Mazureac Liliana
BUSINESS
Revision Booklet
Theme 1
,
, Contents
4 1.1 Meeting Customer Needs
10 1.2 Market
14 1.3 Marketing Mix and Strategy
28 1.4 Managing People
49 1.5 Entrepreneurs and Leaders
, Meeting Customer Needs 1.1 Page 4
1.1.1 The Market
Definitions Characteristics:
Mass market - a market that Mass markets are characterised by high sales
targets a large number of volume, standardised products, offering lower
consumers with broadly similar profit margins but high brand recognition
needs using standardised products. allowing for economies of scale to develop.
Niche market - a small, specialised Niche markets are characterised by low sales
segment of a larger market, where volume but high levels of differentiation and
products are tailored to specific greater customer loyalty, where firms compete
consumer preferences. primarily on quality, branding, or uniqueness
rather than price.
Mass Market
+
Economies of Scale: Large-scale production
reduces unit costs, boosting profitability.
-
High Competition: High-volume potential
attracts fierce competition.
High Sales Volume: A massive customer base Lower Profit Margins: High competition often
allows for high revenue potential. pushes down prices.
Brand Recognition: Widespread marketing Generic Products: Products often lack
builds high brand awareness. customization, which can lead to low loyalty.
Risk Spreading: Large companies can afford High Costs: Marketing and advertising to a
to target a broader audience. massive audience is expensive.
Niche Market
+
Higher Profit Margins: Targeted consumers are often
willing to pay higher prices for specialized products.
-
Limited Size: Small target audiences restrict potential
sales volume.
Less Competition: Niche markets are narrower, allowing Lack of Economies of Scale: Lower production volumes
for easier market domination. result in higher average costs.
Higher Customer Loyalty: Focusing on specific needs Dependence Risk: Relying on a single product or niche
creates a loyal customer base. makes the business vulnerable to changes in demand.
Expertise/Specialization: Allows for building a strong Attracts Competition: If a niche becomes profitable, it
reputation and technical expertise in a specific area. may attract larger competitors.
Market size: The total level of sales in a market over a given period, measured in value (£) or volume (units).
Market share: The percentage of total market sales that a business accounts for.
A firm with a high market share is likely to benefit from economies of scale, increased brand recognition, and
stronger bargaining power with suppliers, all of which can enhance competitiveness.
BUSINESS
Revision Booklet
Theme 1
,
, Contents
4 1.1 Meeting Customer Needs
10 1.2 Market
14 1.3 Marketing Mix and Strategy
28 1.4 Managing People
49 1.5 Entrepreneurs and Leaders
, Meeting Customer Needs 1.1 Page 4
1.1.1 The Market
Definitions Characteristics:
Mass market - a market that Mass markets are characterised by high sales
targets a large number of volume, standardised products, offering lower
consumers with broadly similar profit margins but high brand recognition
needs using standardised products. allowing for economies of scale to develop.
Niche market - a small, specialised Niche markets are characterised by low sales
segment of a larger market, where volume but high levels of differentiation and
products are tailored to specific greater customer loyalty, where firms compete
consumer preferences. primarily on quality, branding, or uniqueness
rather than price.
Mass Market
+
Economies of Scale: Large-scale production
reduces unit costs, boosting profitability.
-
High Competition: High-volume potential
attracts fierce competition.
High Sales Volume: A massive customer base Lower Profit Margins: High competition often
allows for high revenue potential. pushes down prices.
Brand Recognition: Widespread marketing Generic Products: Products often lack
builds high brand awareness. customization, which can lead to low loyalty.
Risk Spreading: Large companies can afford High Costs: Marketing and advertising to a
to target a broader audience. massive audience is expensive.
Niche Market
+
Higher Profit Margins: Targeted consumers are often
willing to pay higher prices for specialized products.
-
Limited Size: Small target audiences restrict potential
sales volume.
Less Competition: Niche markets are narrower, allowing Lack of Economies of Scale: Lower production volumes
for easier market domination. result in higher average costs.
Higher Customer Loyalty: Focusing on specific needs Dependence Risk: Relying on a single product or niche
creates a loyal customer base. makes the business vulnerable to changes in demand.
Expertise/Specialization: Allows for building a strong Attracts Competition: If a niche becomes profitable, it
reputation and technical expertise in a specific area. may attract larger competitors.
Market size: The total level of sales in a market over a given period, measured in value (£) or volume (units).
Market share: The percentage of total market sales that a business accounts for.
A firm with a high market share is likely to benefit from economies of scale, increased brand recognition, and
stronger bargaining power with suppliers, all of which can enhance competitiveness.
