This document contain 57 pages, which offer a great detail in both knowledge and analysis for all topics in theme 1, found in the Level Business edexcel contents.
Market = set of arrangements which allow buyers and sellers to communicate and trade in a
particular range of services and goods
Examples of Markets:
Consumer good market = where product like food is sold
Market for services = individual services like hairdressers
Housing markets = buy, sell and let property
Commodity market = raw materials like oil, copper, trading
Financial products are traded
MARKETING INVOLVES:
Identify the needs of the consumer
Design product which meets the needs of the consumer
Understand the threats from competitor
Inform about product
Charge the right price
Persuasion
Convenience
CHARACTERISTICS OF MASS MARKETS / NICHE MARKETS
Mass markets: very large market in which products with have a mass appeal are targeted
Fast moving consumer goods like crisps/coke sold in masses
Therefore, large quantities are produced at a lower unit cost
This results in higher sales and higher profit
High competition
Leads to money being spent on advertisement
Niche Markets: smaller market within a large industry
Small market segment
Involves selling to a limited customer group, sometimes with specific needs
Due to lack of competition prices can be premium
Yet if niche markets are exploited it can attract competition
As niche markets are small by nature, they might not support many
competing firms
MARKET SIZE: - size of a market estimated/calculated by total sales of all businesses in a
market. Market size is usually estimated in several ways:
, Value = total amount spent by customers buying products
Volume = physical quantity of products which are produced and sold
Some estimates of the volume are based of users and subscribers
or viewers
MARKET SHARE: total sales in a particular market
Businesses may want to measure the market share in order to indicate the market leader.
This can influence strategies / objectives of businesses
BRANDS:
Businesses may establish themselves in a market by have a brand identity / name to
differentiate themselves
What is it used for?
Gaining consumer loyalty
Differentiating products from rivals
Help recognition
Develop image
When brand strong then premium prices can be charged without a dip in demands
(apple)
DYNAMIC MARKETS:
Many markets don’t remain the same over time as most market change:
They might
Grow
Shrink
Completely disappear
Fragment
Emerge
These kinds of markets can have a major effect on businesses if business don’t learn to
adapt. If adaptability isn’t present in a business like collapsing of a business is very likely to
occur.
, ONLINE RETAIL: e-tailing have had one of the biggest impacts in markets. This is a popular
branch of e-commerce
It involves shoppers ordering goods online and delivery service
Online retail services:
Easier to gain information to target certain products
Selling cost low as there are no staff payments/rent
Marketing costs are lower
Can reach more consumers globally
Much more flexile
Distance doesn’t present an issue
HOW MARKETS CHANGE:
Size of market: the size of a market can remains stable over a period, yet majority of markets
are likely to grow. Factors which can affect the growth for packaging are:
Increasing urbanisation
Investment in construction/housing
Development of retail chains
Expanding cosmetics/healthcare sectors
Nature of Markets: Many markets are in a state of flux (subject to constant change)
Products are
constantly updated and modified and relaunched. Therefore, as a result it widens their
ranges and adds extension to their lives.
NEWS MARKETS:
Growth in existing market and new markets can occur due to the following reasons:
Economic growth – global standards ten to rise over time therefore more money to
spend. Also, there are likely to demand for different types of products
Innovations – they need to create new wants and needs which are met with the product.
Another form of innovations is through clever marketing like supplying products in new
locations
Social change – change in society can impact markets like social trends
Changes in legalisation - new laws can affect markets e.g.: environmental legislation
Demographic changes – if there is a change in population this can affect size of the
market. If the population were to increase it would lead to growth in markets
ADAPTING TO CHANGE: If markets don’t adapt to change, they’re likely to lose market
share. Therefore, these qualities are needed:
Flexibility = needed for work practises, machinery and equipment, pricing and staff
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