Lecture notes
Markets
- Institution
- CCEA
A summary of markets.
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By: ocolton • 2 year ago
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Market 2E-Commerce: This is a market that involves people using electronic devices to buy and sell
goods online e.g. laptops and smart phones. In 2012, every £1 of every £10 spent in the UK
was done through e-commerce, this figure is meant to grow by 2016. Over 90% of all
businesses now have a website; this means more people are likely to use e-commerce.
Business perspective:
Advantages Disadvantages
Global presence: This allows all business no matter This global presence increases competition as you open
what size to operate on a global scale. This in turn yourself to a higher level of competition meaning the
increases the potential customer base/audience a market is harder to break. This means that prices will
business can reach. This has the potential to have to be lowered in order to compete and reduces
increase sales and the profits of the company. Also profit margins.
as consumers buy products online the business can
keep a record of this, collate the data and offer
deals on certain items in an attempt to boost sales
and profits.
Reduced costs: Do not have to build, staff or Start-up costs: It is a costly and time consuming process
maintain a physical store. This increases profits asas the purchasing and updating of hardware, software
there is less bills such as rates and electricity to pay
along with employing a web designer is a costly process.
which reduces the overall costs and improves This also means that profits will be reduced as the costs
profitability. incurred by the company grow. Also technology goes
out-of-date quickly meaning updating has to happen
regularly increasing costs.
Increased sales and profit: As you operate 14/7 and Not suitable for all products: Perishable goods or
on a global scale this allows the business to furniture as people are reluctant to purchase these items
increase its sales and profits. This allows the as they prefer to buy them in person. This means that
business to grow and expand easier as they have the potential customer to sell to is limited which reduces
the capital available to do so. profits.
Customer’s perspective:
Advantages Disadvantages
Increased convenience: Consumers can visit However, there are concerns about security as many
multiple websites day or night, compare prices and people are reluctant to use credit cards over the internet
make purchases without having to leave their due to theft and credit card fraud.
houses. This benefit the customer as it can fit into
their schedule and increases the convenience for
customers.
Lower prices: The increased competition brought Lack of instant gratification: Much of a consumer’s
about due to e-commerce, means that businesses satisfaction from purchasing a product lies in the instant
will have to reduce prices to compete on a global gratification of using and displaying that product. This
scale, thus benefiting a consumer with lower prices. reward does not exist when the purchase does not arrive
for days.
Increased choice: Instead of being confined to Inconsistent return policies: Consumers can become
stores in their local area, electronic consumers can frustrated with e-commerce due to the poor customer
shop in store anywhere in the world. This means service associated with electronic retailers. This means
customers can find what item is best value for consumers often have difficulties in exchanging or
money and where the best deal is. returning products.
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