markets Flashcards
(39 cards)
what is the definition of markets
A meeting place between buyers and sellers where goods and services are exchanged, usually for money
what is market share
The percentage of the total revenue or sales in a market that a company’s business makes up
how is market share calculated?
(sales of a business ÷ total sales in market) x 100
why is market share important?
- can indicate if a business is a market leader
- influence strategy
- show success or failure of a business
what are the benefits of high market share?
- achieve objectives
- greater profitability
- economies of scale
- competitive advantage
- attract shareholders
what is global marketing?
selling goods/services to overseas markets using varied strategies based of regional differences
what are the advantages of global marketing?
- higher earnings
- spread risk
- economies of scale
- saturation of home market
how do businesses respond to seasonal markets?
- seasonal promotions
- marketing planning in advance
- stock changes
what are seasonal markets?
markets with changing demand during specific times e.g. ice cream in summer
what is mass marketing?
- targeting a whole market with standardised products and broad marketing
- e.g. tea bags, ITV
what are the advantages of mass marketing?
- lower unit cost
- untargeted marketing can be used e.g. national newspapers
- low-cost operations e.g. heavy promotion
disadvantages of mass marketing
- business must be able to mass produce goods (expensive)
- if demand falls business will be left with unused resources
- products need to be different from competition as it can be fierce
what is a niche market?
targeting a small, specific market segment underserved by large competitors
what are the advantages of niche marketing?
- charge higher prices that customers are prepared to pay
- avoid competition
- can provide a better service as they can focus on customers
- low promotion costs
disadvantages of niche marketing?
- can attract competition
- niche markets cannot have multiple competitors
- cannot benefit from economies of scale
- risks cannot be spread
- hard to expand
- limited profit
what is market segmentation?
dividing a market into subgroups with similar characteristics to better target products
what are the methods of segmentation?
- demographic (age, gender, class)
- geographic (region, urban/rural)
- psychographic (lifestyle)
what are the benefits of segmentation to consumers?
- better fit lifestyle and budget
- stick with desired principles
- receive a product closer to expectations
what are the benefits of segmentation to businesses
- accurate targeting
- less waste
- brand loyalty
- higher profits
what are the rules of market segmentation?
- segments must be recognisable
- must be different from other other segments
- must be big
- be targetable
what is a monopoly?
a single producer within a market (100% of market place)
what are characteristics of a monopoly?
- single producer
- barriers to entry
- price makers
- any business with over 25%
what is an oligopoly?
there are many businesses but only a few dominate
what are the characteristics of an oligopoly?
- more choice
- strong bran identity
- price wars
- some barriers to entry
