2.1.3

The Market

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Niche vs. Mass Markets

Markets can be split into mass segments and niche segments. Their characteristics are different.

Mass market

Mass market

  • The mass market tries to make products and/or services for all consumers.
  • The mass market will be larger and the types of products will be more generalised.
Niche market

Niche market

  • The niche market appeals to a much smaller segment.
  • The niche market will be smaller than the mass market.
  • The niche market provides products and/or services which focus on a specialist want or need.
Examples

Examples

  • In the fast-food industry there are a few dominant players who appeal to the mass market - McDonalds, Burger King, Subway.
  • There is a smaller niche market for healthy fast food. This is addressed by businesses such as Leon.
Benefits and disadvantages of mass markets

Benefits and disadvantages of mass markets

  • Benefits:
    • Having more customers.
    • Benefitting from economies of scale (due to higher output levels).
    • Can build a strong market presence.
  • Disadvantages
    • Higher levels of competition.
    • Lower profit margins
Benefits and disadvantages of niche markets

Benefits and disadvantages of niche markets

  • Benefits:
    • Less competition.
    • Specific market.
    • Can develop specific expertise.
    • Higher profit margins.
    • Customer loyalty.
  • Disadvantages:
    • No economies of scale.
    • Vulnerability because they have an undiverse product portfolio.

Brands

Brands can differentiate one business from a competitor. differentiate competitors. Strong brands can develop strong customer loyalty for a business, leading to larger profits.

What is a brand?

What is a brand?

  • A brand is a good or service that has something which is unique & recognisable. This could be from the way that the product is designed or a different feature.
  • A brand is more likely to become strong if it is easily recognised and distinctive.
Strong brands

Strong brands

  • Strong brands usually benefit from higher customer loyalty. Customers support the brand and will continue to go and buy their products repeatedly.
  • A brand can create higher profitability by itself. Some consumers will pay higher prices for items with a certain brand logo on them (e.g. Nike or Apple).
Retailers

Retailers

  • Retailers try and stock well-known brands on their shelves.
  • However, to try and boost profits, retailers are developing their "own-label' brands.
    • These products undercut big brands by being cheaper but are more expensive than their basic products.
Jump to other topics
1

Exploring Business

1.1

Features of Business Organisations

1.1.1Sole Traders & Partnerships1.1.2Private & Public Limited Companies1.1.3Types of Liability & Not-For-Profits1.1.4Purposes of Businesses1.1.5Purposes of Businesses 21.1.6The Different Economic Sectors1.1.7Multinational Companies1.1.8Stakeholders1.1.9Influence of Stakeholders
1.2

Organisation of Businesses

1.2.1Organisational Structure1.2.2Types of Organisational Structures1.2.3Business Aims & Objectives1.2.4Business Aims1.2.5Business Objectives
1.3

Business Environment

1.3.1External Influences1.3.2Political & Legal Change1.3.3Economic Environment1.3.4Social & Technological Environment1.3.5Lifestyle & Technological Environment1.3.6Corporate Social Responsibility1.3.7The Competitive Environment1.3.8Innovation1.3.9Risk & Uncertainty1.3.10Porter's Five Forces1.3.11SWOT Analysis
2

Marketing Campaigns

2.1

Marketing

2.1.1Setting Marketing Objectives2.1.2Customer Needs2.1.3The Market2.1.4Competition & The Market2.1.5Consumer Behaviour2.1.6Market Research2.1.7Forms of Market Research2.1.8Market Segmentation2.1.9Cultural & Social Factors in Marketing2.1.10Promotional Decisions 32.1.11Pricing Strategies
2.2

Marketing Mix

2.2.1Marketing Mix2.2.2Product Life Cycle2.2.3Pricing Decisions & Price Skimming2.2.4Pricing Decisions & Price Penetration2.2.5Promotional Decisions2.2.6Promotional Decisions 22.2.7Promotional Decisions 32.2.8Market Mapping
3

Business Finance

3.1

Sources of Finance

3.1.1Internal Finance3.1.2External Finance3.1.3External Finance 23.1.4Sources of Business Finance
3.2

Financial Planning

3.2.1Revenue3.2.2Costs3.2.3Cash & Cash Flow3.2.4Cash & Cash Flow 23.2.5Break-Even Analysis3.2.6Profits
3.3

Financial Statements

3.3.1Balance Sheets3.3.2Income Statements3.3.3Liquidity
4

International Business

4.1

Globalisation

4.1.1Growing Economies4.1.2Specialisation & Trade
4.2

International Business

4.2.1Internationalisation4.2.2International Trade4.2.3MNCS4.2.4Conditions that Prompt Trade4.2.5Assessment of a Country
4.3

International Economic Environment

4.3.1Globalisation4.3.2Factors Contributing to Globalisation4.3.3Protectionism4.3.4The EU & the WTO4.3.5Trading Blocs
4.4

Factors Affecting International Business

4.4.1Global Competitiveness4.4.2Ethics of Global Business4.4.3Controlling MNCs4.4.4Cultural & Social Factors in Marketing
5

Principles of Management

5.1

Management & Leadership

5.1.1Managers5.1.2Management Theories5.1.3Managing Organisational Culture5.1.4Management Style
5.2

Theories of Motivation

5.2.1Motivating & Engaging Employees5.2.2Taylor's Theory5.2.3Mayo's Theory5.2.4Maslow's Theory5.2.5Herzberg's Theory
5.3

Managing Change

5.3.1Change5.3.2Key Factors in Change5.3.3Scenario Planning5.3.4Managing Change5.3.5Managing Strategic Implementation
6

Business Decision Making

6.1

Business Principles & Practices

6.1.1Influences in External Environments6.1.2Product Decisions6.1.3Competitive Environment6.1.4Corporate Strategy6.1.5Quantitative Sales Forecasting6.1.6Legislation
6.2

Quality Management

6.2.1Importance of Quality6.2.2Measuring Quality6.2.3Total Quality Management6.2.4Evaluating TQM
6.3

Human Resources

6.3.1Contracts6.3.2Recruitment6.3.3Training a Workforce
6.4

Documents & Business Decisions

6.4.1Sales Forecasts6.4.2Managing Strategic Implementation6.4.3Problems with Strategy

Practice questions on The Market

Can you answer these? Test yourself with free interactive practice on Seneca — used by over 10 million students.

  1. 1
    What are the two types of markets?Fill in the list
  2. 2
    Which market segment appeals to all types of consumers?Multiple choice
  3. 3
    In which market is a business more likely to gain economies of scale?Multiple choice
  4. 4
    In which market is a business more likely to have less competition?Multiple choice
  5. 5
    What can a strong brand lead to?Fill in the list
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Customer Needs

Competition & The Market