the market - theme 1

Mass market: market which is aimed at the general population

Niche market: this is a segment of the main market and addresses a specialist need for specific customers

pros:

• large scale production means economies of scale and lower average unit costs
• mass marketing is easy and straightforward as everyone is targeted in the same way
• larger volume of sales so higher revenues

cons:

• lots of competition
• expensive as homogenous products need to be differentiated through marketing
• high volume production not flexible to demand changes

pros:

• charge premium price
• easier to target customers
• small scale production can be flexible and follow trends
• less competition than in the mass markets

cons:

• very risky as demand may not be constant
• higher unit costs so no economies of scale

market size can be measured through:

- volume of sales, or physical quantity of products sold

- value, total amount spent by customers

market share is the proportion of a market that is taken by a business, product or brand.

calculation: sales of x divided by total sales in whole market X100

branding is important in mass markets as it instils loyalty in customers due to products being the same and needing to appear different

dynamic markets are subject to rapid or continuous change for example, shoes

online retailing is a dynamic market as it is constantly changing and expanding to give customers new products or new ways to shop. some online retailers have shops as well.

pros:

• shop is open around the clock
• orders can be taken automatically without the need of staff
• shop can reach international markets easier
• low overheads no need for shop premises
• stock can esily be withdrawn or updated to keep up with dynamic market changes or tastes
• easy to set up
• flexible - owner can be anywhere in the world
• opportunities for fast growth

cons:

• 71% of customers still prefer to browse online then purchase in a shop
• issues with sending goods back may put customers off
• issues with online security can put people off - especially elderly
• very competitive market
• owners need IT skills
• problems with fraud / spam / viruses
• competitors can be aware of owners business model, prices and activity

very competitive markets benefit the consumers in many ways:

• more competition means the business needs to be very efficient
• need to listen to consumers wants and needs a lot more and strive to meet these instead of being product orientated
• bust be less wasteful
• must product a good quality or service
• must use promotions or other non - priced factors to persuade customers to switch

risk:

• when the potentional outcomes of a decision are known

uncertainty:

• none of the outcomes are known in advance