The Market (Theme 1 Edexcel A Level Business)

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These revision notes cover 'The Market', which is the first topic within 'Meeting Customer Needs' in Theme 1 of Edexcel A Level Business.

Specification topic reference: 1.1.1 Edexcel Business.

How to Get an A* in A Level Business

What is a ‘market’?

  • All the buyers and sellers that trade a particular type of product in a particular place.

What’s the difference between mass markets and niche markets?

  • Mass market: aimed at a large group of buyers.
    • Advantage: can benefit from economies of scale – the products sold in mass markets can be cheaper to produce.
    • Disadvantage: high level of competition.
  • Niche market: aimed at a specific group of buyers. Products will often have specialised features.
    • Advantages: less competition, easier to build customer loyalty, higher quality products.
    • Disadvantages: more at risk of changes within the market, e.g. changing consumer tastes; can’t benefit from economies of scale.

What’s the difference between market size and market share?

  • Market size: total value of sales in a market over a certain time period (e.g. a year).
  • Market share: the proportion of the total market that the business holds - their sales as a proportion of the total market size.
  • Mass market businesses: large market size; small market share.
  • Niche market businesses: small market size; larger market share.

What is branding and why is it important?

  • Branding distinguishes businesses from other businesses within the same market.
  • Particularly important for mass market businesses to have strong branding to stand out from competitors.

What are dynamic markets?

  • Markets that rapidly change due to:
    • Consumer preferences changing;
    • Seasonal variation;
    • Economic conditions;
    • Innovation within the market;
    • Environmental regulations changing;
    • Changes in legislation.

How has online retailing changed how markets operate?

  • Beneficial changes:
    • Open 24/7;
    • Access to global market;
    • Can target broader segments of the market;
    • More convenient/efficient/faster for customers;
    • Customers can compare prices.
  • Drawbacks:
    • Technical faults;
    • Security issues; potential for fraud; hacking etc;
    • Can’t see or try on the product;
    • May be difficult to build up customer loyalty.

How might competition affect the market?

  • Direct competition: two firms selling similar products that appeal to the same type of customers.
  • Indirect competition: businesses that sell different products to the same type of customers, e.g. tea and coffee, or different types of restaurants.

How might competition affect a business’s marketing mix?

  • Pricing: firms in a competitive market would have to ensure their products are priced competitively.
  • Products: have to come up with innovative new products; make sure the products are high quality for the price; come up with distinctive product features.
  • Place: increase convenience, e.g. set up stores near customers. Or make the product available online; free delivery etc.
  • Promotion: promotional deals e.g. BOGOF, PR, word of mouth, persuasive advertising, celebrity endorsement.

What’s the difference between risk and uncertainty?

  • Risk: the probabilities of different outcomes can be calculated/estimated.
  • Uncertainties: unknown events, e.g. a pandemic.


Please feel free to leave a comment below if there's anything you'd like clarifying!


Tag: Edexcel Specification A Level Business.


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