Unit 4 topic test

Niche Market vs Mass Market

Niche market

Mass Market

targets smaller but highly specific markets, a strategy often employed by smaller firms with limited resources, niche markets have fewer competitors and represent opportunities that may have been overlooked by larger firms (eg. Rolls Royce, Hermes )

ignores market segmentation and targets the entire market, appealing to common needs and wants of consumers

The niche market is advantageous for businesses because they are targeting a specific market and are more likely to sell their products, possibly at higher prices.

The Mass market is also very advantageous to larger business because of growth, products targeting the mass market are most likely low priced but if in recession business would not be as terribly affected as they can raise prices without losing their market as their product is a necessity

Example : Coke, The brand dominants the market with a few competitors like pepsi following behind, their product is for a mass market and can be considered a inelastic product.

An Example of Niche marketing : Ferrari, the performance cars are built with the best known racing knowledge with the best quality products, these are very rare and can not be assembled in a mass market therefore there are a specific set of customers known as the niche market

E- Commerce

The definition is the buying and selling of products online on the internet

E-Commerce is built on

• Ubiquity: It is available anywhere and anytime.

• Customization: Individuals can personalize their messages and ways of delivery to other individuals.

• Global reach: Also known as the worldwide web, theoretically it has no national boundaries.

• Integration: It allows the integrated use of various forms of media to deliver marketing messages.

• Universal standards: It is a global and uniform standard.

The four P's

Product

Promotion

Price

Place

Pricing Strategies

Research Methods

The Advantages and Disadvantages

Advantages for businesses

Disadvantages for Businesses

Types of E- commerce

business to business (B2B)

Business to consumer (B2C)

Consumer to Consumer (C2C)

Sales Forecasting

when a business sells to a consumer (amazon or apple)

When the business trades to another business like a farmer selling produce to supermarkets

Where transactions are taken place between each other like ebay or carousel.

The product is sold to a wider customer base.

Some of the software adopted by businesses can be at a high quality allowing customisation increasing customer satisfaction

customer are aware of product specifications before purchasing the product

Customers can compare prices before purchasing a good or service (trivago)

Consumers buy directly from the manufacturer instead of a distribution method, meaning the business saves money

traditional methods are supplemented for online advertising

multimedia (use of social media) is very effective and is low cost.

online surveys allow customer feedback and improvements for product and overall customer satisfaction,

Online shopping is accessable to most of the population

It does not require distribution which leads to cost reduction

Businesses can sell to a larger customer base.

It is more cost effective - in regards to marketing a product compared to the traditional methods

Firms like Facebook will be benefiting when other businesses want to use advertising space.

Reduces wastage and avoid the landfill tax found in some countries, this could be achieved by publishing online manuals.

Internet security, when consumers have to pay online it may be a security risk. Which could decrease sales

Business invest a large sum of money on internet security hardware and software which could not be cost effective

firms are vulnerable to competitors as they can access there product information and trade to compete within the market

For business like start ups, running a website could be costly as it require mantainance and can be negative on the total cost

Advantages for consumers

Easily accessable, it can be bought within the comfort of their home without going to a physical store

Increased choices and allows consumers price and feature comparision

good online customer service may increase customer satisfaction

Disadvantages for businesses

Consumers can not physically try or feel the product before they purchase the product

Online pop ups and spam may annoy some consumers

Consumers in less devoleped countries would not have access due to bad connectivity with the internet

Credit card information is at risk as it can be stolen by online hackers

Primary research

Secondary research

To collect first hand information from the market

Collection of second hand information, info that has been sourced

Advantage

It can be accurate and trust worthy

Disadvantage

It may not be time and cost effective

Advantage

Disadvantage

It is cost effective and easily accessed

It can may not be [accurate]

Penetration pricing

Cost plus pricing

price skimming

Psychological pricing

loss leader

price discrimination

price leadership

Charging different prices to different groups for the same product

One example is movie theatres: charging different rates for Child and Adult, this depends on the products elasticity

Firms may reduce prices slightly by example 10 - 9.99 for customers to feel better and feel that they are buying for a good value

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Calculating the four year moving trend

Step 1.

Add year 1,2,3,4

Step 2.

Add year 2,3,4,5

Add the two values and divide/by eight

Calculate the three year moving average

Step 1. add year 1,2,3

Step 2. Divide the value by 3

average cyclical variation

add the variations for each year (eg.4 years )

and divide the value by 4

if the example were 5 divide the value by 5

when finding the adjusted forecast for year # add (+) the cyclical variation