Markets

Markets

1. Niche

   • Small target Market
     • Can often charge higher prices
     • Promotional activities will be targeted at just a small subsection of the whole market
     • The target market is well defined with distinct characteristics
     • Identifying small, currently unsatisfied, gaps in the market
   • Advantages of entering niche market
     • Less competition
     • Can become expert at selling to this market segment.
     • Big businesses often concentrate on mass market so smaller businesses may not need to compete
   • Advantages of niche marketing
     • Premium pricing strategies due to lack of competition
     • Greater focus on customer needs
     • Unique selling point (USP) and often first mover advantage due to spotting a gap in the market
     • Less scope for economies of scale in a niche market so firms can compete with larger organisations
     • Less competition so greater market share
   • Disadvantages of niche marketing
     • Changes in tastes or fashion can quickly affect the market
     • Market growth can see larger firms join the industry
     • High profit margins, but low sales can affect the market, especially during downturns in the economy
     • Lack of economies of scale

2. Mass

   • Large target Market
     • The market is not segmented
     • Product appeals to wide range of customers
     • Products are widely available through a range of markets
     • Mass media is used to advertise the products

3. Seasonal

   • Sales peak at certain times of year e.g. B&B bookings in the summer months

4. Trade

   • Selling to other business
     • The technical specification of the product and service provided by as sales person or account manager is likely to be more important than the physical environment

5. Consumer

   • Selling privately to individuals
     • The product and the price may be seen as of equal importance to the physical environment but more important than place e.g. does it matter what channels the product went through to reach the consumer

6. Local

   • business selling to a small geographical area e.g a local butcher

7. Global

   • Across the world e.g. a multinational business such as Nestle

8. Product

   • Products are physical or tangible products e.g. a car or a television

9. Service

   • Services are non physical or intangible

10. Market Data

    • Market size – this is the total value or volume of sales in the market. It can be measured in money terms e.g. £20 million or by the amount sold e.g. 1 million cars
      • Calculated as: Number of units sold x price
    • Market share – this is the proportion of total market sales that a firm has
      • Calculated as: Sales of one firm/Total market sales x 100

11. Market segmentation

    • Behavioural
      • Characterises subgroups based on the behavioural patterns of the consumer rather than their characteristics Reasons for making purchases e.g. needs, emotional, rewards Frequency of purchase e.g. heavy user or light user Time of purchase e.g. seasonal, weekly, late at night Brand loyalty Method of purchase e.g. online Triggers e.g. response to digital marketing
    • Income
      • A common method uses socio-economic groupings A – Higher managerial such as chief executives and directors B – Intermediate managerial such as solicitors, accountants and doctors C1 – Supervisory, clerical or junior professional such as teachers and junior managers C2 – Skilled manual such as plumbers, electricians and carpenters D – Semi and unskilled workers such as refuse collectors and window cleaners E - Pensioners, casual workers, students and unemployed
    • Geographic
      • Geographic segmentation defines market categories based on where people live e.g. regions, citiesor neighbourhoods
    • Demographic
      • Age Gender Level of education Race Religion Family size Stage in life e.g. empty nesters
    • Impact
      • There are a number of benefits for businesses and customers of market segmentation: Advertising can be targeted at specific market segments so that advertising spend is more effective The most profitable and least profitable customers can be identified Least profitable markets can be avoided It becomes easier to identify and launch new products It helps the firm improve existing products and customer service Businesses are better able to meet the specific needs of groups of customers Greater variety of goods and services available in the market