteristics
- Appeal to smaller segment of market
- High cost of production due to unit costs
- Premium priced
- Produced in small quantities
Competitive advantage definition and ways to achieve
Competitive advantage- set of unique features of a business and its products that are perceived as superior to competition
Innovation,add value,market segmentation,differentiation
Differentiation definition
process of making products unique from competitors products
Also differentiation= USP= increased demand for its products= increase brand loyalty = premium price
Ways to differentiate
- USP
- Brand
- Customer service
- Lower price
Product orientated and market orientated definition
Product orientated- focused on production efficiencies and product itself eg product features
Market orientated- focused on consumer needs, understanding customers and developing products meeting their needs eg customer attitudes
Market segmentation definition
Market segmentation- process of dividing customers within a market into distinguishable groups based on their characteristics and needs
= allows for better positioning and customer targeting= brand loyalty as needs are satisfied
Market map definition and facts
- A tool to see where a product or service sits compared to competitors
- Helps identify gap in market
- Comparing similarities/differences of different products = useful
- Increased understanding of competition
EVAL
- Only considers 2 factors= not accurate as customers more complexed
- gap in market= no guarantee for sucess= may be low demand for that area
Qualitative and quantitative data definition
Qualitative- data expressed as opinions and has descriptive information and is non-numerical
Quantitative data- set of numerical data that can be quantified
Secondary market research definition
Secondary market research- research that is already available and is conducted by another organisation/ individual
eg gov reports, market reports, newspapers
ADV of secondary market research
- Easily accessible and goods starting point
- Fast and less time consuming
- Better for quantitative data
- cheap
DIS of secondary market research
- Some data is free but some reports can be expensive
- Not up to data or reliable
- Not tailored for needs of firm
- Available to competitors
Primary research definition and ADV
Primary research is data collected first hand eg focus groups, questionnaires, interviews
ADV of primary
- Specific to needs of business
- Up-to-date and reliable
- Better for qualitative data
- Good for follow up questions = eg insight on products
DIS of primary research
- Time consuming and expensive
- Hard to get big enough sample size
