Podcast
Questions and Answers
What is the main focus of niche marketing?
What is the main focus of niche marketing?
- Maximizing economies of scale
- Attracting competition to increase market share
- Developing products for a small segment of a larger market (correct)
- Selling the same product to the whole market
Why can small firms thrive in niche markets according to the text?
Why can small firms thrive in niche markets according to the text?
- They have a large volume of products to sell
- There are no competitors in niche markets
- They can benefit from economies of scale
- They can focus on the needs of just one customer group (correct)
What is a limitation of niche marketing as mentioned in the text?
What is a limitation of niche marketing as mentioned in the text?
- Lack of economies of scale (correct)
- High risk of attracting competition
- Large amount of sales compared to mass marketing
- Ability to sell the same product everywhere
In mass marketing, what is a significant advantage mentioned in the text?
In mass marketing, what is a significant advantage mentioned in the text?
Which factor makes firms likely to attract competition in niche markets according to the text?
Which factor makes firms likely to attract competition in niche markets according to the text?
Why do customers in niche markets tend to be willing to pay more for products?
Why do customers in niche markets tend to be willing to pay more for products?
What is market segmentation?
What is market segmentation?
Why is market segmentation advantageous?
Why is market segmentation advantageous?
Why is it difficult to target niche markets?
Why is it difficult to target niche markets?
What is a limitation of not being able to charge a higher price than the competition?
What is a limitation of not being able to charge a higher price than the competition?
How does product distribution differ based on market segmentation?
How does product distribution differ based on market segmentation?
In which case would a company distribute products through popular retail stores?
In which case would a company distribute products through popular retail stores?
Flashcards
Niche Marketing
Niche Marketing
Developing products specifically for a small, specialized group within a larger market.
Why small firms thrive in niche markets
Why small firms thrive in niche markets
Small firms can focus their resources and expertise on meeting the specific needs of a single customer group.
Limitation of niche marketing
Limitation of niche marketing
Niche markets often have low production volumes, making it difficult to benefit from cost savings associated with mass production.
Economies of scale
Economies of scale
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Why niche market success attracts competition
Why niche market success attracts competition
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Why customers pay more in niche markets
Why customers pay more in niche markets
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Market Segmentation
Market Segmentation
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Advantage of market segmentation
Advantage of market segmentation
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Difficulty in targeting niche markets
Difficulty in targeting niche markets
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Limitation of not differentiating product price
Limitation of not differentiating product price
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Product distribution based on market segmentation
Product distribution based on market segmentation
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Distributing products through popular retail stores
Distributing products through popular retail stores
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Study Notes
Niche Marketing
- Niche marketing involves targeting a small, specific segment of a larger market with tailored products
- Examples of niche markets include luxury brands like Versace and Clique perfumes, which cater to high-status consumers
- Advantages of niche marketing:
- Small firms can thrive in untapped niches, free from large firm competition
- Firms can charge premium prices due to exclusivity, yielding high profit margins
- Focus on a single customer group allows for targeted product development
- Limitations of niche marketing:
- Lack of economies of scale
- Risk of over-dependence on a single product or market
- Attraction of competition if successful
Mass Marketing
- Mass marketing involves selling the same product to the entire market without targeting specific groups
- Examples of mass marketing include the iPhone, which is sold uniformly across locations and income groups
- Advantages of mass marketing:
- Higher sales volumes compared to niche marketing
- Economies of scale reduce average costs
- Risks are spread across multiple markets
- Greater opportunities for business growth
- Limitations of mass marketing:
- Higher competition
- Inability to charge premium prices
Market Segmentation
- Market segmentation involves dividing a larger market into sub-groups based on shared characteristics and preferences
- Examples of market segmentation include PepsiCo's targeting of the health-conscious market with Diet Coke
- Bases for market segmentation:
- Socio-economic groups (income)
- Age
- Location
- Gender
- Lifestyle
- Product use (home/work/leisure/business)
- Advantages of market segmentation:
- Cost-effective marketing through targeted promotion and distribution
- Increased sales and profitability
- Opportunities for increased sales through tailored marketing
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Description
Learn about identifying and exploiting niche markets through examples like Versace and Clique perfumes. Discover how small firms can thrive in niche markets with advantages like high profit margins and exclusive products.
