Edexcel A-Level Business

## Mass markets and niche markets A **market** is any place or system in which buyers and sellers come together to exchange goods and services. Businesses describe the market they sell into by its size and by how many customers it contains. A **mass market** is one with a very large number of customers who buy similar, standardised products. Sales volumes are high and unit prices are usually low, because the producer can spread its fixed costs over a large output and because customers can switch easily between competing brands. Supermarket groceries, mobile phone contracts and mainstream clothing are mass markets. The barrier to success is not finding customers but winning enough of them away from large, well-funded rivals. A **niche market** is a small segment of a wider market whose customers have specific needs that mass-market products do not fully meet. Luxury handmade shoes, vegan cosmetics and equipment for one sport are examples. Niche sellers usually offer a specialised product and can often charge higher prices, since customers have fewer close substitutes and value the fit to their need. The cost is a small customer base, so sales are limited and the business is exposed if tastes change or a larger firm notices the niche and enters it. | | Mass market | Niche market | |---|---|---| | Number of customers | Very large | Small, specific group | | Product | Standardised | Specialised, made for one group | | Sales volume | High | Low | | Typical price | Low per unit |…