4.3.2 Global Niche Markets + 4.3.3 Cultural and Social Differences Flashcards
what is a global niche market
- small segments of the global market that are characterised by unique and specific needs and preferences
- several small niche markets from different countries
advantages of a global niche market
+ Face minimal competition and have high customer loyalty
+ High prices can be charged due to price inelasticity
+ risk spread across several smaller niche markets
disadvantages of a global niche market
- small production scale means high unit costs
- a fall in demand may mean a firm struggles to survive
- low sales volume and revenues
- high profits may attract competition
how can the 4 p’s be adapted for a global niche market
product- must be differentiated especially if there are substitutes
promotion- must highlight quality and uniqueness #
price- premium prices to maintain exclusivity
place- small numbers to high quality outlets to maintain exclusivity
a business must consider cultural and social factors when trading internationally. this could be done through market research and may involve adapting the 4 p’s.
ignoring cultural differences may lead to poor sales or cause offence to some consumers.
why should a business consider different tastes
- tastes vary greatly between cultures
- business must ensure products/services are adapted to meet local preferences
why should a business consider language differences
- they need messages to be translated appropriately so that it is understood
- if not it can be offensive to consumers or have unintended meanings
- firms may need to think about non-verbal communication as this also differs
why should a business consider if their promotion is culturally appropriate
- certain images, colours, and symbols have different connotations across cultures
- if taken offensively it can negatively impact the business’ brand image
