4.3.2: Niche markets

global niche markets

global niche markets

• similar to niche markets

• target a specific range of people - subcultures

• groups of customers with common interests or hobbies

• customers live in more than one country

• have particular needs not met fully by global mass market

cultural diversity

• impact of cultures on consumption patterns

• varying interests and values

• language, hobbies and interests, economic development, religious norms, social norms, legal systems, weather and climate, history and traditions

features of global niche markets

identify specific needs and wants of small customer group, don’t have to be small, existing in various countries

• economies of scale

  • quantity supplied to global markets is higher

  • quantity produced increases

  • sell enough output to scale up production and lower average costs

  • products must be adapted to meet cultural differences - may reduce opportunity to exploit economies of scale

• limited competition

  • niche markets are small and often left alone by MNCs

  • lower levels of competition

  • less pressure to invest in innovation and keep costs under control

• premium pricing

  • charge premium prices

  • lack of competition

  • consumers pay more to satisfy exact needs and wants

• emphasis on quality

  • commonly high quality products

  • wealthy consumers

  • pay high prices for artisanal craftsmanship, high quality, specialised products

  • high quality customer service

• focus on profit

  • profit-orientated businesses

  • produce smaller quantities than those serving mass markets

  • less likely to be concerned about market share

  • charge premium prices

  • deal with customers on a more individual level

• brand loyalty

  • develop stronger brand loyalty than those serving mass markets

  • needs and wants of customers are met precisely

  • personal customer service

  • fewer customers to accomodate

application and adaptation of the marketing mix to suit global niches

1. product:

   • emphasis on quality

   • marketed as exclusive

   • only some can afford to buy

   • differentiatie standard products to meet exclusive demand

2. price:

   • charge higher prices

   • demand is price inelastic

3. promotion:

   • based around brand name

   • reinforce exclusivity

   • more targeted than mass market promotions

   • have to consider language differences

   • sensitive to national and cultural differences

   • higher promotional costs = impacts price and competitive edge

4. place:

   • careful when selecting distribution channels

   • important for exclusive brands

   • exclusive dealers