Niche & Mass Markets

Purpose of marketing

Anticipating demand, Recognising demand, Stimulating demand, and Satisfying demand.

Main marketing aims and objectives

Understanding customers wants and needs, Developing new products, Improving profitability, Increasing market share, Diversification, Increasing brand awareness and loyalty.

Concentrated (niche)

Business focuses narrowly on smaller segments or niches. Aim is to achieve a strong market position (share) within those niches.

Segmented (differentiated)

Business target several market segments within the same market. Products are designed and target at each segment. Requires separate marketing plans and often different business units and product portfolios.

Mass marketing (undifferentiated)

Business targets the whole market, ignoring segments, Products focus on what customers need and want in common - not how they differ

Key features of a mass market

Customers form the majority in the market, Customers needs and wants are more general and less specific, Associated with higher production output and capacity, and Success usually associated with low cost operation, heavy promotion, widespread distribution or market leading brands

Disadvantages of marketing to a niche

Lack of 'economies of scale' (these are lower unit costs that arise from operating at high production volumes), Risk of over dependence on single product/market, Likely to attract competition if successful, Vulnerable to market changes

Advantages of niche segmentation

Less competition, Clear focus - target particular customers, Builds up specialist skills and knowledge - market expertise, Can often charge a higher price - customers pay for expertise, Profit margins often higher, Customers tend to be more loyal

What mass and niche markets decide to aim at

Mass - targeting the largest possible group that may be interested in the product/service. Niche - Developing a product which a small group of customers will be potentially interested in. In most markets there is one dominant (mass) segment and several smaller (niche) segments.

Types of market

Mass Market and Niche Market.

3 main kinds of approaches to market targeting

Mass marketing (undifferentiated), Segmented (differentiated), Concentrated (niche)

Definition of marketing

The management process responsible for identifying, anticipating and satisfying customer requirements profitably.

Mass marketing definition

Where a business sells into the largest part of the market, where there are many similar products on offer

Niche marketing definition

Where a business targets a smaller segment of a large market, where customers have specific needs and wants.