1.1.1.The market

• Mass Market:

  • Makes Products and services for all consumers
  • Larger and types of product will be generalised
• Benefits of Mass Market

  • More customers
  • Benefitting from economies of scale
  • Can build a strong market prescence
• Disadvantages of Mass Market:

  • High level of competition
  • Lower profit margins
• Niche Markets

  • Smaller segment
  • Smaller than the mass market
  • focuses on a specialist want or need
• Benefits of a niche market:

  • Less competition
  • Charge premium price
  • customer loyalty
  • Develop specifi expertise
• Disadvantages of niche market:

  • No economies of scle
  • vulnerability as they have an indiverse product portfolio
• Brands

  • A good or service that has somthing which is unique and recognisable
  • could be a different design or feature
• Strong brands:

  • Usually benefit from higher customer loyalty
  • Customers support the brand and will continue to buy repeatedly
  • some consumers will pay higher price for certain brands or logos
• Retailers:

  • Try and stock well known brands
  • Boost profits by developing own brands at a cheaper price point
• Dynamic Market

  A market that is subject to rapid or continous change

  Businesses need to be one step ahead of the competition
• Market size:

  • total of all sales within a market
  • Equation:volume of sales/quantity of products sold
• Market share

  • % of a market taken by a business/product/brand
  • Equation:(sales of x/total market sales) x 100
• Online retailing

  • A dynamic market as the way people purchase goods and services continues to change and develop
  • 51% of purchases are on the web
  • some goods are only available on the web and are known as clicks
  • some retailers were stores first and then developed websites known as bricks and clicks
• Advantanges of online retailing:

  • open round the clock
  • orders can be taken without the need of staff
  • International markets can be reached
  • stock can be easily withdrawn or updated to keep up with dynamic markets
  • easy to set up
  • flexible
  • opportunity for fast growth
• Disadvantages of online retailing

  • Issues/sending goods back disencourage customers
  • Issues with online security
  • Owner needs IT skills
  • Issues with fraud/spam/viruses
• How Markets change:

  • Market can change and develop as a result in advances in technology and as a result of the changing tastes and prefrences of customers
• Innovation

  • Innovatio can be used to maintain or increase their competitivness
  • Can create change within the market as it involves introduction of new and improved products and services
• Responding to the external market:

  • Businesses must identify and respond to changes in the external market
  • Businesses that operate in dynmic markets must be able to respond to changing customer tastes and preferences
• Impact of competition

  • Competion can affect a business' costs and demands as the prescence of competitors may reduce demand for a business' product or service
  • Can force a business to reduce their prices or increase their sales and marketing spend
• Rising costs:

  • Presence of a competitor can aso increase business costs as a business may increase its spending on promotion and advertising or may invest in research and development to improve products for sale
• Risk of failure:

  • starting a new company is risky as they are most likely to fail in their early days
  • Face the risk that consumers may not want to buy their product especially if its new
• Financial Loss:

  • New business' require a lot of investment
  • Failure means a huge financial loss
• Lack of security

  • Entreprenuers often loose the security they had with their job in terms of regular wages
• Uncertainty

  • when a business can not know how a situation will turn out due to lack of information
• Risk:

  • A chance somthing could go wrong & not end up as expected