1A.1 Flashcards
What is a niche market
Subset of the main market and addresses a specialist need. e.g toothpaste for sensitive teeth
What is a mass market
The market aimed at a general population. e.g regular toothpaste
What are homogenous products
Similar products that compete in a market. e.g. different brands of yoghurt
Mass market characteristics
A product is marketed to all consumers in the same way. Consumers are not brand loyal in this market, they choose a car based on features and price.
Example of a mass market
The car market is an example of a mass market.
Advantages of operating in a mass-market
-Large scale production means economies of scale and lower average unit costs.
-Mass marketing is straightforward as everyone is equally targeted.
-Large volumes of sales means high rev
Disadvantages of operating in a mass market
-Lots of competition
-Homogenous products need to be differentiated through marketing which can be expensive.
-High volume productions may not be flexible enough to keep up with changes in demand.
Example of a niche market
Super cars, ferrari.
Benefits of operating in a niche market
-Charge premium price
-Small scale production can be flexible and follow trends.
-Less competition
Drawbacks of operating in a niche market
-Very risky as demand may not be constant.
-Higher unit costs, so no economies of scale.
-smaller market size, so fewer potential customers.
What is the market size
The total of all sales of all the producers in that market.
What is a dynamic market
One that is subject to rapid continuous changes.
Example of a dynamic market
Online retailing is a dynamic market because it is constantly changing, developing, expanding and offering customers new products and new ways to shop.
Advantages of online retailing
-Cheaper for retailer.
-Open 24/7
- Dont have to pay shop workers salarys
-Can sell to a wider number of customers
-orders taken automatically
-flexible, owner can be anywhere in the world.
Disadvantages of online retailing
-issues with sending goods back
-Problems with fraud
-very competitive market.