The Market Lesson 1 All to understand the

The Market Lesson 1 • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Starter – How have markets changed? • The market for holidays has changed dramatically over time. In the 1960 s a typical holiday for a UK person might have been an annual two-week family trip to the seaside at Blackpool, Scarborough or Brighton, staying in a caravan, a holiday camp or small hotel. – How has the market for holidays changed over time? – What might have caused these market changes? – How might people choose their holiday destinations? What role does the internet play in the sale of holidays by businesses? • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

What you need to know: • The Market; • Mass and niche markets: – Characteristics of mass and niche – Market size and market share – Brands Rate your current confidence in this topic area in your booklet • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

What do you think is the difference between a niche and mass market? • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Definitions – add into your booklet • Mass Market – this is the market that is aimed at the general population e. g. regular toothpaste • Niche Market – this is a subset of the main market and addresses a specialist needs e. g. Sensodyne toothpaste for sensitive teeth, Rolex watches • How do you think this would affect sales and prices of a product? • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Mass Market Characteristics • A product is sold to all consumers in the same way. E. g. Coca Cola – one advert for everyone. • Which other products are mass marketed? • Branding is very important in mass marketing to install loyalty into customers. E. g. Burger King or Mc. Donalds? • What would be the pros and cons of operating in this type of market? (chart in booklet to complete) • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Mass market (add any extras into your chart) • • Pros Large scale production means economies of scale and lower average unit costs Mass marketing is straightforward as everyone is equally targeted Large volumes of sales means high revenues High revenues can be pumped in to R & D Cons • Lots of competition • High volume production may not be flexible to demand changes All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Niche Market • • Pros Charge a premium price Easier to target customers Small scale production can be flexible and follow trends Less competition than in mass markets Cons • Very risky as demand may not be constant • Often have a small range of products • Higher unit costs so no economies of scale All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Exam Technique – 2 mark questions • What is meant by………………… • How confident do you feel on this type of question to gain full marks? • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Answer the following exam question: • What is meant by a niche market? (2 marks) • 2 marks – no context required, just demonstrate your knowledge with a correct definition • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Self Assessment Mark Scheme Add your mark to the Monitoring Progress chart in your booklets • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

• • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

• • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Answer the Question • Peer Assessment – What went well……. – Even better if ………. – Grade…………. . • Try and improve your answer to gain full marks. • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Mark Scheme • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Understanding Markets – Calculations • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Analysing Market Data • You will be asked to calculate: – Market size – volume and value measures – Market shares - % of the market owned by each competitor. • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Layout of answers • • Write the equation in words Show your calculation State your answer Use the correct values e. g. £, % All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

• • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Market Size E. g. • John is planning to open a car valeting business. His research shows: – Approx 25, 000 cars are valeted in the area each year – Average price is £ 10 • How could we calculate the market size? • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Market Size Calculations • If you sell 5 m units pa and the average price is £ 4, what is the value of the sales? • £ 20 m • If you sell 6 m units pa and the average price is £ 3, what is the value of the sales? • £ 18 m • If you sell 6 m units pa and the average price is £ 4, what is the value of the sales? • £ 24 m • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Market share • The proportion of the total market held by one company or product • More often measured by value • Key test of the success of the year’s marketing activities • Measures a firm’s ability to win or lose against its competitors • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Market share example • Johns valeting business also has the following information on competitors: – – – Sales (£) Share(%) Clean style Worcester valet Auto fresh Others Total £ 250, 000 100% £ 65, 000 £ 45, 000 £ 30, 000 £ 110, 000 • How could we calculate market share? • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Market share calculations • Cleanstyle, which is the market leader with sales of £ 65, 000 out of the total market size of £ 250, 000 • £ 65, 000 / £ 250, 000 = 0. 26 • 0. 26 x 100 = 26% • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

What are the market shares of Tesco, Asda, Sainsburys and Morrisons? • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Market Share Calculations Sheet • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Homework • Complete the calculations sheet by next lesson • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share

Plenary • Review of key terms • Grade your confidence in todays lesson in your booklet. • What do you need to find out more information about? • How could you do this? • Next lesson………. . • • • All to understand the difference between a niche and mass market Most to be build an understanding of exam technique for short answer questions Most to be able to use numerical techniques to calculate market size and share