Understanding Markets
- Created by: Chargeorgexx
- Created on: 16-12-14 15:00
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- Understanding Markets
- Definitions
- A Market is where buyers meet sellers
- Inferior goods - products that people turn to when they are less well off, and turn away when they are better off (basic food)
- Luxury goods - products that people buy much more of when they are better off e.g jewellery
- Normal Goods - Products or services for which sales change broadly in like with the economy
- Physical VS Electronic
- Electronic are more price cmpetitive
- Electronic markets do not rely on physical location (footloose)
- The market is easy and quite cheap to entre
- Factors affecting demand
- Price
- The higher the price the less people are able to afford it
- The higher the price the less 'good value' goods will seem to be
- Sometimes cheaqpness ruins image for quality
- Income
- Average income levels rise per year. The more income people have the more they are able t spend
- Unless the product is an "inferior good" (sainsburies basics products), demand should increase as income increases
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- Actions of Competitors
- If competitors launch a brilliant campaign then their sales are likely to go down
- Seasonal Factors
- Price
- Market Size and trends
- Market size is measurement of all the companies within a market place measured by: 1) volume & 2) Value
- Market size is essential in calculating market share which in turn indicates the success or failure of business
- Market share is the proportion of the total market held by one company or product
- Market Segmentation - the acknowledgement by companies that not all customers are the same
- The Market can be broken down into smaller sections in which customers share common characteristics from the same age group to a shared love of Man U
- Sucessful segmentation can increase customer satisfactionc
- Definitions
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