1.1.1 The Market

• Niche Market


  Targeting a small segment of the market with a specialist need
• Mass Market


  Targeting customers without specialist needs
• Dynamic Market


  Markets which are constantly changing
• Market Size


  The number of potential customers who could use a product or service
• Market Share

  The percentage of total sales by a company in an industry
• Brand


  A name, product or marker that distinguishes a firm's products
• Risk


  Exposure to factors that decrease profits or business failure
• Uncertainty


  An event that cannot be predicted or influenced by the business that has negative consequences
• Cons of Niche Market

  Inconsistent demand, higher production costs and vulnerable to changes in the market
• Factors Affecting a Dynamic Market


  Social trends, technology, competitiveness, consumer taste, incomes, substitutes and external shocks
• Advantages of Online Retailing


  Use analytics, orders are automatic, easy to start, less fixed costs, stock can be updated easily
• Disadvantages of Online Retailing

  Lots of competition, requires IT skills, competitors know the business model, vulnerable to fraud and viruses
• Benefits of Competition

  Firms maximise output, prioritise consumer needs, less wasteful and produce a higher quality product
• Pros of the Niche Market


  Little competition, charge premium prices, market expertise, flexible production
• Cons of Mass Market


  Lots of competition, homogeneous products differentiate by non-price factors, production is inflexible
• Pros of Mass Market



  Economies of scale, brand recognition, greater revenue, global customers, revenue can reimburse R&D