4.3.2 - Niche Markets

Question 1

What is a Niche Market?

Answer 1

Small Specialised Market which Caters for a Particular Product or Service e.g. Rolex watch

Question 2

Explain Cultural Sensitivity

Answer 2

Having Cultural Sensitivity –> Understanding that People all over the World have Different Interests and Values
Having Sesitivity to Cultural Diversity in Communication is Key to Smooth International Business - e.g. different greeting rituals –> important for Setting Right Tone for the whole Negotiation

Question 3

Explain Cultural Diversity - Language

Answer 3

• English Not being the Main or even Second Language in Many Countries Caused Problems for British Businesses -> Expansion of EU led to English being Spoken in More Countries –> solves problem

Question 4

Explain Cultural Diversity - Marketing

Answer 4

Other Cultural Differences -> Influence Way a Product is Markerted -> e.g. a Product Name in One Country may have a Totally Different Meaning in Another Countries

Question 5

Explain Cultural Diversity - Colours

Answer 5

Colours have Different Meanings throughout the world –> White in Far East is Associated with Mourning Rather than Black

Question 6

What is a Global Niche Market?

Answer 6

Customers who Live in More than One Country and have Particular Needs that Aren’t met fully by Global Mass Market

• Highly specialised,
• Loyal Customers
• Premium Prices

Question 7

What are Features of Businesses that Operate in Global Market Niches

Answer 7

• Clear Understanding of Needs and Wants of the Market Segment
• Emphasis on Quality
• Prioritise Profit Rather than Market Share

Question 8

2 Advantages of Seling in a Global Market Niche

Answer 8

• Less Compeition and Greater Customer Loyalty
• Prices are Higher than mass markets, profits higher , Demand is More Price Inelastic

Question 9

2 Disadvantages of Selling in a Global Market Niche

Answer 9

• Products Sell in relatively Low Volumes ( compared with Mass Markets), so Profits Need to be High Enough to Make it Worthwhile
• EOS - some of the Possible EOS may Not be Achievable as Each Market will Need Individual Attention

Question 10

Explain 4Ps on Global Niche Markets - Price

Answer 10

• Opportunity to Charge Premium Prices as the Prodiucts are More Unique
• It Depends on Customer Perception, as They will Pay what they Perceive the Products to Be Worth, Not its Actual Value in terms of Raw Materials e.g. Rolex

Question 10

Explain 4Ps on Global Niche Markets - Product

Answer 10

• Products that Succeed in Global Markets are Usually Premium Quality e.g. Luxury Cars
• only appeal to Small Subset of Country’s Population, but bought by Customers in Many Countries

Question 11

Explain 4Ps on Global Niche Markets - Promotion

Answer 11

• Based around Brand Name and Reinforcing the Exlcusivity of Brand - More Targeted than Mass Market Promotion
• Message Must be Able to Reach across Cultures
• Brands must be Careful to Not Devalue Brand Image by Discounting

Question 12

Explain 4Ps on Global Niche Markets - Place

Answer 12

Niche Products can Reach a Global Auidence Easily Through Wesbite ……