1.1.1 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.

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

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.