Niche Markets (4.3.2)

Question 1

What is Cultural Diversity?

Answer 1

Recognizes the ideas, customs and social behaviour of particular people or society in different global markets. Businesses need to take into account the different cultural behaviours

Question 2

What is a Global Niche Market?

Answer 2

Smaller, specialised parts of a global market, where customers needs are not met by the global mass market.

Question 3

What are groups in these markets called?

Answer 3

Subcultures

Question 4

What are features of a Global Niche markets?

Answer 4

1.Clear understanding of the wants and needs of customers- May have relatively few customers so needs and wants need to be fully understood

2.Emphasis on quality- Need to ensure quality is good as targeting wealthier customers who pay for high value products.

3.Expertise in product area-having highly skilled employees and keeping to date with latest developments to build value for customers.

4.Prioritizing profit over market share-Lucrative and businesses focus on increasing profits that they can re-invest into improving their products/services.

5.Innovation-Ensures products are highly differentiated and maintain a USP.

6.Excellent customer service-usually pay higher prices so expect good customer service.

Question 5

What are the advantages of a Global Niche market?

Answer 5

-Less competition
-Can charge higher prices
-Risks can be reduced

Question 6

What are the disadvantages of a Global Niche market?

Answer 6

-Niche’s are risky as they rely on a small number of customers
-Reduced economies of scale as not mass produced
-Communication may be difficult due to language barriers

Question 7

What do Niche Markets need to adapt to suit global niche markets?

Answer 7

Adapt the marketing mix to suit global niches involves tailoring the 4Ps of marketing (product, price, place + promotion) to meet specific needs and preferences of a particular niche market

Question 8

What are ways in which the 4P’s are adapted?

Answer 8

Product- Modify features of the product to meet the specific needs of the target audience
Price-Adapting price involves offering a pricing strategy that is attractive to the target audience
Promotion-Using marketing communication strategies that resonate with the target audience
Place-Distribution strategy that is convenient for target audience