With reference to the car market, discuss the case for and against engaging in niche marketing as distinct from mass marketing.
Lee-Kim Sy
With reference to the car market, discuss the case for and against engaging in niche marketing as distinct from mass marketing.
A niche market consists of targeting a product or service in small segment of a large market.
A niche market allows firms to target just one type of customer group. This is beneficial to a business within this particular market because it can help clearly focus on what that certain group of customers want and expect from the niche business/industry. In the case of the motor industry, there’s a huge distinction between the volume car producers and the specialist or luxury car producers in relations to the whole production area, especially the target customers. Considering the fact that the specialist or luxury car producers are from the niche market, the potential customers for that specific industry are generally are small. This is because the luxury car producers have produced cars which will attract certain minority group of customers but may not for the majority. What this means is that the luxury producers specialises in offering luxury cars such as Rolls Royce which exceeds at a more higher price of £100,000 than a what you’d expect for an average car price coming from the volume car producers. This is because these cars are uniquely made than an average car. Therefore, since the luxury car producers produce cars at higher prices, the will obviously be smaller amounts of customers which mean smaller demand on units for these cars in contrast to the volume car producers. This shows that the luxury car producers can afford to sell their cars at small units with higher prices because they offer specialised cars that which help distinguish these producers from rival firms of which they know certain groups of customers can afford.
