niche markets

Question 1

what is a niche market?

Answer 1

a smaller part of a large market where products/services focus on a specific need/want

Question 2

what is a global niche market?

Answer 2

small segments of the global market that are characterised by unique and specific needs and preferences.

Question 3

define cultural diversity

Answer 3

cultural diversity is where a range of different societies or people of different origins, religions and traditions all live and interact together
- businesses need to recognise and respect these when undertaking global marketing

Question 4

give examples of some things that aren’t culturally diverse

Answer 4

attitudes towards:
- alcohol/tobacco
- dress
- colours (white is either bridal/funeral wear)

Question 5

features of a global niche market

Answer 5

• Customers with very specific want/needs
• Requires excellent customer service
• Profit is prioritised rather than market share
• Innovation to create exclusivity / high quality
• Occurs more at the luxury end of the market – exclusivity crosses borders easily E.g. custom-built/designed cars, furniture, clothing etc.

Question 6

advantages of selling in a global niche market

Answer 6

• Targeting global markets reduces average costs
• There is less competition and greater customer loyalty in niche markets
• Low PED, prices are likely to be higher and therefore profits may be greater
• Risk may be reduced

Question 7

disadvantages of selling in a global niche market

Answer 7

• Individual market attention required may reduce possible global economies of scale E.g. Some products may require unique ingredients or production techniques
• Co-ordination and communications may be more difficult across different brands and markets