A niche market refers to a group of potential customers with similar characteristics and similar interest towards a particular product or service. Marketing niche strategy identifies these similar needs to create a niche market from a potential market segment.
The advantage of launching or promoting a product for a niche market is the ease with which the potential customers can be identified and targeted. It reduces considerably the expenditure on promotion and launch activities.
The marketers divide the potential market segment into niche markets such as market for second hand cars, wedding cakes, etc. For instance, Ford manufactures Ferrari and Austin Martin for the niche segment of high rich class.
Sometimes the expected niche markets turn out to be mass markets owing to the huge demand for the product or service as in the case of Apple when it launched its PC in early 1980s. The niche market of PCs became a mass market with subsets such as educational PCs.
One disadvantage of niche marketing is its limited potential which is soon saturated. In such a case, the marketer has to develop or produce a different product to satisfy the new needs of the market.
Niche market is recognized as a type of focus strategy in which the manufacturer focuses his attention on satisfying the needs of a selected target market. When products cannot be customized to individual needs, marketing niche strategy is adopted.
Cultural and social differences in a community of potential customers lead to the development of niche markets to satisfy the different needs of different groups and make the changes to the product or service. Exclusive rights such as patents, brand.
Trademarks, etc also result in the formation of niche market where the manufacturer enjoys total control over the niche market due to his differentiated product or service. Delivery channels are another factor leading to the creation of niche markets.
Marketing niche strategy is an important tool to sustain...