Knockout .Economics-No.1 Economics and Business Studies Tutors
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CHAPTER 1 : Types of business
1. Markets and Marketing
Markets : Markets were places where buyers and sellers would meet to exchange goods
and services. Anywhere to trade goods and services, can be without buyers and sellers
meeting up.
• Customers goods markets : Where products such as food, cosmetics and
magazines are sold.
• Markets for services : these can include services for individuals, such as
hairdressing, or business services such as auditing.
• The housing market : where people buy, sell and let property
• Commodity markets : where raw materials, such as oil, copper, wheat, co ee are
traded.
• Financial markets : where currencies and nancial products are traded.
Marketing : involves a range of activities that help a business sell its products. However,
marketing is not just about selling, it involves
- Identifying the needs and wants of consumers
- Designing products that meet these needs
- Understanding the threat posed by competitors
- Telling customers about products
- Charging the right price
- Persuading customers to buy products
- Making products available in convenient locations.
No part of this resource may be reproduced, distributed, or transmitted in any form by any means for non-personal use
without the prior written permission from Knockout.Economics
fi ff
, Knockout .Economics-No.1 Economics and Business Studies Tutors
www.knockouteconomics.com
Private class, Small Course, Online course :@Knockout.economics
2. The characteristics of mass markets and niche markets
• Mass market : when a business sells the same products to all consumers and markets
then in the same way. Eg. Still water, soft drinks and breakfast cereals
Advantages Disadvantages
1. It is a huge market 1. There will be high competition in the
: Firms can increase sales revenue and mass market.
possible to gain pro t 2. Businesses may need to spend more
2. Producer can achieve economies of
on marketing.
scales
: average cost will be lower
• Niche market : is a small segment- a segment that has sometimes gone “ untouched”
by larger businesses. => sell to small customer group, or speci c needs.
Advantages Disadvantages
1. Firms need to focus on customers 1. It is very small and therefore there will
: Firms can survive by supplying in niche be limited no. of competition
market. 2. It can limited sales revenue and pro t.
2. There will be less competition in the
market, rms can increase opportunity to
raise higher price (premium price)
No part of this resource may be reproduced, distributed, or transmitted in any form by any means for non-personal use
without the prior written permission from Knockout.Economics
fi fi fi fi
, Knockout .Economics-No.1 Economics and Business Studies Tutors
www.knockouteconomics.com
Private class, Small Course, Online course :@Knockout.economics
3. Market size
: The size of a market can be estimated or calculated by the total sales of all businesses
in the market.
3.1 Value : This is the total amount spent by customers buying products.
3.2 Volume : This is the physical quantity of products that are produced and sold.
4. Market share and market penetration : this the term used to describe the proportion
of a particular market that is held by a business, a product, a brand or a number of
businesses or a products.
(Sales of a business /Total sales in the market ) x 100
Bene ts of market share
- It can indicate a business that is a market leader
- It might in uence the strategy or objectives of a business eg. Business who has small
market share may need to set a target of increasing its share by 5 % over a period of
time.
- It may also be an indication of the success or failure of a business / its strategy
5. Brands : are given brand names to distinguish them from other products in the market.
Eg. Toyota, Nike and Apple.
Branding might be used to :
- Di erentiate the product from those of rivals
- Create customer loyalty
- Help product recognition
- Develop an image
- Charge a premium price when the brand becomes strong eg. Chanel / Hermes
No part of this resource may be reproduced, distributed, or transmitted in any form by any means for non-personal use
without the prior written permission from Knockout.Economics
ff fi fl
, Knockout .Economics-No.1 Economics and Business Studies Tutors
www.knockouteconomics.com
Private class, Small Course, Online course :@Knockout.economics
6. Online retailing
: when transaction occurs from the online platforms eg. Internet etc.
Advantages
- Retailers can market their goods to people who prefer to shop from home or who nd it
di cult to get traditional shops. Eg. Finished work late can unable to shop at
department store
- It is easier to gather personal information from customers so that they can be targeted
with other products and o ers in the future
- Selling costs such as sta s eg. Rent fee can be reduced
- Marketing cost will be lower. Eg. Facebook VS television
- Online retailer can reach more customers
7. How markets change?
7.1 The size of market
7.2 The nature of market
7.3 New markets
8. Innovation and market growth
Markets can grow overtime- some rapidly and some slowly . Growth in existing markets
and new markets may occur for the following reasons
- Economic growth
- Innovation
- Social changes
- Changes in legislation
- Demographic changes
9. Adapting to change
Market can change over the period of time. If rms cannot adapt quickly to the changing
needs of customers, they will lost out to rivals that do adapt.
- Flexibility : rms need to be prepared for changed and may develop culture of exibility
in the organisation
- Market research : Business may need to keep in touch with developments of the
market
- Investment : Business need to invest in innovation and technology to source for a long
term
No part of this resource may be reproduced, distributed, or transmitted in any form by any means for non-personal use
without the prior written permission from Knockout.Economics
ffi
fi ffff fi fl fi
www.knockouteconomics.com
Private class, Small Course, Online course :@Knockout.economics
CHAPTER 1 : Types of business
1. Markets and Marketing
Markets : Markets were places where buyers and sellers would meet to exchange goods
and services. Anywhere to trade goods and services, can be without buyers and sellers
meeting up.
• Customers goods markets : Where products such as food, cosmetics and
magazines are sold.
• Markets for services : these can include services for individuals, such as
hairdressing, or business services such as auditing.
• The housing market : where people buy, sell and let property
• Commodity markets : where raw materials, such as oil, copper, wheat, co ee are
traded.
• Financial markets : where currencies and nancial products are traded.
Marketing : involves a range of activities that help a business sell its products. However,
marketing is not just about selling, it involves
- Identifying the needs and wants of consumers
- Designing products that meet these needs
- Understanding the threat posed by competitors
- Telling customers about products
- Charging the right price
- Persuading customers to buy products
- Making products available in convenient locations.
No part of this resource may be reproduced, distributed, or transmitted in any form by any means for non-personal use
without the prior written permission from Knockout.Economics
fi ff
, Knockout .Economics-No.1 Economics and Business Studies Tutors
www.knockouteconomics.com
Private class, Small Course, Online course :@Knockout.economics
2. The characteristics of mass markets and niche markets
• Mass market : when a business sells the same products to all consumers and markets
then in the same way. Eg. Still water, soft drinks and breakfast cereals
Advantages Disadvantages
1. It is a huge market 1. There will be high competition in the
: Firms can increase sales revenue and mass market.
possible to gain pro t 2. Businesses may need to spend more
2. Producer can achieve economies of
on marketing.
scales
: average cost will be lower
• Niche market : is a small segment- a segment that has sometimes gone “ untouched”
by larger businesses. => sell to small customer group, or speci c needs.
Advantages Disadvantages
1. Firms need to focus on customers 1. It is very small and therefore there will
: Firms can survive by supplying in niche be limited no. of competition
market. 2. It can limited sales revenue and pro t.
2. There will be less competition in the
market, rms can increase opportunity to
raise higher price (premium price)
No part of this resource may be reproduced, distributed, or transmitted in any form by any means for non-personal use
without the prior written permission from Knockout.Economics
fi fi fi fi
, Knockout .Economics-No.1 Economics and Business Studies Tutors
www.knockouteconomics.com
Private class, Small Course, Online course :@Knockout.economics
3. Market size
: The size of a market can be estimated or calculated by the total sales of all businesses
in the market.
3.1 Value : This is the total amount spent by customers buying products.
3.2 Volume : This is the physical quantity of products that are produced and sold.
4. Market share and market penetration : this the term used to describe the proportion
of a particular market that is held by a business, a product, a brand or a number of
businesses or a products.
(Sales of a business /Total sales in the market ) x 100
Bene ts of market share
- It can indicate a business that is a market leader
- It might in uence the strategy or objectives of a business eg. Business who has small
market share may need to set a target of increasing its share by 5 % over a period of
time.
- It may also be an indication of the success or failure of a business / its strategy
5. Brands : are given brand names to distinguish them from other products in the market.
Eg. Toyota, Nike and Apple.
Branding might be used to :
- Di erentiate the product from those of rivals
- Create customer loyalty
- Help product recognition
- Develop an image
- Charge a premium price when the brand becomes strong eg. Chanel / Hermes
No part of this resource may be reproduced, distributed, or transmitted in any form by any means for non-personal use
without the prior written permission from Knockout.Economics
ff fi fl
, Knockout .Economics-No.1 Economics and Business Studies Tutors
www.knockouteconomics.com
Private class, Small Course, Online course :@Knockout.economics
6. Online retailing
: when transaction occurs from the online platforms eg. Internet etc.
Advantages
- Retailers can market their goods to people who prefer to shop from home or who nd it
di cult to get traditional shops. Eg. Finished work late can unable to shop at
department store
- It is easier to gather personal information from customers so that they can be targeted
with other products and o ers in the future
- Selling costs such as sta s eg. Rent fee can be reduced
- Marketing cost will be lower. Eg. Facebook VS television
- Online retailer can reach more customers
7. How markets change?
7.1 The size of market
7.2 The nature of market
7.3 New markets
8. Innovation and market growth
Markets can grow overtime- some rapidly and some slowly . Growth in existing markets
and new markets may occur for the following reasons
- Economic growth
- Innovation
- Social changes
- Changes in legislation
- Demographic changes
9. Adapting to change
Market can change over the period of time. If rms cannot adapt quickly to the changing
needs of customers, they will lost out to rivals that do adapt.
- Flexibility : rms need to be prepared for changed and may develop culture of exibility
in the organisation
- Market research : Business may need to keep in touch with developments of the
market
- Investment : Business need to invest in innovation and technology to source for a long
term
No part of this resource may be reproduced, distributed, or transmitted in any form by any means for non-personal use
without the prior written permission from Knockout.Economics
ffi
fi ffff fi fl fi
