4.3.2 Niche markets

Global niche market

Small specialised parts of the global market.

Cultural diversity

The existence of a variety of cultural or ethnic groups within a society.

Features or a business operating in a global niche market

Have a clear understanding of customer needs.

Place great emphasis on quality.

Provide excellent customer service.

Have specialist knowledge in the product area.

Prioritise profit over market share.

Innovate frequently.

Factors that have created global niche markets

The internet and e-commerce.

Social media e.g. ‘vloggers’ and ‘influencers’.

Ease of travel.

Adaption of the marketing mix. They need to distinguish themselves from mass markets. Adapt the 4Ps.

Product

Emphasis on quality. Use highly skilled workers, best raw materials and luxurious packaging. It aims for product differentiation.

Price

High prices. A premium price suggests high quality and therefore desirability. Being able to afford something others cannot may be the attractiveness (snob effect).

Place

More than just location. The way customers consume and the way a product is distributed. Exclusive brands means exclusive distribution networks. Buying experience is as important as the product.

Promotion

Reinforcing the exclusivity of the brand. Needs to be more targeted. Language differences need to be considered.

Benefits of global niche markets

Higher prices (inelastic PED).

High quality brand image.

High customer engagement (small numbers targeted).

Internal EOS.

Drawbacks or global niche markets

Low sales volumes - reduced ability to exploit EOS.

Specialist distribution is expensive.

Marketing mix needs adapting - limited scope for internal EOS.

Co-ordination and communication issues across countries.