Niche Markets Flashcards
Define a NICHE MARKET
A niche market is a small market segment for a particular product or service. Consumers within the niche have specific characteristics and specialised needs.
What are the advantages of operating in a niche market?
- Specialised products can maximise consumer loyalty
- Scope to charge a premium price
- May be little competition
- More effective and efficient promotion
What are the disadvantages of operating in a niche market?
- 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
Define a GLOBAL NICHE MARKET
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.
What are the features of businesses operating in global niche markets?
- 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
Why would a niche player want to globally expand?
- Opportunities to grow sales and revenue
- Can help to reduce costs through economies of scale
Can help to spread risk across countries.