UNIT 1.1: MARKETING AND PEOPLE
The Market
A market can be defined as a place where all the current buyers of a product and/or
service can interact with the providers of those products and services, and where the
opportunity to attract and develop potential buyers for the market can occur.
A market is not dependant on the location or base of such buyers.
The ‘value’ of the market for goods and services is defined by the total value or volume
of the products and services available which satisfy a specific ‘customer need’. For
instance, the value of the toy market is defined by the total value of the toys available
which will meet the needs of people buying toys.
Individual products and services cannot be classified as markets. It is the collection of all
products and services together which satisfy a particular ‘need’ that constitutes a
market. For example, the toy market includes all toys that meet the needs of the
customer or consumer, but a specific model of Action Man or Barbie does not represent
a separate market.
The needs which have to be met in order to be included in a market are those of the
customer and consumer. A customer is identified as the individual who makes the
purchase, while a consumer is considered to be the end user of the product or service.
For example: A parent may purchase a toy, therefore they are the customer. However,
the toy will be used by a child, which makes them the consumer.
Balancing the needs of customers and consumers in a market can be difficult. The
broad categorisations we have used so far are not always relevant or useful to a
business trying to correctly identify a specific group of customers, and their specific
needs, within a larger market. In order to satisfy the needs of customers and
consumers, businesses have to think on a level that is specific to individual subsets of
customers and consumers. We can see this reflected in the different types of markets
that exist within an economy.
The different types of markets include: National markets, Local markets, Electronic and
physical markets.
National markets are located all over the country and can therefore service a large
number of customers. The customers’ needs are satisfied by a variety of businesses
, which provide a range of similar products and services across the country. Most high
street retailers cater for the national market — examples include Waterstone’s and WH
Smith’s. Non-high street business can also have a national presence and cater for the
national market. These businesses offer both tangible and intangible goods and
services. Tangible goods are those that you can physically touch and take away, like a
computer, or a car. Intangible services are those that you experience, rather than
physically touch, such as having your haircut.
Local markets are made up of small businesses and customers located within a
relatively restricted geographic location, like a town or city. Businesses like electrical,
building and roofing services tend to meet the customer needs of people and
businesses based in the same area in which they are located. Having said this, the
development of the internet has made it possible for any business to have an online
presence which they can use to attract customers not necessarily based in the same
geographical location.
Electronic markets provide intangible services across geographical boundaries, making
it an extremely competitive kind of market. Businesses can provide a wide variety of
services over the internet, which allows customers to pay online and not have to
physically go into a shop on the high street. Many businesses are tapping into the
electronic market, as it can give them access to an immense volume of customers
whose needs they can satisfy.
In all kinds of market there is a dominant or mass market. In a mass market, businesses
aim to provide a broad range of good and services which are attractive to a large
number of customers.
There are also smaller niche markets that target a specific group of customers by
offering a specialised and sometimes unique product or service.
Mass markets try to cater to customers from all segments of the market. The aim of a
business competing in a mass market is for to establish itself as the market leader and
secure the most overall sales, which in turn should provide them with the largest
market share.
Niche markets have distinct characteristics which separate them from the mass market.
These include having a fairly small volume of sales, which can lead to their fixed costs
being high, as they can’t buy their raw materials in sufficient bulk to receive a significant
wholesale discount. As a consequence, the cost of the product or service tends to be
high in order to cover the business’s costs. Customers may only be able to acquire the
product or service through a limited number of outlets.
The Market
A market can be defined as a place where all the current buyers of a product and/or
service can interact with the providers of those products and services, and where the
opportunity to attract and develop potential buyers for the market can occur.
A market is not dependant on the location or base of such buyers.
The ‘value’ of the market for goods and services is defined by the total value or volume
of the products and services available which satisfy a specific ‘customer need’. For
instance, the value of the toy market is defined by the total value of the toys available
which will meet the needs of people buying toys.
Individual products and services cannot be classified as markets. It is the collection of all
products and services together which satisfy a particular ‘need’ that constitutes a
market. For example, the toy market includes all toys that meet the needs of the
customer or consumer, but a specific model of Action Man or Barbie does not represent
a separate market.
The needs which have to be met in order to be included in a market are those of the
customer and consumer. A customer is identified as the individual who makes the
purchase, while a consumer is considered to be the end user of the product or service.
For example: A parent may purchase a toy, therefore they are the customer. However,
the toy will be used by a child, which makes them the consumer.
Balancing the needs of customers and consumers in a market can be difficult. The
broad categorisations we have used so far are not always relevant or useful to a
business trying to correctly identify a specific group of customers, and their specific
needs, within a larger market. In order to satisfy the needs of customers and
consumers, businesses have to think on a level that is specific to individual subsets of
customers and consumers. We can see this reflected in the different types of markets
that exist within an economy.
The different types of markets include: National markets, Local markets, Electronic and
physical markets.
National markets are located all over the country and can therefore service a large
number of customers. The customers’ needs are satisfied by a variety of businesses
, which provide a range of similar products and services across the country. Most high
street retailers cater for the national market — examples include Waterstone’s and WH
Smith’s. Non-high street business can also have a national presence and cater for the
national market. These businesses offer both tangible and intangible goods and
services. Tangible goods are those that you can physically touch and take away, like a
computer, or a car. Intangible services are those that you experience, rather than
physically touch, such as having your haircut.
Local markets are made up of small businesses and customers located within a
relatively restricted geographic location, like a town or city. Businesses like electrical,
building and roofing services tend to meet the customer needs of people and
businesses based in the same area in which they are located. Having said this, the
development of the internet has made it possible for any business to have an online
presence which they can use to attract customers not necessarily based in the same
geographical location.
Electronic markets provide intangible services across geographical boundaries, making
it an extremely competitive kind of market. Businesses can provide a wide variety of
services over the internet, which allows customers to pay online and not have to
physically go into a shop on the high street. Many businesses are tapping into the
electronic market, as it can give them access to an immense volume of customers
whose needs they can satisfy.
In all kinds of market there is a dominant or mass market. In a mass market, businesses
aim to provide a broad range of good and services which are attractive to a large
number of customers.
There are also smaller niche markets that target a specific group of customers by
offering a specialised and sometimes unique product or service.
Mass markets try to cater to customers from all segments of the market. The aim of a
business competing in a mass market is for to establish itself as the market leader and
secure the most overall sales, which in turn should provide them with the largest
market share.
Niche markets have distinct characteristics which separate them from the mass market.
These include having a fairly small volume of sales, which can lead to their fixed costs
being high, as they can’t buy their raw materials in sufficient bulk to receive a significant
wholesale discount. As a consequence, the cost of the product or service tends to be
high in order to cover the business’s costs. Customers may only be able to acquire the
product or service through a limited number of outlets.
