Niche markets

• Niche market = small market segment for a particular product or service.

  -> Consumers within the niche have specific characteristics and specialised needs.
• advantages of operating in a niche market:

  • Specialised products can maximise consumer loyalty
  • Scope to charge a premium price
  • May be little competition
  • More effective and efficient promotion
• Disadvantages of operating in a niche market:

  • Low overall potential revenue
  • High unit costs - limited economies of scale
  • High levels of risk if targeting a single niche
  • Premium price may attract competition, potentially larger businesses
• Global niche market = small, specialised part of a global market. Within one country the market is relatively small, but when combined over several countries they provide enough market for a business to enjoy significant demand.
• features of operating in a global niche market:

  • They provide excellent quality of both product and service
  • They are experts in their field
  • They deeply understand the needs of their customers
  • They innovate to continue to satisfy the needs of their customers
  • Prioritising profit over market share
  • Clear understanding of the wants and needs of customers