Meaning: - A niche
market is a small market segment. Normally, small firms enter in niche markets,
because the niche segment may be so small that the larger firms may not have
desire to cater (gratify)
such segments. However, there are large and reputed firms that undertake niche
marketing, which include Rolls Royce, Rolex watches and others.
Advantages
of Niche Marketing:
1.
Less
Investment:
-
2.
Less
Risks:
-There may be less risks at the marketing is done to a very
small segment of the market. For example, the risk
3.
Higher
Profits:
- Niche marketing may generate higher profits per unit sold
because of lower operating costs in terms of advertising and other expenses.
However, it is to be noted that niche brands like Veyron Car (the Costliest car
in the world, launched in India in 2010-costs Rs 16 Crore) from Bugatti International makes losses.
4.
Brand
Loyalty:
-Customers may become brand loyal. The customers
may continue to repeat the purchases of the same brand and they may even
recommend it to their friends and others.
5.
Corporate
Image:
- The
niche marketer can earn name and reputation in the market. For instance,
companies like Rolex Watches, Rolls Royce, etc. command a lot of goodwill.
6.
Competitive
Advantage:
-Niche marketers normally face less competition in the
market, as they deal with a specific product for a small segment of the market.
Competitors may not like to enter the market due to small volume of sales.
7.
Customer
Satisfaction:
- Niche
marketing generates customer satisfaction. This is because; the marketer gets
first hand information about customers and accordingly designs the product to
meet the expectations of niche customers.
Specialist Roles open
to Niche Marketers:
-
1.
Geographical
specialist: - Where the nicher sells only in a certain
locality or region.
2.
Product
specialist: - Where the nicher produces only one
product.
3.
Service
specialist: - The firm that offers one or more
services not available from other firms.
4.
Channel
specialist: - The firm specializes in serving only one
channel of distribution.
5.
Quality
specialist: - The nicher operates at the low or high
quality/price market i.e., either high quality-high price market or low quality
–low price market.
6.
End
user specialist: - Where the nicher specializes in serving
only one type of end use customer.
7.
Specific
Customer specialist: - Where the firm sells to one
or a few major customers.
