Edexcel AS/A Level Business Unit 1 - Meeting Customer Needs
Containing:
The Market (Niche and Mass)
Market Segmentation
Market Research
Added Value
Competitive Advantage
Market Positioning/Market Mapping
Market Research Definition:
Topic 1.1 Meeting Customer Needs
The collection and analysis of market information where it Mass vs Niche Markets PRI
MASS MARKET: a large market with a number of customers which is not segmented rese
can include looking at the market as a whole, the
into groups based on customer needs or interests.
competitors, products, and the consumers in the market. NICHE MARKET: a small market that has customers with specific needs or
requirements.
Working out Market Share: Businesses in mass markets sell to more consumers than those in niche markets,
meaning products sold in mass markets can be cheaper to produce than those
The proportion of sales in a market made by one firm or
sold in niche markets.
brand, usually expressed as a percentage. Businesses in niche markets can be riskier as they sell to a smaller number and
MARKET SHARE = (SALES OF A PRODUCT OR narrower range of customers.
BUSINESS/ TOTAL MARKET SALES) X 100 Mass markets have a larger market size than niche markets, but each business
within a mass market is likely to have a smaller market share than each business SEC
within a niche market. rese
Added Value In mass markets, there are businesses selling similar products, so there is more
Increasing the difference between the cost of making the competition which means businesses in mass markets might focus more heavily
product and the price that the customer pays. This usually on strong branding.
increases profits.
ADDED VALUE = PRICE PRODUT IS SOLD FOR – Dynamic Markets
COST OF MAKING PRODUCT Markets can change in a variety of ways, e.g.:
consumer preferences
It can be achieved by either increasing the selling price of innovation
the product or by reducing the costs of making the product. the way in which customers want to shop, e.g. online shopping
Lots of the strategies businesses use to gain a competitive competitors
advantage encourage customers to pay a higher price and changes in legislation.
Businesses need to adapt to changes in the market in order to be successful
so add value to a product. and maintain their market share and demand.
QU
sta
Market Positioning and Market Mapping Competitive Advantage que
A market map is laid out as a matrix where the products or brands are A condition which allows a firm to generate more sales or be more profitable than its
positioned on it according to where they are judged to lie. rivals. To achieve it, a firm needs to be doing something different to its rivals:
Businesses can get a lot of information from analysing market maps: Lower costs – producing a product but at a lower cost means a firm can charge a
lower price for its product, which should generate more sales.
Market maps can reveal gaps in the market.
Product innovation – by producing new and unique products that consumers want
Market maps can show a business who its closest competitors are.
If the sales of a product is declining, the business might use a market to buy, sales will increase. QU
map to find out how customers view their product and then try to Advertising and marketing – the more a firm advertises its products and markets cus
reposition it on the map. it to make it attractive to buyers, the more likely it is to generate sales. ans
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