what is a market?
a place where buyers and sellers meet to exchange goods or services
what is a mass market?
where a business sells to the whole market and markets the product to all consumers in the same way
what is a niche market?
this is when a business targets a small segment of the overall market that has very specific needs and wants
what are the advantages to niche markets?
-lower levels of competition
-a higher price can be charged
-possible to build strong customer loyalty
what are the disadvantages to niche markets?
-potentially lower profits as the market is smaller
-a change in customer tastes could make the niche disappear
what are the advantages of mass markets?
- more potential sales as wide market
- less risky as there are more customers to target
what are the disadvantages of mass markets?
- more competition
- product harder to personalise
- needs to be able to operate on a larger scale meaning costs could be very high
what is the calculation for market share?
sales of one product
______________________ x 100
total market sales
what is market segmentation?
the process of subdividing a market into identifiable segments or subgroups having similar needs , wants , or characteristics
what are the 3 categories for market segmentation?
demographic
psychographic
geographic
what are the positives of market segmentation?
-greater knowledge about its customers
- customers feel valued that their needs are targeted so it improves loyalty
-allows a business to sell more products and increase profits
-allows a business to make a wider range of products
what are the potential drawbacks of market segmentation?
-splitting the market into groups means more time spent on different marketing campaigns
-targeting only one segment can be risky as a change in customer tastes could lead to a loss in sales
what are the benefits to the customer of market segmentation?
-can receive a product closer to their expectations
- can fit better with their budget or lifestyle
what is a monopoly?
when there is one business in the market or one with 25% market share
