Mass and Niche Marketing Review

Flashcards covering key definitions, mathematical formulas, and advantages and limitations of mass marketing and niche marketing.

What is a niche market?

A small segment of a larger market where customers have specific needs and preferences.

What is niche marketing?

Targeting a small segment of a larger market with specific needs and preferences.

What is a mass market?

An unsegmented market where products have wide mass appeal.

What is mass marketing?

Where a business targets the whole market with products or services aimed at every customer with wide mass appeal.

How is a brand defined in the transcript?

A product, service, or business that can be easily distinguished from competitors and is easily recognisable by customers, such as through a name, logo, or personality.

What is the general definition of a market?

Anywhere where buyers and sellers come together to transact with each other.

By what two metrics can market size be measured?

Volume or value.

What is the formula for calculating market size by value?

$$\text{Market size by value} = \text{Total number of units sold in the market} \times \text{average selling price}$$

What are two advantages of mass marketing?

1. Large potential market means potential revenue is very large. 2. Producing large quantities can lead to economies of scale, reducing unit costs and increasing profit.

What are three disadvantages or limitations of mass marketing?

1. High competition because businesses are attracted by the large size of the market. 2. Products must be differentiated or customers are often unwilling to pay a high price. 3. Large spend required on marketing and branding to reach the market.

What is the formula for calculating market share?

$$\text{Market Share} = \frac{\text{Sales of a product or business}}{\text{Total sales in the market}}$$

What are three advantages of niche marketing?

1. Tailor-made products can give a business a competitive edge. 2. Scope to charge a premium price. 3. More effective and efficient promotion.

What are four disadvantages or limitations of niche marketing?

1. Low revenue levels due to relatively low sales volumes from a limited number of customers. 2. High unit costs as low production levels make it hard to benefit from economies of scale. 3. Premium prices might attract competitors. 4. Risky to depend for sales on a narrow section of the market if demand falls.