1.1.1-The market

Question 1

What is a niche marketing?

Answer 1

When a business targets a smaller segment of a larger market where customers have specific needs and wants

Question 2

Advantages and disadvantages of niche marketing

Answer 2

Advantages:
•Less competition
•Often charge higher prices(add value during production)
•Customers tend to be more loyal
•clear focus (target particular customers)
•Build specialist knowledge and skill

Disadvantages:
•Risk of over dependence on one product
•Likely to attract competition if successful
•Vulnerable to market changes/trend changes

Question 3

What is mass marketing?

Answer 3

When a business sells into the largest part of the market where many similar products are offered by competitors

Question 4

Advantages and disadvantages of mass marketing

Answer 4

Advantages:
•widest potential customer base
•Lower risk (resources focused on one large market)
•Relatively low cost of market research
•Higher potential for economies of scale

Disadvantages:
•Higher levels of competition
•Lower profit margins
•Expensive to set up

Question 5

Formula for market growth

Answer 5

Change in market size
———————————x100
original market size

Question 6

What is a dynamic market?

Answer 6

A market which is subject to rapid/continual change

Question 7

What are key reasons for change within a market?

Answer 7

-Customer tastes/preferences
-impact of technology on how and what customers buy
-impact of new market entrants (competition)

Question 8

Formula for market share

Answer 8

Sales of the business
—————————— x100
Total sales in the market

Question 9

The difference between risk and uncertainty

Answer 9

Risk-the possability that things will go wrong
-Can be planned for and managed/assessed
eg.risk of product breaching health and safety

Uncertainty-Caused by unpredictable and uncontrollable events that are beyond the businesses control
eg.Uncertainty about the sales success of a new product launch