component 1- 05. types of market and market data

what is a market?

A market is a place where buyers and sellers meet to exchange goods and services

what is mass marketing?

where a business sells into the largest part of the market where there are many similar products on offer

advantages of mass marketing

• easier profit 

• low cost production

• increased popularity 

• easier advertisment 

• high demand- more sales 

• more finance- larger group of clients 

• maximised income 

disadvantages of mass marketing 

• not personal to customers 

• quality of products decrease

• lots of competition 

• no unique selling point 

• heavy advertising costa 

• high developing costs 

what is niche marketing?

where a business targets a smaller segment of a larger market where customers have specific needs and wants and the business specialises in meeting them

Advantages of niche marketing

• can be personal for customers

• high quality products

• less competition

• lower initial cost

• concentrate on the companies strengths

disadvantages of niche marketing 

• can be more expensive products- less customers 

• high cost in production 

• mass marketing firms target the niche 

• promotion is difficult and expensive 

What is global marketing?

selling goods or services to overseas markets

what factors have led to a more global economy?

• advantages in technology- internet

• better transportation- planes boats

• globalisation

• social media

• enhanced communication

benifits to uk firms of operation in the global economy 

• new technology 

• new sales opportunity 

• reduces unemployment 

• wider customer base 

risks to uk firms of operationg in the global econonmy

• money isnt being paid into the uk economy - VAT

• tarrifs - tax

• language barrier

• exchange rate fluctuations

Key difference between business 2 business and business 2 consumer

b2b, customer is an organisation

b2c, customer is an individual

What is seasonal markets? 

Markets when the is high demand at certain times in the year

what is market size?

the size of a market can be estimated or calculated by the total sales of all businesses in the market, market size is usually estimated in a number of ways:

Value- the total amount spent by customers buying products

Volume- the physical quantity of products which are produced and sold

What is market share?

represents the volume or value by a particular firm/ brand as a percentage of the whole market

how to work out market share

firms sales / total market sales x 100

Reasons to increase market share 

• sales growth in a stagnant- when sales for the whole market are not growing the only way a firm can increase its sales is to increase its market share 

• increase bargaining power - more power you have in negotiations with suppliers 

• economies of scale- higher volume a firm produces the lower the average unit cost 

• reputation- the market leader gain status and are generally perceived to be the best 

reasons not to increase the market share

• the firm is near its production capacity - may have to expand, need finance to expand

• higher market share does not always mean more profit- profit could be lower if the revenue made from the extra sales is lower than the cost

• price war- may be provoked as rivals try to keep their market share- meaning higher sakes volume could actually mean lower revenue

• competitors and markets authority(CMA) - if a firms market share gets too large they could be investigated by the commission to ensure customers are not exploited