Topic:
The
Market
Theme
1:
Section
1.1
Meeting
Customer
Needs
What
You
Need
to
Know
• Niche
and
mass
marketing
• Market
size
&
growth
• Market
share
• Dynamic
markets
• How
competition
affects
markets
• Risk
and
uncertainty
Niche
and
Mass
Marketing
One
way
of
analysing
the
differences
between
markets
is
to
make
a
distinction
between
niche
and
mass
markets.
This
is
a
similar
idea
to
market
segmentation,
although
it
is
based
more
on
the
overall
characteristics
of
a
market
(e.g.
size,
extent
of
product
differentiation)
than
other
ways
in
which
customer
needs
and
wants
are
different.
Niche
Marketing
Where
a
business
targets
a
smaller
segment
of
a
larger
market,
where
customers
have
specific
needs
and
wants
Mass
Marketing
Where
a
business
sells
into
the
largest
part
of
the
market,
where
there
are
many
similar
products
offered
by
competitors
The
key
features
of
a
mass
market
(reverse
these
to
identify
key
features
of
a
niche)
are:
• Customers
form
the
majority
in
the
market
• Customer
needs
and
wants
are
more
“general”
&
less
“specific”
• Associated
with
higher
production
output
and
capacity
+
potential
for
economies
of
scale
• Success
usually
associated
with
low-‐cost
(highly
efficient)
operation
or
market
leading
brands
So,
given
that
a
mass
market
is
a
larger
opportunity,
why
might
a
business
want
to
target
a
niche?
As
with
all
marketing
choices
there
are
potential
benefits
and
drawbacks:
Advantages
of
Targeting
a
Niche
Disadvantages
of
Targeting
a
Niche
Less
competition
-‐
a
“big
fish
in
a
small
Lack
of
economies
of
scale
pond”
Risk
of
over
dependence
on
a
single
Clear
focus
-‐
target
particular
customers
product
or
market
Builds
up
specialist
skill
and
knowledge
Likely
to
attract
competition
if
successful
Can
often
charge
a
higher
price
Vulnerable
to
market
changes
–
all
“eggs
Profit
margins
often
higher
in
one
basket”
Customers
tend
to
be
more
loyal
Market
Size
As
the
name
implies,
market
size
is
a
measure
of
the
total
available
demand
for
competitors
in
a
market.
Key
points
to
remember
about
market
size
are:
• It
indicates
the
potential
sales
for
a
firm
(the
“size
of
the
prize”)
© tutor2u http://www.tutor2u.net
The
Market
Theme
1:
Section
1.1
Meeting
Customer
Needs
What
You
Need
to
Know
• Niche
and
mass
marketing
• Market
size
&
growth
• Market
share
• Dynamic
markets
• How
competition
affects
markets
• Risk
and
uncertainty
Niche
and
Mass
Marketing
One
way
of
analysing
the
differences
between
markets
is
to
make
a
distinction
between
niche
and
mass
markets.
This
is
a
similar
idea
to
market
segmentation,
although
it
is
based
more
on
the
overall
characteristics
of
a
market
(e.g.
size,
extent
of
product
differentiation)
than
other
ways
in
which
customer
needs
and
wants
are
different.
Niche
Marketing
Where
a
business
targets
a
smaller
segment
of
a
larger
market,
where
customers
have
specific
needs
and
wants
Mass
Marketing
Where
a
business
sells
into
the
largest
part
of
the
market,
where
there
are
many
similar
products
offered
by
competitors
The
key
features
of
a
mass
market
(reverse
these
to
identify
key
features
of
a
niche)
are:
• Customers
form
the
majority
in
the
market
• Customer
needs
and
wants
are
more
“general”
&
less
“specific”
• Associated
with
higher
production
output
and
capacity
+
potential
for
economies
of
scale
• Success
usually
associated
with
low-‐cost
(highly
efficient)
operation
or
market
leading
brands
So,
given
that
a
mass
market
is
a
larger
opportunity,
why
might
a
business
want
to
target
a
niche?
As
with
all
marketing
choices
there
are
potential
benefits
and
drawbacks:
Advantages
of
Targeting
a
Niche
Disadvantages
of
Targeting
a
Niche
Less
competition
-‐
a
“big
fish
in
a
small
Lack
of
economies
of
scale
pond”
Risk
of
over
dependence
on
a
single
Clear
focus
-‐
target
particular
customers
product
or
market
Builds
up
specialist
skill
and
knowledge
Likely
to
attract
competition
if
successful
Can
often
charge
a
higher
price
Vulnerable
to
market
changes
–
all
“eggs
Profit
margins
often
higher
in
one
basket”
Customers
tend
to
be
more
loyal
Market
Size
As
the
name
implies,
market
size
is
a
measure
of
the
total
available
demand
for
competitors
in
a
market.
Key
points
to
remember
about
market
size
are:
• It
indicates
the
potential
sales
for
a
firm
(the
“size
of
the
prize”)
© tutor2u http://www.tutor2u.net
