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Niche Markets. What is a niche market?. Niche marketing is the process of finding and serving profitable market segments and designing custom-made products or services for them. Niche marketers are often reliant on the loyalty business model to maintain a profitable volume of sales.

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Presentation Transcript
what is a niche market
What is a niche market?
  • Niche marketing is the process of finding and serving profitable market segments and designing custom-made products or services for them.
  • Niche marketers are often reliant on the loyalty business model to maintain a profitable volume of sales.
characteristics of a niche
Characteristics of a NICHE
  • Low volume of sales
  • High unit costs
  • Therefore high prices
  • (Highly) Differentiated products
  • Targeted promotion
an ideal niche is
An ideal niche is…
  • Large enough to be profitable
  • Sufficiently differentiated
  • Small enough to avoid the attention of the big boys.
  • We have the competence to take advantage of the opportunities offered.
  • Can build up goodwill, to keep customers
advantages
Advantages
  • Less direct competition
  • Clear focus
  • Builds up specialist skills/knowledge
  • Cheaper to set up
  • Able to charge premium prices
  • Build up strong brand image/loyalty
disadvantages
Disadvantages
  • Lack of Economies of Scale
  • Dependent on a small market
  • If successful, will attract competition
  • Small numbers make vulnerable to changes in consumer spending (as does premium pricing)
how to compete with uk supermarkets
How to compete with UK supermarkets?
  • 4 companies account for 74% of grocery shopping in the UK
  • Tesco alone has 30%
  • They are now moving into convenience stores
  • What hope is there for small independent shops?
a niche hope
A niche hope!

E.g.

  • Bakers can survive by offering high quality fresh bread, and specialty pastries.
  • Butchers by latching onto the popularity of organic meat, and home made sausage.
on line
On-line
  • The inter-web can bring hope too.
  • It will make more and more niches profitable!
  • E.g. www.sax.co.uk focuses upon saxophones, and only saxophones.
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