Understanding Markets

A market can be anywhere physical or non-physical where buyers and sellers come together to exchange goods and services.

The markets can be:

• Physical --> real
• Virtual  --> online
• Local --> only supply to a local town / region
• National --> supply all across the UK
• International --> supply to various countries

Businesses may decide to operate either as B2B (Business to Business) or B2C (Business to Consumer).

Let's get to the mathsy stuff...

Markets can be measured in two ways;

 Volume

Value

C'mon... this is all for the good of learning!!!

One of our first calculations looks at how the market is due to grow. This is where our good ol' friend Homer Simpson comes to the rescue.

Market Growth

Difference in market sizes (units or value)
---------------------------------------------------         x100
Original size








Market Share

This calculation allows us to see how well we are doing in comparison to the rest of the market.

Sales of a business (units or value)

               -----------------------------------------------        x100

Total sales (units or value) in the market

These are all very well but we are nothing without a little thing called DEMAND!

Demand is the amount of goods / services customers are willing and able to spend over a period of time.

This can be affected by things like income, price of a product, what the competitors are offering. Demand is very vulnerable to change.

Market Segmentation

The market is broken into four segments:

• Geographic --> where do you live, where are you from
• Demographic --> your profile; age, gender, socio-economic background
• Psychographic --> our values, beliefs
• Behavioural --> why do we buy the products that we do, are there any patterns?

This segmentation allows for businesses to tailor their marketing and really find ways to develop their products into new market segments.

However there may be a concern that we become so focused on specific market segments that we miss out on entire audiences.

Niche Marketing

I'm a video!!!

Niche marketing is all about finding that gap in the market and then exploiting it. Niche marketing is good for a start-up because it is likely that we will have fewer competitors BUT is there a large enough market for our product or service to make it viable?!

Tune in next time for Transforming Resources... ooooooh....