1.1.1 The Market Flashcards
(19 cards)
Definition of market
Where trading happens, buyers meet sellers either face-to-face or online
Definition of mass market
A large unsegmented market where mass appeal products are on sale
Definition of a niche market
A smaller segment of a larger market, where customers have specific needs and wants.
Advantages of a mass market
- Large in size
- Less specific target market
- Higher production output and capacity
- Potential for economies of scale
Disadvantages of a mass market
- Increased competition
- Increased need for competitive prices
Advantages of a niche market
- Less competition
- Can charge higher prices
Disadvantages of a niche market
- Smaller market
- Sold in relatively low volumes
- No economies of scale
Market size
- The value / size of the whole market not just the business, what the market is worth (revenue),
- Usually controlled by external factors (customer demand)
- Can be expanded through the marketing efforts of businesses within the market.
Market share
- The percentage of the whole market that a single business / brands revenue is responsible for.
- Gives insight into how much power the business has within the market.
Market share formula
Market share = sales of a business / total sales in market x100
Definition of a brand
A characteristic / name / symbol that differentiates / distinguishes a product from other supplies.
Definition of economies of scale
Where higher levels of production lead to reductions in the cost per unit produced.
Definition of product differentiation
The act of distinguishing goods + services from competitors to make it more attractive to a particular target market.
Definition of dynamic market
Markets that are subject to rapid / continuous change
Key sources of change (dynamic market)
- Customer taste and preferences.
- Impact of technology.
Key factors to consider (dynamic market)
- Online retailing (large change in past years, vital within some markets)
- How markets are changing (consumer preferences, trends)
- Innovation and market growth (product innovation, process innovation)
- Adapting to change (adapting product to new tastes in the market)
Definition of risk
The possibility that things will go wrong, can be assessed + managed
Definition of uncertainty
Unpredictable and uncontrollable events that affect the business
How does competition affect the market ?
It often influences pricing, advertising, product development, and other key aspects of a business
