2 Mass & Niche

MARKET

Key term - A Market is a place where buyers and sellers come together to make an exchange → i.e buy and sell and good or service

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MARKETING - The management process responsible for - identifying,anticipating + satisfying customer requirements profitably.

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Key term -  Niche Market

→ occurs when a business focuses on a more specific (usually small) segment of the market

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Key term - Mass Market

→ Occurs when a business focuses on the majority of the market. This usually involves high volume production

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MASS MARKET → A market that is aimed at the general population e.g regular toothpaste

NICHE MARKET → A subset off the main market and addresses a specialist need e.g Jack N Jill Natural toothpaste -suitable for people allergic to mainstream toothpaste

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MASS MARKET CHARACTERISTICS

Pros

  • Large scale production means economies of scale and lower average unit costs
  • Mass marketing is straightforward as everyone is equally targeted
  • Large volume of sales means high revenue
  • High revenue can be pumped into R&D

Cons

  • Lots of competition
  • Homogenous products need to differentiated through marketing which can be expensive
  • High volume production not flexible to demand changes

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A product is sold to all consumers in the same way. For example coca cola- one advert for everyone

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NICHE MARKET CHARACTERISTICS

Pros

  • Charge premium price
  • Easier to target customers
  • Small scale production can be flexible and follow trends
  • Less competition than in the mass markets

Cons

  • Very risky as demand may not me consistent
  • Higher unit costs so no economies of scale
NICHE MARKETS
  •  Profitable markets to be in, often prices charged are higher as consumers in that niche are willing to pay for exactly the right product
  • Profits can often signal more competitors to enter the market
  • Businesses in niche markets have a smaller range of products which make them more risky ventures
  • There can be a problem with the lack of economies of scale as not enough products are sold for the business to be viable
  • The market for some more expensive items may be very limited 

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