Mass/Niche Market 

A product may be for created for the mass market or for the niche market. 

If a product is created for the mass market, all customers are being targeted. An example of a product on the mass market is bread or milk. 
If a product is created for the niche market, certain customers are being targeted. An example of a product on the niche market is sports cars. 

USP:  
A unique selling point (USP) is special or different about a product or service. A business uses a USP to attract customers and steer the customers away from the competitors. 

Segmentation: 
When a product is not a mass-market product, the business will target a specific customer segmentation. E.G., Lush targets young women. 

Target market: 
Target markets are used to identify a business customer base. It helps the business know where to advertise their product service. 

A market can be split by: 
Location. 
Lifestyle. 
Income. 
Age. 
Gender. 
Race. 
Religion. 

Marketing 

The competitive environment 

Competitive pricing: 
Competitive pricing is having a better price than your rivals so you can attract their customers, e.g., exclusive offers. 

Competitive quality: 
Competitive quality is having better quality than your rivals so you can attract their customers, however, to do this you will need better materials which means you may have to increase your prices. 

Competitive range of products: 
Competitive range of products is having a wider range of products to attract more people to your store, if you have a wider range of products, you attract people who have different interests. 

Competitive environment: 
Competitive environment is the location of the shop, if it is in an accessible location, more people will go there, e.g., freeport. 

Demand: 
Demand refers to how any products are sold by a business. Trends can be identified to predict demand. 

Market research: 

Primary market research: 

Research that the business gets straight from the customer and potential new customers. This may include asking the customer questionnaires, focus group questions or interviews. 

Secondary market research: 

Research that has already been completed by someone else. Examples include newspapers, articles, and electoral roll information. 

Competition: 
Every business will have competition. A business will use primary market research to try and get ahead of the competition, aiming to “tap into” the market. 

Data types: 

Quantitative data: 
Quantitative data gives you an exact answer to your question. This means that if you ask a question that includes numbers, you can get a series of definite results. An example of this is asking how many glasses of water someone drinks per day, this question will give you numbers back. You could also ask yes/no questions to get quantitative data. With this data you can find the average, or this data could be put into different charts.  
- Government statistics. 
- Questionnaires used closed questions. 
- Data from published market research reports. 

Qualitative data:  
Qualitive data gives you opinions. This means that the questions you ask will give you a wide range of responses, the question you ask will give you different answers. An example of this is what is your favourite song, this question will give you many different answers. Normally what or why questions. 
- Focus groups. 
- Interviews. 
- News articles. 
- Trade journals. 
- social media. 

Mass markets: 

Mass marketing takes place when a business aims a product at a wide-ranging market (a mass market). To operate in such a market, a business must be able to produce goods on a large scale. This requires high investment in equipment and recruitment or staff. 

Mass markets have: 
- a high number of sales 
- many competitors 
- products aimed at a large percentage of the market 
- non-specialised products 
- low profit margins. 

The advantage of targeting a mass market is that a business should be able to produce goods more cheaply and benefit from economics of scale. 

Niche markets. 

Targeting a niche market involves a business aiming a product at a, often tiny, segment of the market. 

Niche markets have: 
- low sales volume 
- a small number of competitors 
- products aimed at a small section of the market 
- specialised products 
- high profit margins. 

The advantages of operating in a niche market include: 
- a small business may be able to survive because it is offering a product or service that a larger organisation would find uneconomical to supply. 
- existing competitors might react aggressively if a smaller business tried to compete in the mass market. In a niche market there is less competition, and any competitors are likely to be small. 
- The business may be able to operate on a small scale. Many niche markets are small and specialised. Small businesses can meet demand in the market, whereas they may lack the resources to meet the demand in the mass market. 

Business orientation types: 

Business develops their new products based on one of two orientations: market orientated or product orientated. 

- A market-oriented business produces goods based on customer wants and needs. This is known as customer-led approach. This business will undertake high levels of market research (known as being market research-led) to find out what customers want and need and will fulfil these with products/services. These businesses tend to be most successful, such as food and drink manufacturers. 
- A product-orientated business produces only goods that it is good at making. This is known as product led approach. Such a business has low levels of engagement with its potential customers and so, although its goods may be high quality, they may not meet customer needs and therefore may not be easy to sell. 

Analyse (compare/contrast) the differences between Market (customers) and product (new) Orientation (strategy). (6-8) 

Market orientation is strategies that businesses use. There are two strategies, market orientation and product orientation. Market orientation is being customer led, updating your products to your customers liking. An example of market orientation is having products your customers like, so they stay loyal. Product orientation is being product led, updating your product, and keeping it up to date. An example of product orientation is keeping your product up to date and the best it can be to sell to your customers.  

One good thing about being market oriented is that you know what you must make, if you make the product well customers will keep coming back. However, a bad thing is that if you make the product wrong you will lose your customers and a lot of money will be lost on research. One good thing about being product orientated is that you only must focus on your product, and you will know what you are making and upgrading. However, a bad thing is that if an update is worse than your competitor’s customers will go to them. Businesses that work on phones should be product orientated because they always have stuff to update. Businesses that work on food should be market orientated because if they listen to feedback, they can improve their product. 

A really good answer, well done. The next steps would be to add specific business examples. 

Marketing mix, supply, demand, and equilibrium mix 

Supply and demand. 

An equilibrium price, also known as a market-clearing price, is the consumer cost assigned to some product or service such that supply, and demand are equal, or close to equal. The manufacturer or vendor can sell all the units they want to move, and the customer can access all the units they want to buy.  
Equilibrium = balance 

Demand: the willingness of a customer to purchase a product or service. 
Supply: the willingness of the business to supple enough product or service to the customer. 

The law of demand: 
if the product is too expensive people will not buy it, if it is cheaper people will buy it. 

Supply: 
making sure you have enough for everyone that needs it but not too much. 

The supply and demand equilibrium graph shows how you should not have too much supply or demand. The demand curve shows how if you purchase more of the product the price of it becomes cheaper. The supply curve shows how if the demand is low the supply must be high. The lines are curved because they gradually change in price and supply, it will not be a straight line. The equilibrium point is where you want to be with supply and demand because you will not have excess supply. An example of this is bread, if you have too much supply the bread will go stale, if the supply is too little then you will not meet the demand.  

Factors that affect supply: 
- The cost of production – for example if new technology is more efficient this will use lest electricity and reduce production costs. 
- The weather – affects the amount of agricultural produce available for sale 
- Taxation – if firms are taxed highly on a certain product, they will offer less for sale. 

Demand is the amount of a product or service that customers want. 

Factors that affect demand: 
- Income 
-The price of substitute goods 
- Complementary products, changes in tastes and fashions 
- Changes in population 
- Advertising 
- Legislation 

Equilibrium price is the price at which the demand and supply curves intersect, when price means supply, and demand will be equal. This is the price that a business should charge for its product. 

Price:

Marketing mix place 
Where you can sell your product: wholesaler, retailer, direct to customer. 

Channel of distribution: the step between the producer and the customer. 

Intermediary: an entity that acts as the middleman between two parties in a financial transaction 

Wholesalers: 
Producers sell their products to wholesalers who store it and sell in smaller quantities to retailers. The disadvantage is that you will have to sell it at a lower price to get retailers to buy it, an example of this is Costco. 

Retailers: 
retailers have goods in shops for customers to buy, the advantage is that the goods can be seen by customers in stores. The disadvantage is that profit levels will be lower as the producer will need to pay the retailer to sell its goods, an example of this is Tesco. 

Direct to customer: 
The producer sells its own products/services directly to customers, the advantage of this is that products can be targeted and personalised for customers. The disadvantage of this is individuals can find direct selling intrusive which can lead to low response rates from the target audience. 

 
Bulk: buying more quantity at a lower price 
Wholesaler: You can sell large quantities to the wholesaler, although your profit margin may be lower. The customer would buy bulk and not all customers will want to buy in bulk. 
Retailer: Your product is available in a wider range of locations and to a greater number of customers although price may be higher if the retailer buys from the wholesaler. 
 

1. Channels of distribution is the method a business uses to sell a product. 

2. The three channels are wholesalers, retailers and direct to customers. 

3. An intermediary is an entity that acts as the middleman between two parties in a financial transaction. 

4. 2 

5. Direct marketing is selling to a customer without the intermediaries. 

Place 

Factors that affect place: 
- location 
- transport links 
- Communication links 
- urban/rural 
- rent 
- competitors 
- physical/online 
- delivery 
- click & collect 
- population 
- footfall 
- parking 
- accessibility 
- phone calls. 

e-commerce is the practice of selling products online. 

E-commerce: 
Positives: 
- Low-cost method of selling goods. 
- Producers can place their own products on their own website and sell directly to customers. 
- Quick and easy for customers. 
Negatives: 
- Products may not be as good as they look online. 
- Some customers are afraid of giving card details. 
- Older people might not know how to access the internet so you will miss out on some sales. 

Brick and mortar business is a physical shop. 

E-commerce advantages: 
an e-commerce business reaches customers anywhere in the world and has lower costs as they do not have a physical premises to pay for. 

E-commerce disadvantages: 
some customers may prefer a physical store to browse. E-commerce may suit niche market businesses as they can reach their target customers across a vast global location. 

Promotion: 

Three promotional methods: 
- Advertising: Lets customers know about your business. Shows the customer what you offer. 
- Sales promotion: Lets people know about the price. Entices the customer to buy it. 
- Direct marketing: Personalised messages to the customer. Selling directly to the customer. 

Promotional methods: letting customers know about your product or service. 

A promotional objective is an aim or purpose of using that type of promotional method. 

 
Target market: influences the promotional mix as specific methods may be used that appeal to a particular group. 

Nature of the market influences the promotional mix as it varies according to the target group characteristics. 

Available finance: dictates the types of promotion that is viable for the business. 

Competitor mix: be aware of the competitors and plan accordingly. 

Nature of the product/service influences the promotional mix as different products need different types of advertisement. 

Promotional objectives: 

Increase sales (get more money into the company, reduce price) 
increasing market share (competitor’s loose customers, McDonalds do coffee) 
developing customer loyalty (constant customers, Clubcard’s) 
developing brand recognition (keep your company known, Nike – tick) 

The Boston matrix: 

The Boston Matrix is a model which helps businesses analyse their portfolio of businesses and brands. The Boston Matrix is a popular tool used in marketing and business strategy. 

The Boston Matrix is a tool used to analyse a product portfolio.  

Branding: 
Branding is important because it helps build up your reputation and how recognised you are. 
Brand image is a perception and impression of the product and brand. A strong brand image entices the customer to purchase the product. 
Brand image develops loyalty. How many times do you but a product because of the brand? A strong brand attracts the ability to set high prices. Customers are willing to pay extra because of the products brand image. 
A strong brand can help to launch a new product. You love the brand and will love to try the new product. 

Brand loyalty creates customers who anticipate the next product launch.