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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.