1.1

mass market

aimed at general population

niche market

targets a subset of the main market that addresses a specialist need

Pros of a mass market

- economies of scale
- large volume of sales \= higher revenues

Cons of a mass market

- high competition
- have to differentiate homogenous products
- high volume production not flexible

Pros of a niche market

* can charge premium prices
* easier to target customers
* less competition

Cons of a niche market

- high risk as demand may not be constant
- no economies of scale

market size

volume of sales or value

market share

sales of business x / sales of whole market x100

dynamic market

a market subject to rapid or continuous change

pros of online retailing

* open 24/7
* low overheads
* can take order without staff
* opportunity for fast growth

cons of online retailing

* IT skills needed
* competitive market
* issues with returning goods
* technical issues

risk

potential outcomes of a decision are known

uncertainty

no outcomes are known

product orientation

the business focusing on the product being unique and of highest quality

market orientation

the business focusing on a product meeting customer needs and demands

primary data

original data gather by the researcher that doesn't already exist e.g interviews, surveys

secondary data

data that already exists, collected by someone else

limitations of market research

* inaccurate/misleading data
* bias
* poor reliability of data due to sample

pros of using ICT in market research

* cost effective
* reaches more people=more reliable
* no staff required

market segmentation

an identifiable group of individuals where consumers share a characteristic or need e.g based on demographic, geographic, behaviour etc

market mapping

the process of using a graph illustrating competitors market positioning in order to identify a gap in the market

competitive advantage

when a business' product or service appears superior to the competition

types of competitive advantage

* cost advantage
* differentiation advantage
* having higher profits than average

product differentiation

where a product is different from its competition in some way e.g reputation, customer service, value for money, product features

added value

the difference between the selling price and costs to create the product

ways to add value

* design (unique features)
* production (quality, efficiency)
* marketing (brand differentiation)
* convenience
* packaging

benefits of adding value

* can charge a higher price
* protection against competitors with lower prices
* customer loyalty