The Market

• Mass market is the market aimed at the general population
• Niche market is a subsect of the main market and addresses a specialist need.
• Homogeneous is an adjective of the same kind
• Niche Market characteristics are:

  • target market have distinct characteristics.
  • promotional activities will be targeted at a small subsect of the whole market.
  • not very competitive.
• Mass Market characteristics are:

  • products made on mass media for a larger customer base.
  • highly competitive.
  • mass media is used to advertise products to appeal to wide range customers.
• Advantages of Mass Market:

  • large scale production means economies of scale and lower average unit costs.
  • mass marketing is straight forward as everyone is equally targeted.
  • large volume of scales mean high revenue.
• Disadvantages of Mass Markets:

  • lots of competition in mass markets.
  • homogeneous products need to be differentiated through marketing which can be expensive.
  • High volume production may not be flexible enough to keep up with changes in demand.
• Examples of Mass Market products:

  • Nike.
  • H&M.
  • Costco.
  • Coca-Cola.
• Advantages of Niche Market:

  • Charge premium prices.
  • small scale production can be flexible and follow trends.
  • less competition.
  • easier to target customers.
• Disadvantages of Niche Market:

  • very risky as demand may not be constant.
  • higher unit costs so no economies of scale.
  • smaller market size , so fewer potential customers.
• Example of different types of markets:

  • Consumer good market.
  • Markets for services.
  • The housing market.
  • Financial markets.
• Market size is the total value or volume of sales in the market.
• The formula for market size is : $No.Sales *$$Price$
• The formula for Market share is: $(business sales)/(Total market sales) *$$100$
• Brands are a name, term, design or logo that distinguishes one sellers product from another.
• Advantages of businesses building a brand:

  • Band Extension which adds new ranges and creates loyal customers.
  • Brand Value which add value to the products.
  • Adding Value which allows business to charge higher prices.
• Dynamic Markets are subject to rapid growth or continuous changes.
• Changes occur in markets because of:

  • social changes.
  • technology changes.
  • competition.
  • consumer taste.
• Online Retailing is the process of buying and selling goods/services over the internet.
• Online Retailing benefits customers because:

  • customers can shop 24/7.
  • Breaks down geographical barriers.
• Online Retailing benefits businesses because:

  • Lower overhead costs (e.g. no expensive rent for stores).
  • Access to wider, potentially, global market.
• Drawbacks for customers with Online Retailing:

  • Fraud issues.
  • Delays in delivery.
  • Lack of shopping experience.
  • Lack of Privacy.
• Drawbacks for businesses with Online Retailing:

  • Added cost of operating an online store.
  • Customers are still wary of online stores.
  • Lack of engagement with customers.
• Advantages of Online Retailing are:

  • Shops are open round the clock so they don't miss critical times when customers can shop.
  • No need for shop premises so low overhead costs.
• Disadvantages of Online Retailing are:

  • Issues with online security worries will put off older customers and those not wanting to share bank details.
  • Problems with fraud, spam and viruses.
• Market Growth is the percentage increase in the size of the market.
• Market Growth formula is:

  $(Original-New)/(Original) *$$100$
• Market Growth occurs because of:

  • Economic Growth.
  • Innovation.
  • Social Changes.
  • Changes in legislation.
  • Demographic changes.
• Economic Growth is an increase in the production of good/services in an economy.
• Innovation is the ability to conceive, develop, deliver and scale new products/services/business model for customers.
• Social Changes is a systemic transformation over time in patterns of thoughts, behaviour, social relationships, institutions and social structure.
• Changes in Legislation is changes in a set of laws put in place by the government to protect businesses, employees and consumers.
• Demographic Changes is any change in the population, like average age, life expectancy and birth rates.
• Competition is the rivalry between two or more businesses in the same market.
• Porters 5 forces are how competitive forces affect profitability.
• Porters 5 forces are:

  • Competitive Rivalry.
  • Power of Suppliers.
  • Power of Consumers.
  • Threat of New Entrants.
  • Threat of Substitutes.
• Competitive Rivalry is how much competition there is in the market.
• Power of Suppliers are how much power the supplier has over the business.
• Power of Consumer is how much power the consumers have over the business.
• Threat of New Entrants are how easy it is for new entrants to enter the market.