Transcript 2.1-The-Marketx

Theme 1: Marketing & People
This theme enables students to understand how businesses identify opportunities and to explore how businesses focus on
developing a competitive advantage through interacting with customers. Students develop an understanding of how businesses
need to adapt their marketing to operate in a dynamic business environment. This theme also considers people, exploring how
businesses recruit, train, organise and motivate employees, as well as the role of enterprising individuals and leaders.
1.1 Meeting customer needs
Subject content
1.1.1 The market
What students need
to learn:
a) Mass markets and niche markets:
• characteristics
• market size and market share
• brands
b) Dynamic markets:
• online retailing
• how markets change
• innovation and market growth
• adapting to change
c) How competition affects the market
d) The difference between risk and uncertainty
What do these types of business have in
common?
• Ferrari
• Kit car company
• The Bear Factory
• Lush Cosmetics
• Tie Rack
They are businesses
that target a
‘Niche market’
Niche Marketing
Niche marketing occurs when a firm targets a small subsection or segment of a larger market
Advantages:
• Premium pricing strategies due to lack of competition
• Greater focus on customer needs
• Unique selling point (USP) and often first mover advantage due to spotting a gap in the market
• Less scope for economies of scale in a niche market so firms can compete with larger organisations
• Less competition so greater market share
Niche Marketing
Disadvantages:
• Lack of economies of scale
• Changes in tastes or fashion can quickly affect the market
• Market growth can see larger firms join the industry
• High profit margins, but low sales can affect the market,
especially during downturns in the economy
Niche Marketing
Discussion
Why did Mars need to find a
niche?
Do you think Mars managed
to identify a market niche for
its new Mars Caramel?
What is the opposite of a niche market?
Mass marketing:
Meeting the needs of a very large number of potential
customers
Any ideas?
Petrol and baked
beans
Can mass market companies
also target a niche market?
Mass Marketing
Mass marketing occurs when a firm targets the whole of the market rather
than a particular segment
Advantages:
Examples?
• Economies of scale leading to lower costs per unit
• Cheaper advertising costs per unit
• Greater brand awareness
• Large target market allowing for high sales revenue
• Bulk buying
Mass Marketing
Disadvantages:
• High levels of competition
• Lower prices and fewer premium products due to less
scope for adding value
• High levels of investment
• Diseconomies of scale
2.13 Effective Marketing
Mass Marketing
Heinz Baked Beans are a market leader in their industry.
Use the above advantages and disadvantages to explain why they are in this position
and what problems they might have because of mass marketing.
You can visit their website for further information at
http://www.heinzbeanz.com/
This one was
banned!
Are these adverts advertising
a brand or a product?
Discuss
2.13 Effective Marketing
Can a business differentiate itself in a mass
market?
• Branding – Pepsi and Coca-Cola
• Clever advertising campaigns
• Different distribution methods – Amazon and Avon
cosmetics
Product differentiation: The degree to
which consumers see a particular
brand as being different from other
brands
Mass vs. Niche
“Most large
markets evolve from
niche markets” R.
McKenna
Market size & Market share
Re-cap
Volume
Value
Market share
I-Pad worksheet…