mass versus niche marketing

1. Why some markets
become more
competitive

3. Government intervention in
markets
Legal controls- laws against anti-competitive behaviour.
Selling off public sector organisations to the private sector.
Privatisation,
Deregulation- the removal of government controls from an
industry.
Providing financial and other assistance to new and small to
medium sized businesses.- (SEDA- the Small Enterprise
Development Agency)

4. Growth of free trade between
countries
• Free trade: No barriers exist that might prevent trade
between different countries.
• Development of e-commerce and social
networks.
• Own websites;
• Social network sites- facebook
• Increased consumer choice and competition.

5. How businesses respond to
changing spending patterns
and increased competition
• Product development- Market research will identify how the
needs and wants of consumers are changing.
• Improve efficiency- In order to reduce average costs.
• Increased promotion- increasing advertising to persuade
consumers to buy your product and not that of competitors.
• Look for new markets- Sometimes consumer spending patterns
change so much, or the level of competition in a market becomes
so great.

6. • Business
• Develops new products
• Uses resources efficiently to reduce costs and lower prices
• Increases promotional activities, e.g. advertising, money-off
vouchers
• Finds new markets

7. Niche marketing and mass
marketing
• Two types of target markets- niche, or specialist, markets and
mass markets.
• What is Niche marketing?
• Developing products for a small segment of the market.
• Often sell high priced and high status goods= Rolex watches
and Rolls-Royce motor cars.
• Wedding cakes are not high status or high priced.
• What is mass marketing?
• Selling the same product to the whole market.
• flour

8. Benefits and limitations of
niche marketing and mass
marketing.
• Dividing the market so that products better meet the
needs of different types of consumers can help to
increase sales, revenue and profits.
• Benefits of niche marketing-
• Small firms are able to survive and earn profit even in
markets that are dominated by larger firms.
• Less competition, firms do not waste scarce resources
responding to competitor actions.

9. • Consumers will usually pay more for a high status, exclusive
product. This offers firms the opportunity to charge high
prices and earn high profit margins.
• Limitations of niche marketing-
• The opportunity to earn high profits might attract competitors
and this will reduce prices and future profits.
• Economies of scale are unlikely to be achieved. This means
that unit costs are higher than they would be if the product
was sold to a mass market.

10. • Small changes in consumer spending patterns could have a
very significant impact on firms operating in niche markets.
• Benefits of mass marketing
• Mass marketing requires large scale production. Larger firms
often benefit from economies of scale which reduces unit
costs.
• A much larger market has the potential for high sales and
profits.

11. • Changes in consumer spending patterns might have less effect
on firms selling to a mass market. This reduces the risk to
firms who operate in mass markets.
• Limitations of mass marketing
• Much more competition in the market which lowers prices
and profit margins.
• Not all markets are large enough to support a mass marketing
approach.

12. • Consumers today are often looking for something slightly
different from that offered by same product mass marketing.
This has led to greater division of the whole market and
reduced the scope for mass marketing.
• Pg.. 147 Case study