Niche and Mass Markets

Mass Market:

• The largest part of the market, where competitors and customers offer many similar products are less specific about their needs and wants

Niche Market:

• A smaller segment of a larger market, where customers have more specific needs and wants

Key features of a Mass Market:

• Customers form the largest part of the market

• Customer needs and wants are more ‘general’ and less ‘specific’

• Associated with higher production output and capacity and potential for economies of scale

• Success is usually associated with low-cost ‘highly efficient’ operation or market-leading brands

Benefits of successful mass marketing:

• Widest potential customer base

• Lower risk- resources focused on one large market

• Low unit costs from economies of scale

• Market research costs are relatively low

Advantages of Niche Markets:

• Less competition- a ‘big fish in a small pond’

• Clear focus- target particular customers

• Builds up specialist skills and knowledge

• Can often charge a higher price

• Profit margins are often higher

• Customers potentially more loyal

Disadvantages:

• Lack of economies of scale

• Risk of over-dependence on a single product or market

• Likely to attract competition if successful

• Vulnerable to market changes- all ‘eggs in one basket’