Factors that can affect a Market:
- Demand
- Products available
- Pricing stratifies
- Competition
- Recession/Current Climate
- Social Influences (Trends)
- Production costs
- Start up Costs/ Running Costs
- Distribution Costs
- Employs wages
- Amount of Sale
- Products available
- Overhead Cots
- Legislation
- Location
- Distribution
- Market influence
- Supply and Demand
- Demographics
- Psychographics
Non - Geographical Markets – An increasing range of products are bought and sold without buyers and sellers ever meeting e.g. online shopping.
Geographical Markets – Where customers are able to interact/ meet with buyers/sellers e.g. a supermarket.
-Markets are classified by the number of firms who trade within them and the degree of competition.
-Businesses are heavily influenced by the markets in which they trade. The size of the market is measured on the nature of the product they supply and the amount they sell.
Factors that have made markets more Competitive:
- Diversification/ Variety of products – influx of new products
- Pricing strategies
- Location
- Distribution
- Size of the market – increase in competitors or number of businesses
- Government influence – Tax rates/ VAT charges
- If the market is decreasing?
- New competitors entering the market
- Products positioning on life cycle
- Selling of similar products
- Overheads/distribution costs can be increase
Competition
Prefect Competition – Perfectly competitive marks have small firms producing virtually identical products at very similar process. There is no identified Market Leaser and the firms have similar sales and are very equal. Examples – Plumbing, Hairdressers, Gardeners.
Imperfect Competition – One identified Market Leader who controls vast majority of the sales.
A Cartel – Operates when a group of producers collude to set prices and sometimes to share out markets. Cartels are illegal in most countries.
Oligopoly – A few large firms mainly competing through non price completion. Firms compete through advertising, offers and product quality. Takeovers and mergers are commonplace. These firms consider their consumers reaction and feedback as well as monitor competitor’s decisions. Examples – Petrol retailing, Chocolate Manufacture.
Monopoly – Simple producer making up a market. Products can become obsolete die to lace of completion. Resources are often used inefficiently. Example – Virgin Trains.
Possible benefits that perfectly competitive markets offer to consumers
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