What does it mean to pursue a niche strategy? Give a brief example of an organization with which you are familiar that you think does that. [3 Marks]
A typical product marketed using a niche strategy will be easily distinguished from other products, and it will also be produced and sold for specialized uses within its corresponding niche market. The company tries to build the long term relationship with these small set of customers with ensuring it continues to meet or exceed their changing requirements, with time and with the change in market environment.
The niche marketing strategy has following aspects:
1) Unique Needs: The customers in the niche segment should have needs that are different from their general needs and the organization helps them to relate to their requirements in a unique way.
2) Market Size: The market size of the niche segment should be sufficient to support the business and ensure profitability, while operating at the full capacity and further there should be scope of growth also.
3) Competition: Although the business is targeting niche segments, but there would be competitors there too. The product should have some point of differentiation for the consumers to win over and sustain the business.
4) Communication: It is very important to identify the correct niche segment and communicate effectively with them. It is easy and is recommended very highly to maintain the customer.