Niche Markets Flashcards

1
Q

Define a NICHE MARKET

A

A niche market is a small market segment for a particular product or service. Consumers within the niche have specific characteristics and specialised needs.

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2
Q

What are the advantages of operating in a niche market?

A
  • Specialised products can maximise consumer loyalty
  • Scope to charge a premium price
  • May be little competition
  • More effective and efficient promotion
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3
Q

What are the disadvantages of operating in a niche market?

A
  • Low overall potential revenue
  • High unit costs - limited economies of scale
  • High levels of risk if targeting a single niche
  • Premium price may attract competition, potentially larger businesses
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4
Q

Define a GLOBAL NICHE MARKET

A

A global niche market is a small, specialised part of a global market. Within one country the market is relatively small, but when combined over several countries they provide enough market for a business to enjoy significant demand.

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5
Q

What are the features of businesses operating in global niche markets?

A
  • They provide excellent quality of both product and service
  • They are experts in their field
  • They deeply understand the needs of their customers
  • They innovate to continue to satisfy the needs of their customers
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6
Q

Why would a niche player want to globally expand?

A
  • Opportunities to grow sales and revenue
  • Can help to reduce costs through economies of scale
    Can help to spread risk across countries.
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