4.3.2 global niche markets

• global niche market

  small parts of the global market with unique and specific customer needs

  these customer groups are often called subcultures

  although they may be small in one country, they can form a large market when combined globablly
• example global niche brand

  operates globally (30+ countries)

  but target is narrow: people who are willing to pay for luxury, brand prestige, quality

  have small, elite customer base across many countries
• why target a global niche market?

  niche businesses often have higher fixed costs, so selling to the same niche globally helps reduce average costs by spreading fixed costs over more sales
• features of global niche market

  1. excellent customer service = customers paying premium prices expect exceptional service
  2. clear understanding of wants + needs = with a small customer base, businesses must thoroughly understand them
  3. emphasis on quality = exceptional product quality to meet customer's high expectations
  4. expertise in product area = skilled employees who stay updated in the niche market enhance customer value
  5. prioritising profit iver market share = niche markets are profitable, allowing businesses to reinvest earnings into products improvement
  6. innovation = differentiated products with USP
• benefits of operating in a global niche market

  • spread out fixed costs over more sales = more profit
  • add value/USP = set high price
  • increasing customer base
  • increase customer loyalty
  • less competition
  • risk may be reduced
• drawbacks of operating in a global niche market

  • specialised products needs high skilled workers = expensive
  • cannot benefit from economies of scale
  • each market needs individual attention
  • coordination and communication can be more difficult across different brands and markets
• marketing mix - to suit global niche markets

  adapting the marketing mix to suit global niches involves tailoring the 4Ps of marketing to meet the specific needs and preferences of a particular niche market
• adapting product

  • modify the features of the product to meet the specific needs of the target audience
  • eg, change steering wheel on the left when in europe
• adapting price

  • convertin exchange rates
  • local consumer economies
  • modify the features of the product to meet the specific needs of the target audience
• adapting promotion

  • adverts change to different languages depending which country you promote your product
  • local celebrities
  • adapt them and make appealing to local audiences
• adapting place

  • choosing a distribution strategy that is convenient for the target audience 
  • E.g. a business that produces gluten-free products can distribute them through local specialty stores and online platforms to reach customers