The Market
Business: Cambridge International GCSE (2027 Exams), topic 3.1.3
The Market
The term 'market' can be used in 3 different ways.
Place to trade products
- A place where buyers and sellers meet to trade products. This can be a website like eBay or a stock market.
Industry
- An industry for a specific good or service. Businesses often analyse the market for bottled water or the market for games consoles.
Specific group of customers
- We often talk about the market for 16 year olds or the market for retired people (retirees).
- This is often used when talking about a company’s “target market”, which is the group of people that a company aims their product or service at.
Understanding market changes
- Consumer spending patterns may change due to trends, economic factors, or social influences.
- Some markets are becoming more competitive because of new entrants, globalisation, or improved technology.
- Businesses can respond by adjusting prices, improving products, or targeting different customer groups.
- Businesses can calculate market share using the formula:
- Market Share (%) = (Business Sales ÷ Total Market Sales) × 100
Mass markets vs niche markets
- Mass Market: A large market targeting many customers with similar products.
- Advantages: high sales volume, economies of scale.
- Disadvantages: high competition, less personalisation.
- Niche Market: A smaller, specialised market targeting a specific group.
- Advantages: less competition, targeted marketing.
- Disadvantages: limited growth, higher production costs per unit.
Test yourself on The Market
Which of the following can not be described as a market?
What do we call the group of people a company aims their product or service at?