Podcast
Questions and Answers
What are markets?
What are markets?
Markets are places where buyers and sellers meet to exchange goods and services.
Why are consumers' goods markets important?
Why are consumers' goods markets important?
They sell products such as food, cosmetics, and magazines.
What are commodity markets?
What are commodity markets?
Commodity markets trade raw materials, such as oil, copper, wheat, and coffee.
Marketing only involves selling a business's products.
Marketing only involves selling a business's products.
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What is the key difference between a mass market and a niche market?
What is the key difference between a mass market and a niche market?
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What is an advantage of a mass market?
What is an advantage of a mass market?
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What is a disadvantage of a niche market?
What is a disadvantage of a niche market?
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What are the two ways to measure market size?
What are the two ways to measure market size?
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What is market share?
What is market share?
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What is a brand and what is its purpose?
What is a brand and what is its purpose?
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What are some advantages of online retailing?
What are some advantages of online retailing?
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What are some reasons why markets may grow?
What are some reasons why markets may grow?
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Businesses that fail to adapt to changing market conditions will likely gain an advantage over their competitors.
Businesses that fail to adapt to changing market conditions will likely gain an advantage over their competitors.
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What is competition and how does it affect businesses?
What is competition and how does it affect businesses?
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Study Notes
Markets and Marketing
- Markets are places where buyers and sellers exchange goods and services
- Markets can exist without buyers and sellers physically meeting
- Customer goods markets include products like food, cosmetics, and magazines
- Markets for services include things like haircuts and auditing
- Housing markets involve buying, selling, and renting properties
- Commodity markets trade raw materials like oil, copper, wheat, and coffee
- Financial markets trade currencies and financial products
- Marketing is a range of activities helping businesses sell products
- Marketing includes identifying consumer needs and wants
- Designing products to meet those needs
- Understanding competitor threats
- Telling customers about products
- Pricing products appropriately
- Persuading customers to buy products
- Making products available conveniently
Mass and Niche Markets
- Mass markets sell the same products to all consumers in the same way (e.g., soft drinks, water)
- Mass market advantages: huge market, possible to gain profit, economies of scale, lower average costs
- Mass market disadvantages: high competition, businesses may need to spend more on marketing
- Niche markets target a small segment of the market with specific needs
- Niche market advantages: less competition, opportunity to raise higher prices
- Niche market disadvantages: limited market size, limited sales revenue and profit, may be very few competitors
Market Size and Share
- Market size can be estimated by total sales of all businesses in the market
- Market size can be measured in value (total money spent) or volume (physical quantity sold)
- Market share is the proportion of a market held by a business, product, brand, or number of businesses.
- Calculating market share: (Sales of a business / Total sales in the market) x 100
- Benefits of market share: indicates market leadership, influences business strategy, shows success/failure of strategy.
Brands
- Brands give products unique names to stand out from other market products
- Branding helps companies differentiate, build loyalty, increase product knowledge, create an image, and increase prices.
Online Retailing
- Online retailing involves transactions taking place online
- Advantages of online retailing: broader reach, easier to gather customer data, reduced costs (e.g., staffing, rent)
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Factors Affecting Market Changes
- Market size
- Market nature
- New markets
Innovation and Market Growth
- Market growth can be slow or rapid
- Factors that lead to market growth: economic growth, innovation, social changes.
Adapting to Change
- Markets change constantly
- Companies must adapt to meet changing customer needs.
- Flexibility in the firm's response to these needs
- Market research: helps keep up with the latest market developments.
- Investment: in innovation and technology to stay competitive for several years.
Competition
- Competition is the rivalry among businesses in a market.
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Business Strategies in a competitive market:
- Offering lower prices.
- Differentiating products from rivals.
- High-quality products.
- Effective marketing and promotions.
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Customer Benefits from competition:
- More choices.
- Lower prices.
- Higher quality products.
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