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