Chapter 77- Niche Markets

Question 1

Global Niche Market

Answer 1

Customers who live in more than one country and have particular needs that are not met fully by the global mass market

Question 2

Features of Global Niche Markets-

Answer 2

• A clear understanding of needs and wants of the market
segment
• An emphasis on quality
• Excellent customer service
• Expertise in the product area
• Prioritising profit rather than market share

Question 3

Why are customers prepared to pay a higher price for global brands rather than local equivalents?

Answer 3

Internet – this has proved important as a marketing tool and an opportunity to spread information. With the advent of e-commerce, businesses have been able to spread into foreign markets, and create and meet local demands that would otherwise have been impossible

 Social media – the rise of platforms such as Facebook, twitter and youtube have given birth to a new brand of commentators known as vloggers. Vloggers are growing group who promote niche brands to subscribers.

 Ease of travel – facilitated by low cost airlines – visitors to foreign countries are exposed to well-known global brands, in places far away from their home country.

Question 4

A/D of Niche markets

Answer 4

A - prices are higher than in mass markets - demand is more
price inelastic
- The product is distributed through specialist retailers or
directly to the consumer. This has advantages in terms of
image.

D - Products sell in relatively low volumes compared with mass
markets, so profits need to be high enough to make it
worthwhile
- The niche market must be large enough to support the
business and specialist distribution. The small size may
prevent economies of scale that compete with larger
competitors