4.3.2 Global Niche

Question 1

Global Niche Market

Answer 1

A market where customers in many countries have specific needs and wants that aren’t satisfied by mass market products or services.

• Small market in each country, but the combination of all the countries together make enough demand to make the business profitable.
• Highly specialised and is characterised by loyal customers and premium prices.

Question 2

How do Global Niche markets develop?

Answer 2

• Adapt to cultural differences.
• Specialist expertise developed.
• Different adoption of technology.
• Premium/luxury demand.
• Specialist distribution.

Question 3

Cultural diversity

Answer 3

A range of different societies or people of different origins, religions or traditions all living and interacting together.

Question 4

Factors that influence cultural diversity?

Answer 4

Religion, traditions, interests, history, economic development (disposable incomes, health and education standards), legal systems, weather.

Question 5

Benefits of Global Niche Markets

Answer 5

• Less competition.
• Higher customer loyalty.
• Charge higher prices – more price inelastic.
• Risk spread across many markets.

Question 6

Drawbacks of Global Niche Markets

Answer 6

• Low sales volume, less chance of getting economies of scale so higher unit costs.
• Co-ordination and communication may be more difficult across differing markets.
• Will need to conduct market research – time consuming/costly.
• If firm sells to a limited number of niche markets risk may be high.