Mass and Niche Markets 1.1.1

Market - a market is any place that buyers and sellers will come together to exchange goods or services. There will normally B an exchange of money at a set price.

Niche marketing - A smaller part of a large market, with products tailored to specific customer needs.

Mass marketing - A large market of customers which is undifferentiated and that sells products and services to suit a large number of consumers.

Mass market features:

• Customers form the majority in the market large number of potential customers to attract
• Customers needs and wants are "general" and less "specific"
• Associated with higher production output (makes products in large numbers) and capacity and potential for economies of scale
• Success usually associated with low-cost (highly efficient) operation or market leading brands.
• Products appeal to a wide range of customers
• Products are widely available through a range of markets
• Mass media is used to advertise the product

Example of s mass market is the selling of milk in supermarkets. Milk is sold in many different shops, with the product varying little in quality or looks, therefore being undifferentiated.

Advantages of operating in a mass market:

1. Able to purchase goods and materials in bulk (economies of scale)
2. Dealing with higher volumes of sales which make it easier to afford larger advertising and marketing campaigns.

Disadvantages of operating in a mass market:

1. Competition is likely to be fierce as businesses are attracted to potentially high sales levels
2. Without a USP, it can be difficult to survive e.g. Bounty being the only chooclate bar filled with coconut
   

Niche Markets features:

• Less competition in a specific marker = Higher survival rates
• Able to set own prices due to no competition over price = more profit
• If specific to customers needs and wants, there will be more people willing to pay more money for it.
• Promotional activities will be targeted at just a small subsection of the whole market
• Can often charge higher prices

An example of niche market would be specialised milk such as filteres milk, which is a smaller section of the milk market. Not all shops sell filtered milk, so it is uncommon in terms of its availability. In addition, it is aimed at meeting different customer needs, of those customers who want a product that is perceived as being of a higher quality than ordinary milk.

Advantages of operating in a Niche Market

1. Less competition
2. Can charge at higher price
3. Customers tend to be more loyal
4. Product's can be tailored to meet customer needs

Disadvantages of operating in a Niche Market

1. Fewer customers as it is a smaller part of the larger market
2. Hard to persuade retailers to stock the products 
3. Vulnerable to market changes - all "eggs in one basket" 

GOING FROM A NICHE TO A MASS
For the company to go from the niche market and enter the mass market there are several things that could happen.
1. Forced to lower prices as some stores feel their customers would not pay the expensive prices when there may be close competition offering a similar product for much less.
2. More promotion will be needed so it does not get lost in the sea of other promotional products, meaning more money spent on promotion.
3. Increasing capital, labour, land so that there is a larger volume of the product to sell, but a newly mass market product may not have the means to do this.
4. Competition. Other brands are going to start to re-create the product if it is doing well and sell it for a cheaper price to drive you out of the mass market.