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Summary Markets and market structures
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Summary notes for markets and market structures.
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MarketsMarket – where buyers and sellers meet to exchanges goods for money.
Types of markets:
Local/global
Mass/niche
Trade/consumer
Product/service
Seasonal – sales care concentrated in a particular part of the year. E.g., Christmas
trees are sold mostly in December.
Market orientation – business bases its marketing mix on its perception what the market
wants to satisfy needs and wants of consumers. E.g., Apple
Product orientation – business bases its marketing mix on a business’s internal strengths by
emphasising on the product aspect.
Asset led – marketing decisions are based on the needs of customers and strengths of the
business. E.g., Cadburys and Nike
Mass marketing – business offers almost the same product to all consumers and promotes
them in a similar way.
Mass market benefits:
A lot of customers
Opportunity for large profits
More sales
Benefit from economies of scale – (high sales volumes makes it easier to afford large
advertising and marketing campaigns)
Less risky
Mass market drawbacks:
Low prices, (competitive prices)
Increased competition.
Need more machinery and large factories to mass produce – Need a large
investment.
Difficult to appeal to individual customers.
Expensive to promote.
Niche marketing – aiming a product at a particular market/audience.
Niche market benefits:
, Charge high prices
Less competition
Tailored to meet customers’ needs
Won’t be left with outdated stock
Niche market drawbacks:
Fewer potential customers mean there are fewer sales.
If too successful, niche market may be targeted by larger competitors which would
mean you would make less profits as prices will become competitive.
Risk from supply.
Market size can be estimated in two ways.
Value – total amount spent by customers buying goods
Volume – physical quantity of products which are sold
Market growth = (change in size) / (original market) X 100 = ____%
Market share = (sales of a business) / (total sale in market) X 100 = ____%
Market segmentation – is the process of dividing a market into smaller groups (segments)
who have similar needs, interests and characteristics.
Markets are segmented by:
Demographics – age, gender, income, occupation, nationality, education, family size
Psychographic – lifestyle, personality traits, interests, values, opinions
Geographics – needs, preferences, interests based on location, regions of the country,
(rural, urban suburban, city) climate, area, language
Behavioural – purchase consumption, lifestyle, usage intent, occasion
Why is market segmentation important?
Allows businesses to learn about their consumers so that they can vary its products
to suit customer’s needs.
Can gain a better understanding of customers’ needs and wants, therefore can
tailor campaigns to customer segments most likely to purchase products. (Target
audience)
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