In this lecture notes you will find in depth notes for "The Market" (Theme 1: Marketing and people, A level Business Edexcel).The textbook "Edexcel AS/A level BUSINESS, 5th edition, Pearson" is referenced in these lecture notes. They are really well written and simple to read and understand. They...
.Niche Marketing
Where a business targets a smaller segment of a larger market, where customers have
specific needs and wants (vegetarians, vegan…) (less customers)
Ex.: Whole foods market
PROS:
⇨ Charge premium price
⇨ Easier to target customers
⇨ Small scale production can be flexible and follow trends
⇨ Less competition than in the mass market
CONS:
⇨ Very risky as demand may not be constant
⇨ Higher unit costs so no economies of scale (the more you make, the cheaper it comes)
⇨ Ex.: Tokyo old cameras
.Mass Marketing
Where a business sells into the largest part of the market, where there are many similar
products offered by competitors. (many products on offers)
Ex.: Colgate, Pepsi, Mc, Kellogg’s…
KEY FEATURES:
- Covers the majority of people
- Customers needs and wants are more general and less specific
- Associated with higher production output and capacity + potencial economies of
scale (The more you make, the cheaper it comes)
- Success usually associated with low-cost (highly efficient) operation or market
leading brands
PROS:
⇨ Large scale production means economies of scale and lower average unit costs
⇨ Mass marketing is straightforward as everyone is equally targeted
⇨ Large volume of sales means high revenues
⇨ High revenues can be pumped into R&D
↓
(Research and development (R&D) include activities that companies
undertake to innovate and introduce new products and services. It is often
the first stage in the development process. The goal is typically to take new
products and services to market and add to the company's bottom line)
CONS:
⇨ Lots of competition
⇨ Homogenous products (the product has essentially the same physical characteristics
and quality as products from other suppliers, ex.: water, same water, different
labels) need to be differentiated through marketing which can be expensive
⇨ High volume production not flexible to demand changes
, .Market size
- Number of sales that could be made in that market
Ex.: Travel market Segmentation↴
- Indicates the potential sales for a firm (“the size of the prize”=reward)
- Usually measured in terms of both volume (units) and value (sales)
- Size of individual segments within the overall market can also be measured
- Not normally a marketing objective (since a firm cannot influence it)
.Market growth
- A key indicator for existing and potential market entrants
- Growth rate can be calculated using either value (e.g. market sales) or
volume (units sold [quantity of products which are produced and sold])
↓
GROWTH RATE (%)[B ] CHANGE∈UNITS
-------------------------------------------- X 100 ( --------------------------------X 100)
¿ THE PREVIOUS YEAR[ A] UNITS SOLD PREVIOUS YEAR
.Market share
- Describe the portion of a particular market that is
held by a business, a product, a brand or a
number
of businesses or products
- Explains how the overall market is split between the
existing competitors
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