Niche markets Flashcards
Define the term niche market.
A niche market is a small specialised market which caters for a particular product or service.
What is cultural sensitivity?
Having cultural sensitivity, means understanding that people all over the world have different interests and values
What is international business communication?
Having a sensitivity to cultural diversity in communication is the key to smooth international business
For example a business greeting in Japan would be a bow – with different degrees having different meanings
In Western cultures the more familiar business greeting would be a firm handshake
What is cultural diversity?
The phrase ‘Cultural Diversity’ means a range of different societies or people of different origins, religions and traditions all living and interacting together.
In Britain today there is an estimated ‘ethnic minority’ population of just over 4 million.
What is a global niche market?
A global niche market is a very small market in each country, but the combination of all the countries together make enough demand to make the business profitable
A global market niche is a subset of a global market
A global market niche is highly specialised and is characterised by very loyal customers and premium prices
Why should a niche market become global?
All businesses have fixed costs, in a niche business the fixed costs are higher
If the business is selling in a niche then why not sell to this niche across the world and reduce the average costs and spread the fixed costs over more units sold
What are the advantages of selling in a global market niche?
There is less competition and greater customer loyalty in niche markets.
Prices are likely to be higher and therefore profits may be greater.
Risk may be reduced
Specialist products reduce PED and premium prices may be possible
What are the disadvantages of selling a in global market niche?
Some of the possible global economies of scale may not be achievable as each market will need individual attention
Co-ordination and communications may be more difficult across differing brands and markets
Some products may require unique ingredients or production techniques reducing the scope for economies of scale
Explain the products in a global niche market (the 4 Ps).
Products that succeed in global markets are usually at the premium end of the market
A prime example is supercars which appeal to only a small subset of a country’s population, but bought by customers in many countries
Explain the pricing strategy in a global niche market (the 4 Ps).
Global niche markets provide an opportunity for businesses to charge premium prices as the products tend to be more unique
It depends on customer perception, as they will pay what they perceive the product to be worth not its actual value in terms of raw materials
Explain the place (distribution) in a global niche market (the 4 Ps).
Niche products can reach a global audience easily thorough websites
Alternatively agents may be used in other countries apart from the host country e.g. Bentley showroom in Dubai which includes a VIP area
Explain promotion in a global niche market (the 4 Ps).
Promotion is just the communication aspect of the entire marketing function.
In a global niche market the promotion may be more targeted and subtle than in a mass market
The promotional message must be able to reach across cultures
Brands have to be careful not to devalue the brand image by discounting
