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 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: 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 Examples?

2.13 Effective Marketing 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 You can visit their website for further information at 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. This one was banned! Are these adverts advertising a brand or a product? Discuss

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…