in this video we're going to investigate what mass and niche markets are the key features of both
and the advantages and disadvantages of operating in each market
mass and niche markets mass and niche are terms used to explain the type of market a business
is operating in both mass and niche markets have different features and characteristics
that make them different but the key difference between the two is that the business is either
trying to target as many possible customers with their product this is a mass market
or they are targeting a very specific type of customer with very clear wants and needs from
a product this is a niche market focusing on a mass market means being less specific
about the type of customer you're aiming to sell your product to the people who
you want to target may be across different ages genders income brackets and locations
they may also have different buying behaviours and interests however the product is made
less specific to try and capture as many of these customers as possible whereas a niche market
has a strong focus on a specific type of customer and tries to precisely target that customer
by meeting a very specific need that the target customer has by designing the product to meet
their specific requirements next we'll have a look at each market in more detail
features of a mass market as mentioned previously a mass market is aimed at pitching the product at
as many customers as possible within that market a good example of this is coffee a regular jar
of instant coffee such as Nescafe original is an example of a mass market product aimed at everyone
who drinks coffee it's priced so it's affordable to the masses has no specific flavours or claims
such as being organic gluten-free etc is simply instant coffee for people that drink coffee this
product can be purchased from most retailers that sell coffee and is an established brand within the
coffee market so what are you looking for when identifying whether a product is aimed at mass
market well some key features of a mass market are mass production products sold to a mass market
are usually produced in high volumes such as Nescafe original that is a mass-produced product
in factories all around the world widespread availability the product is sold in most retailers
that stock that product category but not only that the item could also be sold in many countries
also online again Nescafe original is sold in 180 different countries worldwide
mass media advertising because the item is aimed at a wide variety of customers their
mass market products are usually advertised using mass media channels such as tv radio and newspaper
this is due to the product not having a specific type of customer
therefore sales will benefit from widespread media coverage there are advantages of operating
in a mass market one of these is the size of the market it's large
but also growth opportunities are high as a larger proportion of the population
of potential customers companies also benefit from cost efficiency through higher economies of scale
giving customers lower prices if they can produce the product on a large scale each item produced
will cost less finally as mentioned earlier widespread availability meaning higher opportunity
to be discovered or repurchased by customers as they see the product on a regular basis
like anything operating in a mass market does have its challenges these are profit margins
profit margins per unit are usually lower due to low prices and competition therefore they have to
rely on volume to improve profits less variety this is because the product is standardized
and relatively uniform in order to cater to a variety of customer needs competition is high
because many companies are present in that market and usually they're big companies for example
Nescafe original has a huge amount of competitors in the instant coffee market if you just look
on the isles of any supermarket there are a lot of different options despite Nestle's dominance
in the instant coffee market there are ways that coffee can also operate in a niche market
features of a niche market a niche product is targeted a smaller group of customers
by meeting more specific needs with the product so rather than trying just to target people who
drink coffee which includes a massive amount of people across many demographics a business can
decide to focus on key features of their product that will meet a very specific customer need
when it comes to coffee this can be done in many ways in the form of different flavours the product
being fair trade and different price points for example a product like vivo magic ground coffee
this is marketed to a niche market as it has very specific claims and features the coffee
is marketed as organic with lion's mane mushroom for brain health ethically sourced third-party
tested for heavy metals vegan fair trade and so on such claims are clearly designed to entice people
other than your average instant coffee drinker vivo is also targeting a more affluent customer
as these specific features of the product are also reflected in the price as it is 15.99
for 280 grams compared to five pound for 300 grams for Nescafe original
both products are coffee however one is trying to include as many customers as possible and one
is targeting a more specific group of customers key features of a niche market are
covers a smaller target group of customers as discussed in the case of vivo coffee
they've been very specific with the product's features and benefits
limited availability vivo will not be found in most corner shops supermarkets or petrol stations
but it does have limited availability mainly being sold online finally targeted media i've never seen
vivo marketed on tv or via mass market channels however once i'd searched vivo for this image
it did start appearing as ads on my Facebook and as targeted google ads as i browse the internet
as it assumed i now had an interest in this product the advantages better profit margins
because of the product meeting specific needs of the customer and with these features being
hard to find other products the company can charge a premium for the product
as seen in the case the price of vivo magic coffee compared to mass market Nescafe original
customer loyalty because the brand is perceived to be unique then it's harder
for consumers to find alternatives that match the exact specifications of this niche product
and therefore they're likely to stay loyal to the brand this results in less competition especially
at first as the product is unique within the category it's being sold in disadvantages
smaller market to sell a product to it just is it's not a mass market product it's very specific
lower economies of scale the market has fewer customers and therefore the product is not
produced on such a mass scale meaning that the product costs more per unit to produce
than something in a mass market finally limited availability such as only being available
online this may mean that customers never discover the product unless they search online
operating in both markets finally one way to reap the benefits of both approaches
is to create products that operate in both mass and niche markets for example Nescafe of their
mass mass-market affordable jar of instant coffee sold in most retailers in Britain it has nearly
five million users of the product each year which is a large percentage of the adult population
on the other hand they also have more niche products that have narrower target markets and
meet specific customer needs such as the dolce gusto range these products aren't stocked as
widely cost more and make up less of Nescafe's overall coffee sales the dolce gusto range has
nearly 850 000 users a year with the cold brew dolce gusto being even smaller than
that by targeting both a mass and niche market nestle who own Nescafe have managed to reap the
advantages of operating in both markets which has also made them the UK's number one coffee brand.
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