The market Flashcards
1
Q
what is a mass-market?
A
aimed at a general population with a generic product
2
Q
advantages of operating in a mass-market
A
- EOS
- lower average unit costs
- a large volume of sales = high sales revenue
- this can be used for research and development
3
Q
disadvantages of operating in a mass-market
A
- high competition = competitive on price
- high volume production isn’t flexible to demand changes
- homogenous products need to be differentiated through marketing this can be expensive
4
Q
what is a niche market?
A
a subset of the main market; addresses specialist needs
5
Q
advantages of operating in a niche market
A
- high-profit margins can charge a premium price
- small-scale production so can be flexible and follow trends
- less competition in mass markets
- customers tend to be more loyal
- better communication with customers
6
Q
disadvantages of operating in a niche market
A
-very risky as demand may not be constant
- higher unit costs so no EOS
- limited numbers of potential customers
businesses will have to compete on quality and customisation in order to succeed
- over dependence on one product
- vulnerable to market changes
7
Q
define risk
A
the possibility that things will go wrong
8
Q
define uncertainty
A
the unpredictable and uncontrollable events that affect business
