Lecture notes
Lecture notes Theme 1: Marketing and People
- Institution
- PEARSON (PEARSON)
In depth summary notes on Theme 1 of Edexcel A level Business studies on most topics.
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Theme 1 Notes1.1.1. The Market
A. Mass Market and Niche markets:
A. characteristics:
Market : A place where sellers and buyers meet
- Different markets will have different needs and characteristics which impact
each market differently
- Markets aim to identify and satisfy customer needs for profitability
Market research : process of gathering data about the market using primary or secondary
research methods
Mass Markets: where products/services are targeted to the broad market segment where a
large portion of the market have similar needs/wants
- Mass marketing occurs when a business sells to the available market and
productions is large scale
Niche Markets: where products are aimed at a small segment of the entire market
- Niche marketing occurs when a business will satisfy the specified needs of a
market and small scale production
Mass Niche
- Products are less unique and standardised - Specialised products aimed at narrow
market
- Low average costs due to economies of scale - High average costs due to lack of
economies of scale
- Low prices leading to greater affordability and - High prices due to less demand ⇒ lower
higher sales volumes sales volumes
- Low prices ⇒ low profit margins - High price ⇒ high profit margins
- Advertising to a diverse market - Likely to attract competition
B. Market size and Market research:
Market size: Market size is the measurement of all the sales by businesses within a
market and how large a market is
Market share: is the size of sales done by a singular business out of the whole market
𝑠𝑎𝑙𝑒𝑠 𝑜𝑓 𝑎 𝑏𝑢𝑠𝑖𝑛𝑒𝑠𝑠
- Calculated by : × 100
𝑡𝑜𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠 𝑜𝑛 𝑚𝑎𝑟𝑘𝑒𝑡
C. Brands:
, Brands: is the image/logo/name of a company
- Branding is useful as it helps a business to differentiate itself from
competitors
- Furthermore can add value to the products ⇒ which influence a brands
position in the market ⇒ increasing competitive advantage
- Small business will use branding to communicate to customers and stronger
brands will have higher prices
- Perceived qualities of stronger branding is beneficial to businesses
B. Dynamic Markets:
Dynamic markets: refers to the nature of the market which is subject to changes that are
continuous
- Many markets are becoming more competitive
- Businesses are less likely to survive if they can not adapt or change according to
trends and the rest of the market.
A. Online retailing
Advantages Disadvantages
- Provides business access 24/7 - High costs for web development and
maintenance
- Longer trading hours - Smaller businesses are not recognised.
Larger businesses will dominate
- Cheaper to run ⇒ low fixed costs ⇒ - Higher levels of competition ⇒
more profit difficult in differentiating
- Data can be collected about customer - Lack of personal contact with
behaviour (primary research) customers ⇒ reduced customer service
⇒ affects customers experience
- Consumers can receive offers - Difficulty in dealing with returns
- Can be accessible anytime - Risk of card fraud
B. How markets change
Changing markets conditions for new opportunities but also threats
- Changing consumer trends
- Changing demographics
- Amount of competition within the market
- Changing rules and legislations
C. Innovation and market growth
Product innovation: is the process of adapting or improving existing products
Process innovation: is adapting to process of production of an existing product
, Market growth: measurement of the entire market in regards to change
D. Adapting to change
Strategies such as :
- Flexible business structure
- Meeting customer needs
- Investing in new designs
- Innovations
- Market research
- Continuous improvement
C. How competition affects the market
Competition can be direct or indirect
- Customers benefit through 1. Low prices 2. Better quality products 3. Better customer
services as businesses are trying to ensure customers are loyal to their brand and so
that they can beat competitors
D. Risk v uncertainty
Risk: the potential threat to a business which can be internal or external - can be calculated
and prepared for.
Uncertainty: Unexpected and not predictable.
1.1.2. Market Research
A. Product and market orientation
Product orientation: an approach which focuses on the improvement of the product rather than
customer needs. As well as focusing on what is best selling
- Emphasis on creating a market for the product which could lead to disinterest as there
is no response to the needs of a market.
- Includes product research, product testing and focus
Market orientations: an approach which focuses on customer trends and wants. Responding to
what is in demand.
- Customers are placed at the centre of the marketing decisions
- Adv: no heavy marketing is needed amd responding to needs will INCREASE
revenue
- Disadv: time consuming and substitutes may be released by the time of production
- Includes: market research, testing and focus
B. Primary and secondary research
Primary research: A research method which includes obtaining all new data which is not
accessible to competitors and tailored to the business needs.
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