Business Studies Chapter 9: Marketing& the Market

Marketing

When a business identifies customer wants and satisfies them profitably.

Summary role or marketing

1)Raise customer awareness of the business product or service.

2) Increase revenue and Profitability.

3)Improve product image

4)enter new markets in new home or other countries

5)help the development of a new or existing product

6)increase market share

Causes of Markets change

1. Customer change in taste or fashion

2. changes in technology

3. ageing population

4. changes in income

If business fails to respond to customers and market change the business might fail.

Mass Market

Mass market is where the business sells to the largest part of the market and where standardized products are being sold.

Advantages of Mass market

1) potential to higher sales level, therefore more potential of economies of scale and revenue

2)No additional cost for producing different products for different consumer goods

3)the brand name and the business name will likely be widely known.

Disadvantages of Mass markets

1) Lower customer loyalty as some customers will not be attracted by the mass market image as it doesn’t meet their needs

2) competition can be high as other businesses might have similar products

3) its very costly to spend more money for advertisement

Niche Market

A small specialized market, a segment of a much larger market and where specialized products are being sold.

Advantages of Niche Market

1. Higher customer loyalty as their needs are closely targeted, this means it builds higher customer loyalty& good customer relationship.

2. Consumers may be willing to pay higher prices for the product which could raise the business’s revenue

3. It’s suitable for small market producers as they are less competitive in the niche market

Disadvantage of Niche Market

1. Smaller sales potential as the market is smaller

2. Niche market usually focuses on one product so if the product is not in demand anymore, the business might fail

Market Segmentation

When a business knows the different segments of a market exist and develops and markets different products for each segment.

Market Segment

Divides the market into similar segments of having the same characteristics

Advantages of Market Segmentation

1) It builds higher customer relationships as the consumer needs are more specifically specified for them.

2)Increases revenue as customers are willing to pay higher prices to meet their needs

3) Promoting and advertising allows to get the information of customer preferences which makes it more effective for marketing budget

Disadvantages of Market Segmentation

1) Cost of promoting and advertising for different products for each segments can be expensive

2)Cost of developing and marketing different products for different segments can be more expensive and detailed market research is needed