1.1.1 The market


The market

What is a market?

  • A place where buyers and sellers can connect with each other in order to exchange goods or services for money.
  • Mass market - This is the market that is aimed at the general population.
  • Niche market - This is a subset of the main market and addresses a specialist need.

Mass market pros and cons

  • Economies of scale
  • Marketing is straightforward
  • Large volume of slaes mean high revenue
  • Lots of competition
  • Not flexible to demand changes
  • Marketing can be expensive.


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The market

Niche market pros and cons

  • Charge premium prices
  • Easier to target customers
  • Flexible and able to follow trends
  • Less competition
  • Risky as demand may not be constant
  • No economies of scale.

Market size

  • Is the total volume (amount) of sales in a market or the total value in a market.

Market share

  • The proportion (%) of a market that is taken by a business, product or brand. Callculated using the formula: (sales of x/Total sales in the whole market)x100
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The market

Dynamic Market

  • A market that is subject to rapid or continuous changes. The opposite to this is a staitic market.

Direct vs indirect competition

  • Direct - Occurs between businesses offering similar products that appeal to the same group of consumers.
  • Indirect - Involves businesses offering product that are not in direct competition but serve similar customer needs.

Risk and uncertainty

  • Risk - The potwntial outcomes of a decision are known.
  • Uncertainty - None of the outcomes are known in advance.
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