Marketing & Markets (HL IB Business Management)

• A market is any place where buyers and sellers can meet to conclude a transaction e.g. amazon.co.uk or a shopping mall
  
  
• The aim of marketing is to help identify, anticipate and satisfy consumer needs and wants profitably
  • Needs are considered to be essential e.g. shelter or food
  • Wants are desires which are non essential, even if consumers consider them to be essential e.g Nike trainers
    
    
• Market research is essential in helping businesses to identify products/services they can develop in response to the needs and wants that their customers have
   
• Market research is the process of systematically gathering data from consumers which can be used to influence the business decisions

• Product orientation is an approach to marketing that focuses on the characteristics of the product rather than the needs of the consumer
  • The emphasis will be on creating a product first and then finding a market
  • The business has a belief that the product is superior i.e. it will sell itself
  • One problem with being too product orientated is that over time your business may move further and further away from what the market is looking for, thus increasing the risk of business failure
  • E.g. Gillette's razors can be classed as a product oriented business as the business focuses on the quality of its products and regular innovations aim to increase sales
      

A product orientation is an approach often used by inventors who research, test and produce a product well before market research has taken place
 

• Market orientation is an approach to marketing that focuses on the needs of consumers and uses this information to design products that meet customer needs 
  • Consumers are at the centre of marketing decisions
  • Products will be developed which respond to consumer needs
  • The result of market orientation is that the firm will benefit from increased demand, increased profits, and a valued brand image as its products become more desirable 
  • E.g. Universities often develop new courses based on the feedback they receive from students and employers
     

Market orientation aims to develop products to meet consumer needs identified during the market research process

• In niche markets, products are aimed at a subset of the larger market e.g. gluten free products
  • Niche marketing occurs when businesses identify and satisfy the demands of a small group of consumers within the wider market
  • Production usually happens on a small scale
    
    
• In mass markets, products are aimed at broad  market segments e.g Kellogg's Corn Flakes is an example of a breakfast cereal aimed at the mass market
  
  • Market segments are groups of consumers who share similar characteristics e.g. age, lifestyle, etc.
  • Mass marketing occurs when businesses sell their products to most of the available market 
  • Production usually happens on a large scale
     

Characteristics of  Niche Markets & Mass Markets

Niche Markets

Mass Markets

Products are more specialized and unique as they are aimed at narrow market segments   High average costs due to small scale production They do not benefit from economies of scale    High prices make products less affordable and lead to lower sales volumes   High prices can allow businesses to earn higher profit margin   Louis Vuitton is an example of a fashion company that aims its products at a niche market

Products are less unique as they are aimed at broad market segments   Low average costs due large scale production  economies of scale   Low prices lead to greater affordability and higher sales volumes   Low prices lead to lower profit margins   Primark is an example of a clothing company that focuses its product on the mass market