Business 1.1

• A market is a place where buyers and sellers meet to exchange goods and services for money, for example, the housing market
• A business may want to find out who the competitors are, needs and wants of customers, buying behavior of customers, if the market they're in can be segmented, the prices customers are willing to pay, the size of the market, and if the market's growing.
• Mass market is where a product is aimed at the general population, eg. regular toothpaste
• Niche market is a subset of the main market and the product addresses a specialist need, eg Sensodyne toothpaste for sensitive teeth
• Segmentation is dividing up a large market into smaller groups with similar characteristics so that businesses can target them more effectively
• Some positives of being in a mass market means that there will always be people to buy your products and everyone is easily targeted, there's a larger scale production which means economies of scale and lower average unit costs, large volume of sales which means high revenues and higher profits to be pumped back into the business for research and development.
• Negatives of being in a mass market include that there's lots of competition, similar products also need to be differentiated through marketing which can be expensive and high volume production cant be flexible so cant change if demand changes.
• Features of a niche market includes fewer customers, more specialized products, smaller scale production, and more targeted promotion/advertising.
• Positives of a niche market include less competition, there's a clear focus, it builds up specialist knowledge and skill, you can often charge higher prices, the profit margins are often higher, customers also tend to be more loyal.
• Negatives of a niche market include less opportunity for economies of scale, there's risk of overdependence on one product/small group of customers, it's likely to attract competition if successful, vulnerable to market changes so if something changes, there's risk of low profits and a fall in revenue.
• A brand is a name, term, logo, design or packaging that distinguishes one seller's product to another.
• Benefits of creating a strong brand include the fact that they can increase brand loyalty and brand extension to add new products or services which will gain popularity, even if it's not that popular.