Niche and Mass Marketing
Niche Marketing: Where a business targets a smaller segment of a larger market, where customers have specific needs and wants.
Mass Marketing: Where a business sells into the largest part of the market, where there are many similar products offered by competitors.
# Niche Marketing
|Profit margins often higher||Lower sales required to cover costs||Lack of economies of scale||Demand will be relatively low, so manufacturing will have to happen in smaller batches|
|Clear focus||Because they are targeting a niche market, they know exactly what customers want.||If successful likely to attract competition||Other businesses will be interested to expand their market share, because it would lead to greater income.|
|Less competition||A smaller market segment means less businesses will be competing for the custom.||Vulnerable to market change||Because the targeted market is so small, any small change could severely impact the revenue of the company.|
|Customers tend to be more loyal||Because you are tailoring your product or service to them specifically, customers will feel a closer bond.||Risk of overdependence on a single market||Targeting a niche market means that a very small group of people will be customers, so the company will be a lot more dependant on a few individuals.|
# Mass Marketing
|Higher sales||Larger market, more people looking to buy, more sales||Can be difficult to meet all customer demands||You’re targeting a large market segment, meaning that you’re making a one size fits all solution.|
|Higher brand awareness||More people are interested in the product, so more people will be aware of it||Higher advertising costs||More people need to see the advert because the market is larger, which means more money will need to be spent|
|More potential customers||A larger than niche market, so more people might want to buy the product.||More competition||The market is bigger, and as there is more money to be made there will be more people trying to make money in the market.|
|Cost efficient||Economies of scale can be used so unit costs can be reduced.||Less attractive to consumers||Not focused on their needs specifically, so niche markets will be more likely to capture their interest if they exist for that customer.|