Business

• Niche market


  Targets a smaller segment of a larger market where customers have specific wants and needs
• Niche market


  • Less competitors = more profit to be made
  • Stature of competitors is smaller so you can charge higher price as products are bespoke = more profit, more customer satisfaction more brand loyalty
• Niche market


  • Less potential for growth – only for 1 category of people, smaller customer base and high profits not likely
  • Vulnerable to fall in demand – very critical for business for business survival
  • Limited opportunity for growth
• Mass market


  • Sells into the largest part of the market where customers have less general wants and needs
• Mass market


  • Greater revenue = more sales as there are more customers
  • Benefit from economies of scale
  • Brand awareness – more customers, more exposure as selling on larger scale
• Mass market


  • High start up costs
  • Competition – lots of competitors who may have cheaper prices
  • Prices – cant charge higher prices as products are standardised
• Market size


  Indicates the potential sales for a firm measured in volume or value
• Market growth


  An indicator for existing and potential market entrants can be measured in volume or value
• Percentage change


  new – old divide old x 100
• Market share


  Explains how the overall market is split between the competitors calculated using market value
• Calculating market share


  sales of business divide total sales in market x 100
• Brand


  Recognisable symbol in the market standing out from competitors
• Competitive advantage


  The ability of a business to add more value for its customers than its rivals and attain advantage
• Dynamic market


  • Markets prone to change
  • Key sources of change: Economic growth, Social and demographic changes, Technology, Innovation, Legislation
• Innovation


  The commercially successful exploitation of ideas
• Risk


  Where you can predict the chance of an outcome in the future
• Sources of internal risk

  • Employees – leaving, not trained
  • Health and safety
  • Cyber security
• Risk management


  • Business plan – control finances
  • Market research – targeting appropriate markets, increase dales
  • Training staff – more motivated so wont leave
• Uncertainty


  When you cant predict the chance of an outcome in the future
• Types of uncertainty


  • Economy exchange rates, interest
  • Cultural changes
  • Competition – innovation, prices, expansion
• Competitive environment


  • Lower prices – preventing customers going elsewhere, enables you to remain competitive
  • Improve quality or customer service – meet customer needs, increase sales
  • More convenient location – more outlets, website
• Product orientation


  Business develops based on what its good at
• Product orientation


  • Increased economies of scale, lower unit cost
  • Can focus on what it does best
  • Incentive to invest in production line increasing quality and efficnench = competitive advsntage
• Market orientation


  Business responds to customer needs and wants
• Market orientation


  • If needs and wants are met higher chance of success
  • Increased customer satisfsction
  • Achieve product differentiation
• Primary research


  Data collected first hand for a specific purpose
• Primary research


  • Only you have wccess, trade secrets
  • More detailed insight, find out what you need
• Primary research


  • Expensive
  • Could be hard to get
  • Time consuming
• Secondary research


  Data that already exists and which has been collected for different purposes
• Secondary research


  • Cheap, less time to grt
  • Everyone has access, old, out of date, not tailored to business needs
• Quantitative data


  Concerns with data and addresses questions such as how many, how often
• Quantitative data


  • Based on large samples so more statically valid
  • Easy to analyse
  • Profides insight into relevant trends
  • Can be compared with data from othr sources
• Quantitative data


  • Expensive
  • Time consuming to analyse
  • Doesn't explain why things happen
  • May lack reliability if sample size and method invalid
• Qualitative data


  Based on opinions and beliefs addresses questions such as how, why
• Qualitative data


  • Essential for new products focussed on understanding customers
  • Can highlight issues that need addressing
• Qualitative data


  • Expensive to collect
  • Based on opinions risk that sample isn't representative
• Sampling in market research

  Gathering of data from respondents representative of the population
• Sampling in market research

  • Small sample can provide useful insights
  • Using sampling before making marketing decisions reduces risk
• Sampling in market research

  • Sample representative of population
  • Chance of bias
• Market segmentation


  Dividing markets into parts reflecting different needs and wants