Niche Markets (Edexcel A Level Business)

Cultural Diversity

• Cultural diversity recognises the ideas, customs and social behaviour of a particular people or society in different global markets 

• Businesses need to take into account the different cultural behaviours and customs when operating in overseas markets

  • E.g. In India, beef and pork are not consumed for religious reasons. Fast food outlets have adapted their menu to take this into consideration 

  • E.g. In the United Arab Emirates there are rules around the consumption of alcohol that businesses need to adhere to 

Features of Global Niche Markets

• Global niche markets are small segments of the global market that are characterised by unique and specific needs and preferences

• Groups of customers within these markets are sometimes referred to as subcultures

• These groups may be very small within an individual country, however when combined across the world the number of customers may be significant

  • E.g. Halal products are produced and prepared according to Islamic laws and regulations

  • They are in high demand in Muslim-majority countries and businesses that offer them can tap into this market and cater to the specific needs of Muslim consumers

Features of global niche markets  

Excellent Customer Service

• As customers are usually paying higher prices for the product/ service, they expect exceptional customer service

Innovation

• Innovation ensures that products are highly differentiated and maintain a unique selling point (USP) that meets the needs of the target market

Prioritising profit over market share

• Niche markets are lucrative and businesses focus on increasing profits that they can re-invest into improving their products/services 

Expertise in product area

• Having employees that are highly skilled and keeping up to date with the latest developments within the niche market helps to build value for the customers

Emphasis on quality

• Businesses need to ensure the quality of the product is exceptional as they are targeting wealthier customers who pay for high value products

Clear understanding of the wants and needs of customers

• The business may have relatively few customers so needs to ensure that the needs and wants of these customers is fully understood

Adapting the Marketing Mix to suit Global Niches

• Adapting the marketing mix to suit global niches involves tailoring the 4Ps of marketing (product, price, place, and promotion) to meet the specific needs and preferences of a particular niche market
   

• Product

  • One way to adapt the product to suit a global niche market is to modify the features of the product to meet the specific needs of the target audience

    • E.g. a business that produces luxury watches can offer a line of vegan watches for consumers who are looking for high-quality and exclusive products that are also cruelty-free 

• Price

  • Adapting the price to suit a global niche market involves offering a pricing strategy that is attractive to the target audience

    • E.g. a business that produces organic products can offer competitive prices similar to mainstream products to attract consumers who are looking for healthy and sustainable options

    • Alternatively, a business that produces sustainable fashion can offer a premium price that reflects the exclusive and high-quality nature of the product

• Promotion

  • Adapting the promotion to suit a global niche market involves using marketing communication strategies that resonate with the target audience 

  • E.g. a business that produces luxury products can use influencer marketing to communicate the exclusivity of the product to wealthy customers

• Place

  • Adapting the place to suit a global niche market involves choosing a distribution strategy that is convenient for the target audience 

    • E.g. a business that produces gluten-free products can distribute them through local specialty stores and online platforms to reach customers