Theme 1: Marketing and people Flashcards
(47 cards)
What is a mass market?
the market that is aimed at the general population and product is sold to all customers in the same way e.g. colgate toothpaste
What is a niche market?
a subset of the main market that addresses a specialist need - caters to a particular segment of the market that is not being met by other providers e.g. sensodyne toothpaste (sensitive teeth)
Mass market (PROS)?
- large scale production means EOS and lower AC
- mass marketing straightforward as everyone is targeted equally
- large volume of sales means high revenue which can be used for R&D
Mass market (CONS)?
- lots of competition
- homogenous: similar products need to be differentiated = expensive
- high volume production is not flexible to changes in demand
Niche market (PROS)?
- profitable markets to be in as can charge premium price
- easier to target customers
- small scale production can be flexible and follow trends
- less competition than in the mass market
Niche market (CONS)?
- very risky as demand may not be consistent
- higher unit costs so no EOS
- profits can often signal more competitors to enter the market
What is market size?
total of all the sales of all the producers in the market:
volume of sales (quantity of products sold)
value (total amount spent by customers)
What is market share?
proportion (%) of a market that has been taken by a business, product or brand
(sales of x) / (total sales in whole market) x100
What is a dynamic market?
one that is subject to rapid or continuous change e.g. shoes - as fashion tastes change rapidly, products are made to satisfy these needs
How do markets change?
- social trends
- technological changes
- competitive environment
- consumer tastes
- demographics
What is online retailing?
the process of buying and selling goods and services over the internet (e-commerce)
Why is online retailing dynamic?
constantly changing, developing, expanding and offering customers to new products and ways to shop
Online retailing (PROS)?
- 24/7 shopping
- lower overhead costs
- access to wider market, reach international markets easily
- easy and flexible
- opportunities for fast growth
Online retailing (CONS)?
- some customers still prefer to purchase from store
- issues with returns/exchange inconvenience can put off customers
- very competitive market
- issues with online security/fraud/scam/viruses
What is market growth?
the percentage (%) increase in the size of the market
(change in size of market) / (original size) x100
What is innovation?
when a new idea or invention is launched into the market normally with views of financial gains
How does competition affect the market?
- business needs to be efficient
- needs to listen consumers, be more market orientated
- produce good quality product/service
- must offer lots of promotions to persuade consumers to switch
What is risk?
possibility that a business will have lower than anticipated profits or experience loss rather than profit
What is uncertainty?
when businesses are unable to predict external shocks or future events, overtime this can affect spending decisions
What is risk influenced by?
- raw materials
- overall economic climate
- competition
- government laws
What is a brand?
a product produced by one business using a specific name, it is a trademark that cannot be copied
What is branding?
the creation of an identity for the business that distinguishes that firm and its products from other firms
Branding (PROS)?
- add value to a product allowing firms to charge higher prices
- customer loyalty and repeat purchase
- brand extension: adding new products to a recognised brand name
What is product orientation?
the product is the most important factor when providing products for the market - innovate designs and put it our onto the market
