Business Topic 2: Identifying a Business Opportunity

Advantages of Mass Marketing:

• Large range of potential customers
• Marketing economies of scale
• Profit margins may be low but profits are still high
• Products aimed at everyone so easier to market products
• Cash flow is steady and regular

Disadvantages of Mass Marketing:

• High profits will attract competitors to the market
• May be difficult to meet consumer needs because the market is so large
• May be difficult to notice changes in the market because of size, so may lose market share.

Advantages of niche marketing:

• Ability to focus on consumer needs and wants and the ability to react quickly to changes.
• Marketing return is high because advertising is well targeted.
• Little competition so can charge high prices.
• Small firms can gain advantage by entering the market first
• Can gain high market share.
• Can gain customer loyalty
• Even better with a patent.

Disadvantages of niche marketing:

• Very specialised so Product Life Cycle could be very short
• Could attract larger firms
• Sales will be low which could be a problem if costs rise.

• Niche businesses can now operate globally because of the internet
• Niche markets are growing quickly.

• Market:Anywhere where buyers and sellers meet
• Can exist on the internet, emails, telephone lines

• Consumer markets:Where consumers interact with businesses
• E.g. Retail outlet

• Industrial market: Business organizations sell to other businesses
• Not to a final consumer
• Businesses use what they've bought to make other products

• Commodity markets: Buying and selling products from the primary sector of industry (HQ in MEDC, factories in LEDCs)

Factors influencing supply:

• Price
• Technology
• Price that can be reached in the market place.
• State of the economy
• Physical constraints: Demand vs