CAIE A-Level Business AS: Mass vs Niche Marketing

[Maximum number: 3]

Cobblestone Shoes (CS)

Yazeem is a highly skilled shoemaker. He opened CS in 1975, as a sole trader, to design and repair shoes. When Yazeem set up CS the main target market was professional people who wanted shoes to wear to work or to dress smartly. He produced the shoes using batch production and sold them in his own shop. Each design of shoe was made in a range of sizes and colours.

Abir has suggested that CS should adopt a just in time (JIT) approach to inventory management. By using JIT, she argues, CS would be able to increase its working capital and avoid having money tied up in inventory that might not be used or sold. CS currently has a large number of shoes on display in the shop. There is also a large amount of their
Recently there has a been an increase in low-priced shoes produced for the mass market, which has reduced Yazeem's sales of new shoes. It has also reduced the demand for shoe repairs.

Yazeem's daughter, Abir, is keen to take over the running of CS. She has been fully trained in making shoes and feels that it is time for Yazeem to retire.

Abir thinks that the business should be targeting niche markets. She would like to design and produce unique shoes and use price skimming to increase the profitability of the business.

Abir is also concerned about the contribution made on each batch of shoes. Table 2.1 shows some break-even data for a recent batch of shoes.

Table 2.1 Break-even data about a recent batch of shoes

main raw material, which is leather and must be kept in a climate-controlled storage area.

Abir has already found a new local supplier which is happy to deliver inventory as required.

Explain the term mass market.

Figure for Answer to Question 3.1.5—Mass marketing and niche marketing question 1 — CAIE A-Level Business AS

Indicative content

AO1 Knowledge and understanding

Knowledge of mass market □ (max 1 mark), including:

- Aiming a product or service at the majority of people.

- Made for the large part of the population

- Made for most of the population/market

Allow 'not a segment of the market' or 'all of the market' or 'everyone'.

2(a)(ii)

AO2 Application

Explanation of a characteristic of the mass market (or mass marketing) , including:

- Many different size/colour products

- One size fits all products /standardised

- Customer wants are more general and less specific

- Associated with high output/quantity (than a segment or niche market)

- Associated with low(er) prices (than a segment or niche market)

- May benefit from economies of scale

- Lower risk than niche markets or segmented markets

- High level of competition

- Competition on national/international/global scale.

Context applied to mass market(s) □ , including:

- Relevant example of mass market(s) (including the shoe market)

Must be an example of the market (the people who might purchase canned drinks) - not a product aimed at the mass market (Coke)

Application can be made to PS or any other scenario/context/business/person.

Accept all valid responses.

Guidance in awarding marks

2(a)(ii)

Exemplar and annotations

Mass markets are aimed at everybody . For example, in the shoe market, this might be plain black shoes that anybody could wear which are all the same □ .

Mark

Rationale

3

An answer which starts with the knowledge and then applies it to
mass shoe market, with a
characteristic.

CS can sell in high quantity □ to the whole market □ . At a low
price ${ }^{-}$ .

3

Two characteristics surrounding the
knowledge.

Aiming at the majority of people who might want to buy the
product . For example, customers who might buy a blank T-
Shirt ${ }^{-}$ .

2

Clear knowledge. Some application
through an example.

A mass market is one that is not focussed on a market segment
□ . Therefore, the product could be bought by anyone. It is likely that a large number of people would be potential customers.

1

A reasonable definition but what
follows is more of the same
knowledge.

Mass markets have high sales revenue and products are likely
to have higher price than a niche market × . This could give the
business access to economies of scale □ .

CAIE A-Level Business 3.1.5 Mass marketing & niche marketing

Exam points

3.1.5—Mass marketing and niche marketing question 1