UNIT 1 – Marketing &
People
Produced by Félix Gómez-Guillamón Jurado
Notes from all syllabus content
1
, What is a Market?
L.O:
Understand what a market is
Become aware of the market size and characteristics of a market; e.g. mass and niche.
A market is any Place where buyers meet sellers and a good or service is exchanged.
PHYSICAL MARKET VIRTUAL MARKET
Ice cream shop eBay
Restaurant Amazon
Car Dealership Subscription Services
What Impact does the increasing use of virtual markets have on businesses?
Extremely price competitive
Businesses may have to implement a website for their company
Need less employees which means less costs
Pressure to keep costs low
Marketing is key to keeping public eye
New entrants arrive all time, due to ease of entry
Useful for niche businesses- without the high fixed costs associated with the
High Street.
ADVANTAGES OF A PHYSICAL MARKET
Provides employment
Buyer can see product before purchasing
Might be able to negotiate prices of some products
DISADVANTAGES OF A PHYSICAL MARKET
More expensive for customer
Location may be inconvenient for customer.
ADVANTAGES OF A VIRTUAL MARKET
Available 24/7
Wide Variety
Cheap Prices
Cheap to run
2
, DISADVANTAGES OF A VIRTUAL MARKET
Security issues
Waiting for shipping (delivery)
Remote customer service
Threatens local businesses
What is Mass Marketing?
Mass marketing is attempting to create products or services with a universal appeal. It does
not involve targeting a specific type of customer – rather it aims at the whole of the market.
E.g. Toothpaste, Coca-Cola, Ketchup
Mass marketing
Lower Costs and High Sales
higher Profits
Mass Production
Mass Marketing Strategies
PRODUCT
As many substitute products, standing out from the rest is crucial.
PRICE
As prices are likely to be very similar, companies may avoid a price war as this may cut
revenues for everyone. The “Going Rate” is normally charged by all companies in the
market. If there is a market leader, that company may set the price and the rest will
follow the lead (Price leadership).
PROMOTION
Investing heavily in promotion and advertising is common. Very important part of the
Marketing Mix for companies involved in mass markets. Heavy investment in tv
advertising is common – even if small % end up buying the product.
3
, PLACE
Multiple channels often used to sell products
Companies may pay supermarkets to display products more prominently than rivals
Online purchasing is now common – supermarkets also offer “Click and Collect”. The
internet has allowed many businesses access to mass markets – making market even
more competitive.
What are Niche Markets?
A niche market has customers with particular needs and share certain aspects in common –
such as interests or age. There is normally a gap in the market for a business that is prepared
to produce goods or services for the small customer group
Niche Market Strategies
PRODUCT
Offer for a particular market niche. E.g. Michelin Star restaurants
Products is a key element of the marketing mix
PRICE
More flexibility available in pricing (as there´s less competition). Customers may be
prepared to pay higher prices if their specific needs are being met.
PROMOTION
Promotion needs to be more targeted towards the particular target segment
interested in the product. E.g. Trade magazines.
PLACE
Usually more selective in choosing distribution channels (worried about damaging
brand image) e.g. Gucci
Likely to use the internet if at all practical to sell their products and to promote them
also on specialists’ sites.
Dynamic Markets and the effects of competition on the market
Dynamic Markets – A market which is constantly changing with constant innovation very often
prevalent. It is associated very often with changing trends and changing demand for particular
types of products and services.
Non- Dynamic market example: Rubbers or pencils
Dynamic market examples: Clothing, Phone, or car industry
4
People
Produced by Félix Gómez-Guillamón Jurado
Notes from all syllabus content
1
, What is a Market?
L.O:
Understand what a market is
Become aware of the market size and characteristics of a market; e.g. mass and niche.
A market is any Place where buyers meet sellers and a good or service is exchanged.
PHYSICAL MARKET VIRTUAL MARKET
Ice cream shop eBay
Restaurant Amazon
Car Dealership Subscription Services
What Impact does the increasing use of virtual markets have on businesses?
Extremely price competitive
Businesses may have to implement a website for their company
Need less employees which means less costs
Pressure to keep costs low
Marketing is key to keeping public eye
New entrants arrive all time, due to ease of entry
Useful for niche businesses- without the high fixed costs associated with the
High Street.
ADVANTAGES OF A PHYSICAL MARKET
Provides employment
Buyer can see product before purchasing
Might be able to negotiate prices of some products
DISADVANTAGES OF A PHYSICAL MARKET
More expensive for customer
Location may be inconvenient for customer.
ADVANTAGES OF A VIRTUAL MARKET
Available 24/7
Wide Variety
Cheap Prices
Cheap to run
2
, DISADVANTAGES OF A VIRTUAL MARKET
Security issues
Waiting for shipping (delivery)
Remote customer service
Threatens local businesses
What is Mass Marketing?
Mass marketing is attempting to create products or services with a universal appeal. It does
not involve targeting a specific type of customer – rather it aims at the whole of the market.
E.g. Toothpaste, Coca-Cola, Ketchup
Mass marketing
Lower Costs and High Sales
higher Profits
Mass Production
Mass Marketing Strategies
PRODUCT
As many substitute products, standing out from the rest is crucial.
PRICE
As prices are likely to be very similar, companies may avoid a price war as this may cut
revenues for everyone. The “Going Rate” is normally charged by all companies in the
market. If there is a market leader, that company may set the price and the rest will
follow the lead (Price leadership).
PROMOTION
Investing heavily in promotion and advertising is common. Very important part of the
Marketing Mix for companies involved in mass markets. Heavy investment in tv
advertising is common – even if small % end up buying the product.
3
, PLACE
Multiple channels often used to sell products
Companies may pay supermarkets to display products more prominently than rivals
Online purchasing is now common – supermarkets also offer “Click and Collect”. The
internet has allowed many businesses access to mass markets – making market even
more competitive.
What are Niche Markets?
A niche market has customers with particular needs and share certain aspects in common –
such as interests or age. There is normally a gap in the market for a business that is prepared
to produce goods or services for the small customer group
Niche Market Strategies
PRODUCT
Offer for a particular market niche. E.g. Michelin Star restaurants
Products is a key element of the marketing mix
PRICE
More flexibility available in pricing (as there´s less competition). Customers may be
prepared to pay higher prices if their specific needs are being met.
PROMOTION
Promotion needs to be more targeted towards the particular target segment
interested in the product. E.g. Trade magazines.
PLACE
Usually more selective in choosing distribution channels (worried about damaging
brand image) e.g. Gucci
Likely to use the internet if at all practical to sell their products and to promote them
also on specialists’ sites.
Dynamic Markets and the effects of competition on the market
Dynamic Markets – A market which is constantly changing with constant innovation very often
prevalent. It is associated very often with changing trends and changing demand for particular
types of products and services.
Non- Dynamic market example: Rubbers or pencils
Dynamic market examples: Clothing, Phone, or car industry
4
