1. 1.6 Understanding markets

2. Candidates should be able to: give examples of types of markets explain the concept of demand define market segmentation list ways of segmenting a market analyse the advantages and disadvantages of segmentation calculate market size, market growth and market share

3. 1.6 Understanding markets What is a market? A market ______________________ ______________________________ Buyers demand products and sellers supply them at a certain price! What is demand? Demand refers to ________________ ______________________________

4. 1.6 Demand What factors affect demand?

5. 1.6 Understanding markets There are three types of market you need to know about: local market national market electronic market

6. 1.6 Advantages of electronic markets

7. 1.6 Disadvantages of electronic markets

8. 1.6 Market segmentation Market segmentation What is market segmentation?

9. 1.6 Market segmentation Market segmentation How can we segment a market?

10. 1.6 Benefits of market segmentation

11. 1.6 Drawbacks of market segmentation

12. 1.6 Using data to understand markets Market analysis is the process of understanding the market through an investigation into the ___________ and ________________. A business will want to know initially three key pieces of information about its market: market size, market growth and market share

13. 1.6 Using data to understand markets Market size Market size is how big a market is! It can be measured by ______________ or by ____________________________

14. 1.6 Using data to understand markets Market share Market share is the proportion of the total market accounted for by one product E.g. if the total market has sales of £625,000 and firm A has sales of £50,000 its market share is

15. 1.6 Using data to understand markets

16. Summary Market size is the measurement of the size of total sales for a whole market either in terms on money (value) or in terms of numbers sold (volume) Market growth is the measurement of the change in market size, usually expressed as a percentage of its original size.

17. 1.6 Using data to understand markets Summary Segments are usually measured in terms of sales value or volume. In the diagram below, segment B is twice the size of segment C:

18. 1.6 Using data to understand markets http://www.tutor2u.net/business/quiz /buss1/markets/quiz.html