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1.1.1 The Market: - Coggle Diagram
1.1.1 The Market:
Markets
local
regional
national
mass
niche
dynamic
Mass market
Advantages
higher sales revenue
economies of scale
market leader
mass marketing (undifferentiated)
Disadvantages
not all consumers are potential customers
lower profit margins
competition
Factors
universal appeal
target whole market
everyone should be a consumer
brands are totally associated with product
Niche market
Advantages
better customer service
higher price
less competition
product distribution
Disadvantages
lack of economies of scale
attract bigger competitors
customers tastes and preferences change
must be large enough to support a profitable business
Factors
small segment within larger market
specialised products
satisfy specific customers' needs
businesses are expert in their field
generally large companies ignore them
Businesses need to bear in mind
online retailing
innovation
adapting to change
How to measure market size
market size
measured by volume
measured by value
market growth
measures rate of change of market size as a percentage
rising, falling or remaining stable
market growth= demand increasing
market fall= demand decreasing
key indicator for existing and potential market entrants
Market share
Factors
important measure of business performance
key corporate objective
explains how overall market is split between existing competitors
good indicator of a competitive advantage
Formula
value of product sales/ value of market sales x 100
Dynamic markets
Key sources of change
customers' tastes, preferences and attitudes
customers income
government regulations
new technologies
new competitors
Factors
all markets change over time
not all change at same pace
some markets experience changes at faster rates than others
Online retailing
Advantages
more customers
marketing
lower costs
stock can be stored in a warehouse
increased price transparency
Disadvantages
customer put off buying online- can't 'try before they buy'
online security problems
delivery costs are involved
less personal selling
customers are entitled to a 'no quibble' returns and refund policy