business theme 1: the market

what is a mass market?

the largest part of the market that sells a broad range of products that is aimed at the wider audience/general population

what is a niche market?

a subset of the main market that sells specialised products and is aimed at specific customer needs

what does higher profit margins mean?

where a business keeps a greater % of its revenues

what are 3 advantages of a mass market?

1. larger sales potential (large customer base= higher profits)

2. lower unit costs (economies of scale= cheaper production)

3. stronger market position (widespread product availability=dominant market presence)    

what are 3 advantages of a niche market? 

1. customer loyalty (unique needs= loyalty)

2. less competition (specialised products= less competition)

3. higher profit margins (cos of less competition + premium prices)

what are some disadvantages for a mass market?

higher competition

vulnerability to market changes

what are some disadvantages for a niche market?

limited customer base

lack of economies of scale

what is market size?

the total sales of all products in that market

what is market share?

the proportion / % of the market a business has

what is a dynamic market?

a market that is subject to rapid change and influence (trends/competitor rivalry etc

what is business risk?

the possibility that a business will have lower profits than expected or even make a loss

can be predicted/ prepared for

what is business uncertainty?

where uncontrollable factors can lead to unpredictable future outcomes

what is the difference between business risk and uncertainty?

risk is a known outcome that you can calculate but uncertainty is an unknown outcome due to a lack of knowledge