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.
