Market Notes

The Market

• A set of arrangements that allows buyers and sellers to communicate and trade goods or services.

• Examples: Consumer goods, services, housing, commodity, and financial markets.

Marketing

• Activities that help a business sell its products and services.

• Includes identifying consumer needs, designing products, understanding competition, informing customers, pricing, and ensuring convenient availability.

Mass Markets

• Selling the same product to all consumers (e.g., crisps).

  • Often supplied by large businesses.

• Advantages:

  • High sales and potential profits.

  • Economies of scale.

  • National/global brand image.

  Disadvantages:

  • High competition leading to price wars.

  • Less customer loyalty as products may lack uniqueness.

  • Vulnerability to market saturation.

Niche Markets

• Selling to a small segment with specific needs (e.g., vegan sports shoes).

  • Often supplied by small businesses.

    Advantages:

    • Less competition.

    • More personal customer interaction.

    • Better meets individual needs.

    • Strong brand and loyal customers.

    Disadvantages:

    • Limited growth potential due to small target market.

    • Higher risk if the niche market's needs change.

    • Dependence on a small customer base.

Market Size

• By Value: Total monetary amount spent by customers. E.g. $40m$ spent in the Thai car market in 2023.

• By Volume: Total quantity of items sold. E.g. $97000$ cars were purchased in the Thai car market in 2023.

Market Share

• Definition: The proportion of a market supplied by a business.

• Calculation: $\frac{\text{Sales of a business}}{\text{Total sales in the market}} X 100$

Market Growth

• Definition: How much a market size has increased from one year to the next.

• Example: Market size for Cola in Thailand in 2022 was $10bn$ and in 2023 $12bn$ calculate the market growth (%).

Market Leader

• Definition: The firm with the highest market share.

Brands

• Definition: A name, sign, symbol, design, or image that allows customers to easily identify goods/services and differentiate the business from competitors.

Dynamic Markets

• Most markets are changing in size, customer preferences, and competition.

• Failure to adapt can lead to business failure.

• Rapid changes require businesses to adapt to remain competitive.

Changes Occurring in Markets

• Online retailing.

• Size of markets.

• Nature of markets (e.g., social trends).

• New markets (e.g., technology, developing countries).

• Changing technology.

Innovation & Market Growth

• Innovation (new technology) helps businesses grow by:

  • Creating new wants and needs.

  • Social changes.

  • Changes in the law.

  • Demographic changes.

Adapting to Market Changes

• Flexibility.

• Market research.

• Investment in R&D.

• Develop a niche.

• Continuously improving.

Competition and the Market

• Impact on businesses:

  • Lower prices.

  • Product differentiation.

  • Higher quality.

  • Better promotion.

  • Extras like high-quality customer service.

• Impact on consumers:

  • Increased choice.

  • Lower prices.

  • Higher quality.

  • Less exploitation.

Risk and Uncertainty in Markets

• Risk: An action or decision that can be planned for which may result in a loss

• Uncertainty: The inability of a business to predict future events that are unexpected

Mass Market: Selling the same product to all consumers (e.g., crisps). Often supplied by large businesses.

Niche Market: Selling to a small segment with specific needs (e.g., vegan sports shoes). Often supplied by small businesses.