the market
niche marketing: targeting a relatively small segment of the market e.g. selling a Judo magazine
benefits towards niche marketing
less competition
small-scale production
tailor-made products
mass marketing: targeting a large part of the market or the whole market with a product that appeals to a wide range of consumers
benefits of mass marketing
large-scale production
high revenues
brand awareness
drawbacks of mass marketing
changes in demand - fall in demand means some assets such as machinery is not used
fixed capital
more competition means it is harder for the business
drawbacks towards niche marketing
lower profits
changes in demand
market entry - large firms may join the market if the demand for the particular product increase
market size: is the total sales of all the companies within a market place. measured in terms of 2 things: the number of units sold and the amount of spending.
market share: is the percentage of total market sales held by one firm
market share = the product of firm's sales / total market sales
dynamic market: is one with the potential to rapidly change
disruptive technology: is where new technology has the potential to change the way the market operates
advantages of online retail for the business
easy access to market
reduced overheads - selling online can remove the need for expensive retail premises and customer-facing staff, allowing you to invest in better marketing and customer experience
customer intelligence - ability to use online marketing tools to target new customers and website analysis tools to gain insight into customers needs
disadvantages of online retail for the business
website costs - planning, designing, creating, hosting, securing and maintaining a professional e-commerce website isn't cheap
infrastructure costs - even if you aren't paying the cost of customer-facing premises , you'll need to think about the costs of physical space for order fulfillment, warehousing goods etc.
risk: something that can be planned for - outcomes are known. a risk is taken if the rewards are high. risk can be minimized by market research
uncertainty: is caused by unexpected often external factors which may be unpredictable. example: tsunamis
market size calculation:
adding together the number of items sold by all the different firms operating in the same market
or
adding together the sales revenue of all the different firms
online retail:
online retailing is growing at an astonishing rate, with online sales now accounting for around one quarter of the total retail market. this is a dynamic market which is unpredictable. retailers who ignore e-commerce may see a drop in their sales. however, a business should always consider the advantages + disadvantages of expansion
competition: occurs when two or more businesses act independently to supply goods and services to the same group of consumers. competition can be direct / indirect
direct competition: is when businesses produce similar products that appeal to the same group of consumers
indirect competition: occurs when different businesses make or sell products that are not in direct competition but compete for the same consumer expenditure