AS Business Studies Market Mind Map
- Created by: Doyle004
- Created on: 07-01-17 17:05
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- The Market
- Niche Market
- Often sell a limited product range
- A small market segment
- Opposite of mass marketing
- Less Competition
- Builds up specialist skill and knowledge
- Profit Margins often higher
- Customers tend to be more loyal
- Lack of economies of scale
- Risk of over dependence on a single product
- Vulnerable to market changes
- Mass Market
- Sell the same products to all consumers and markets in the same way
- Huge amounts of customers
- Business produce large quantities at lower unit costs by exploiting economies of scale
- Hevy advertisement costs
- To establish brands and keep them in public eye
- High development costs of products
- Companies must be market orientated
- High innovation + market research costs
- Maximises income
- Allows reduction in average costs through economies of scale
- If one sector declines this is likely to be compensated by growth in other sectors
- Market Segmentation
- A - Upper middle class, higher management professionals
- B - Middle, intermediate management or proffesional
- C1 - Lower middle class, supervisory clerical, junior management
- C2 - Skilled working class, skilled manual workers
- D - Working class, semi or unskilled manual workers
- E - Lowest level of subsistence, state prisoners, casual or lowest grade workers, unemployed
- How can market segmentation improve the quality of market research?
- Behavioural
- Demographic
- Physcographic
- Geographic
- Market Share
- Market Share = (sales of a product or business/total market sales) x 100
- Explains how the overall market is split between the existing competitors
- Good indicator of competitive advantage
- Useful to know the market position, such as market leader, market challenger or market follower
- Dynamic Market
- Changing markets
- Impact of new market entrants
- Impact of technology
- Changing markets
- Market Research
- Primary Data
- Data is specific for what you need to know.
- Latest information from the market place
- Data can often be expensive to collect
- Risk of questionnaire and interview bias
- Research findings may only be useable if comparable back data exists
- Secondary Data
- Easy to collect. Often obtained without cost.
- Good over view of market
- Usually based on actual sales figures or research on large samples
- Data might be slightly out-dated and irrelivant
- Can be expensive if bought from another country
- Qualitative Research
- Essential for important new product development and launches
- Focused on understanding customer needs, wants, expectations = very useful insights for a business
- Expensive to collect and analyse - requires specialist research skills
- Based around opinions - always a risk that sample is not representative
- Quantitative Research
- Numerical data provides insight into relevant trends
- Data relively easy to analyse
- Focuses on data rather than explaining why things happen
- Doesn't explain the reasons behind numerical trends
- Numerical data provides insight into relevant trends
- Primary Data
- Market Mapping
- A map illustrating the range of "positions" that a product can take in a market based on two dimensions that are imporatant to customers
- Niche Market
- Niche Market
- Often sell a limited product range
- A small market segment
- Opposite of mass marketing
- Less Competition
- Builds up specialist skill and knowledge
- Profit Margins often higher
- Customers tend to be more loyal
- Lack of economies of scale
- Risk of over dependence on a single product
- Vulnerable to market changes
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