1.1.1 The Market

• What is a market?


  A market is any place where buyers and sellers can meet.
• How do different markets respond to changes?


  Different markets have different characteristics and are affected differently by changes.
• What is the aim of marketing?


  The aim of marketing is to help identify, anticipate and satisfy consumer needs and wants profitably.
• What are needs in marketing?


  Needs are considered to be essential, such as shelter or food.
• What are wants in marketing?


  Wants are desires which are non-essential, even if consumers consider them to be essential.
• Why is market research important for businesses?


  Market research helps businesses identify products/services they can develop in response to customer needs and wants.
• What is market research?


  Market research is the process of systematically gathering data from consumers to influence business decisions.
• What is a mass market?


  A mass market is when products are aimed at broad market segments.
• What is an example of a product aimed at the mass market?


  Kellogg's Corn Flakes is an example of a breakfast cereal aimed at the mass market.
• What are market segments?


  Market segments are groups of consumers who share similar characteristics, such as age or lifestyle.
• What occurs during mass marketing?


  Mass marketing occurs when businesses sell their products to most of the available market.
• How does production differ in mass markets compared to niche markets?


  Production in mass markets usually happens on a large scale, while in niche markets it happens on a small scale.
• What is a niche market?


  A niche market is when products are aimed at a subset of the larger market.
• What is niche marketing?


  Niche marketing occurs when businesses identify and satisfy the demands of a small group of consumers within the wider market.
• What are the characteristics of products in mass markets?


  Products in mass markets are less unique as they are aimed at broad market segments.
• What are the average costs associated with mass market production?


  Mass market production has low average costs due to large scale production economies of scale.
• How do low prices in mass markets affect sales?


  Low prices lead to greater affordability and higher sales volumes, but lower profit margins.
• What is an example of a company that focuses on the mass market?


  Primark is an example of a clothing company that focuses its product on the mass market.
• What are the characteristics of products in niche markets?


  Products in niche markets are more specialized and unique as they are aimed at narrow market segments.
• What are the average costs associated with niche market production?


  Niche market production has high average costs due to small scale production.
• How do high prices in niche markets affect sales?


  High prices make products less affordable and lead to lower sales volumes, but can allow businesses to earn higher profit margins.
• What is an example of a company that targets a niche market?


  Louis Vuitton is an example of a fashion company that aims its products at a niche market.
• How can market size be measured?


  The size of a market can be measured through sales volume or sales value.
• What is sales volume?


  Sales volume is the number of products sold, i.e., the physical number of units sold.
• What is sales revenue?


  Sales revenue is calculated as price multiplied by quantity sold.
• How is market share calculated?


  Market share can be calculated as: sales of a business / total sales in the market x 100.
• What is a brand?


  A brand is a name, image, or logo that helps one product/service stand out from its competitors.
• What is branding?

  Branding is one of the key ways in which businesses achieve product differentiation.
• How are brands protected?


  Brands are unique and are protected by law.
• How do brands add value to products?

  Brands add value by making the product/service more desirable to consumers.
• What is the process of adding value?


  Adding value is the process by which firms increase the price that the consumer is willing to pay.
• How do brands influence a business's market position?


  Brands influence the position of the business within its market.
• How do businesses in mass markets use branding?


  Businesses operating in mass markets use branding to stand out from the competition.
• How do businesses in niche markets use branding?


  Businesses operating in niche markets use branding to communicate their offering to a small, well-defined group of consumers.
• How do strong brands compare to weaker brands in terms of pricing?


  Strong brands are more likely to charge higher prices for their products than weaker brands.
• How does perceived quality differ between strong and weaker brands?


  The perceived quality of a strong brand's products is better than that of weaker brands.
• What is a dynamic market?


  A dynamic market is a market that is subject to rapid or continuous changes.
• Why are some businesses less likely to survive in dynamic markets?


  Businesses that do not adapt are less likely to survive in the long run.
• What is an example of a dynamic market?


  The mobile phone market is a good example of a dynamic market.
• How does monopoly power affect businesses in dynamic markets?


  Businesses with monopoly power might not face the same dynamic pressures as businesses in more competitive markets.