Business theme1

• Mass market

  products are aimed at broad  market segments
• Market segments

  groups of consumers who share similar characteristics 
• Mass marketing

  businesses sell products to most of the available market. Production happens on a large scale
• Niche market

  Products aimed at a subset of the larger market
• Niche marketing

  Businesses identify and satisfy the demands of a small group of consumers within the wider market. Production happens on a small scale.
• Characteristics Mass Markets

  less unique products, lower average costs ( due to economies of scale), low profit margins, greater affordability
• Characteristics of niche market

  .Products more specialised/ unique, High average costs ( do not benefit from economies of scale), less affordable, higher profit margin
• Market size

  Size of a market can be measured though sales volume (number of products sold) or sales value ( sales revenue= price x quantity sold)
• Market share

  proportion of the total sales of a product/ service compared to the market as a whole
• Market share calculation

  sales of a business/ total sales in the market x100
• Brand

  A name, image or logo which helps one product/ service stand out from its competitors
• Features of brands

  Adding value (making product/ service more desirable) which increase the price, communicate their offering, perceived quality
• Dynamic markets

  A market that is subject to rapid or continuous change
• 4 areas to consider when examining dynamic markets

  online retailing, market change, innovation and market growth, adapting to change
• Online retailing

  Selling products via the internet
• Advantages of online retailing

  Access to larger customer base ( internationally), longer trading hours (24/7), lower fixed and variable costs ( no overheads), able to track consumer behaviour ( cheap way to gain primary market research),
• Disadvantages online retailing

  Cost for website development, maintenance and promotion, competition is more accessible, lack of personal contact, desire level of customer service, open consumer to credit card fraud
• Market changes that cause markets to be dynamic

  Changing consumer tastes and preferences, changing demographics, the amount of competition, changing legislation
• Product innovation

  Adaptation or improvement of existing products
• Process innovation

  Adaptation or improvement of existing processes
• Causation of market growth

  increasing population size, increasing incomes, changing tastes and preferences
• Adapting to change

  creating flexible business structures ( in terms of operations/people management), meet customer needs ( use market research and personal service), Invest ( training, new products and process)
• Direct competition

  When the business is targeting customers with the same product as a competitor
• Indirect competition

  Firms sell different products but compete with each other for the customers disposable income
• Competition benefits for customer

  offered lower prices, better quality, better customer service
• The Difference Between Risk & Uncertainty

  Risk is the potential threat to business success

  • Risks can be from inside the business (internal) or from outside the business (external) Uncertainty is when outcomes are difficult to predict
• Product orientation

  focus on the characteristics of the product rather than the needs of the consumer
• Market orientation

  Focuses on the needs of consumers and uses this info to design products that meet customer needs
• What is B2B marketing


  Businesses that promote the sales of products/services to other businesses for use in their operations
• What is a sole trader 


  A business that is owned by one person who has unlimited liability.
• market orientation 


  Business product/services are based around the needs and wants of the customers
• Extension strategy (product life cycle) 


  A method used to lengthen the life/sales of a product/service
• Entrepreneurial motives

  • independence
  • ethical/social stance
  • profit maximisation
• Sponsorship 


  A company giving a product or money to support another business or person
• Opportunity cost 


  the next best alternative forgone when making a decision