Business Edexcel A-Level Theme 1 Study Notes
Unit 1.1 Meeting Customer Needs
, 1.1 – Meeting Customer Needs
1.1.1 – The Market
• Mass Market: the market aimed at the general population, they are generally marketed to all
consumers in the same way (eg: the reason behind why some Coca-Cola adverts don’t have
talking in them to allow for many countries to have this advert)
• Advantages of Mass Market Operation:
o Large scale production means economies of scale and lower average unit costs
o Mass marketing is straightforward
o Higher revenues caused by larger sales volume
o Revenue can be used into research and development
• Disadvantages of Mass Market Operation:
o High levels of competition
o Homogenous products need to be differentiated
o High volume production may not be able to keep with demand changes
• Niche Market: the subset of the main market and addresses a specialist need, they cater to a
segment of the market that is not yet met by other providers (eg: Rolex and supercar brands)
• Advantages of Niche Market Operation:
o Companies can charge a premium price
o Easy to target a market
o Less competition
o Flexibility and can follow market trends
• Disadvantages of Niche Market Operation:
o Very risky as demand is not constant
o Higher unit costs
o Smaller pool of potential customers
• Market Size: the total of all the sales of all the producers in a market, measured by either volume
of sales (eg: 210,000 cars sold in a year) or value of sales (eg: £400k worth of cars sold in a year)
• Market Share: the proportion (%) of a market taken by a business, producer or brand
• Market Share Formula: (sales of a product ÷ total sales in the market) x 100, expressed as a %
• Dynamic Markets: a market subject to rapid or continuous change
• Online Retailing: the buying and selling of goods online over a website or an application, over 51%
of all purchases are made online, some retailers are only available on the Internet while others
have established an online presence after creating a developed brand
Unit 1.1 Meeting Customer Needs
, 1.1 – Meeting Customer Needs
1.1.1 – The Market
• Mass Market: the market aimed at the general population, they are generally marketed to all
consumers in the same way (eg: the reason behind why some Coca-Cola adverts don’t have
talking in them to allow for many countries to have this advert)
• Advantages of Mass Market Operation:
o Large scale production means economies of scale and lower average unit costs
o Mass marketing is straightforward
o Higher revenues caused by larger sales volume
o Revenue can be used into research and development
• Disadvantages of Mass Market Operation:
o High levels of competition
o Homogenous products need to be differentiated
o High volume production may not be able to keep with demand changes
• Niche Market: the subset of the main market and addresses a specialist need, they cater to a
segment of the market that is not yet met by other providers (eg: Rolex and supercar brands)
• Advantages of Niche Market Operation:
o Companies can charge a premium price
o Easy to target a market
o Less competition
o Flexibility and can follow market trends
• Disadvantages of Niche Market Operation:
o Very risky as demand is not constant
o Higher unit costs
o Smaller pool of potential customers
• Market Size: the total of all the sales of all the producers in a market, measured by either volume
of sales (eg: 210,000 cars sold in a year) or value of sales (eg: £400k worth of cars sold in a year)
• Market Share: the proportion (%) of a market taken by a business, producer or brand
• Market Share Formula: (sales of a product ÷ total sales in the market) x 100, expressed as a %
• Dynamic Markets: a market subject to rapid or continuous change
• Online Retailing: the buying and selling of goods online over a website or an application, over 51%
of all purchases are made online, some retailers are only available on the Internet while others
have established an online presence after creating a developed brand
