Distinct from mass marketing
A niche market allows firms to target just one type of customer group. This is beneficial to a business within this particular market because it can help clearly focus on what that certain group of customers want and expect from the niche business/industry. In the case of the motor industry, there’s a huge distinction between the volume car producers and the specialist or luxury car producers in relations to the whole production area, especially the target customers.
Considering the fact that the specialist or luxury car producers are from the niche market, the potential customers for that specific industry are generally are small. This is because the luxury car producers have produced cars which will attract certain minority group of customers but may not for the majority. What this means is that the luxury producers specialises in offering luxury cars such as Rolls Royce which exceeds at a more higher price of i?? 100,000 than a what you’d expect for an average car price coming from the volume car producers.
This is because these cars are uniquely made than an average car. Therefore, since the luxury car producers produce cars at higher prices, the will obviously be smaller amounts of customers which mean smaller demand on units for these cars in contrast to the volume car producers. This shows that the luxury car producers can afford to sell their cars at small units with higher prices because they offer specialised cars that which help distinguish these producers from rival firms of which they know certain groups of customers can afford.
Another factor is that the niche market can also build up specialist skills and knowledge which will be appropriate for the market. This means industries can enhance from their original products by modifying to improve or to add different versions to the market. Since the car industry has to constantly invest in research and development, the luxury car producers has been successful in responding to these changes. Therefore, they’re able to produce cars that are able to meet customer’s requirements.
With cars being modified, helps continue on with the success for that specific car make as well as the entire series. This will require additional costs in order to continue on with the market. But it will mean wider spectrums of customers who can afford these cars are more likely to purchase since they know that it’s being modified thoroughly and regardless of costs it is worth their money for investment. However, although the niche market for the car industry is a good market to be considered, there are a few problems that can be encountered.
Therefore, the mass market can be seen as another alternative for this industry. The mass market is greatly beneficial to provide businesses with opportunities to earn very high income. This also can be effective within the niche market, but for a more secure business a mass market is a better. Since the volume car producers are from the mass market, they’re able to sell their cars to a wider number of people.
This is due to the relative reasonable prices of 8,000 – i?? 25,000 for a car, which many people can afford. From this it means more customers can purchase from the volume car producers which means they can produce good revenue which may lead to good profit. In conclusion, the most effective market for the motor industry is the mass market which is the volume car produces because there are many people who are interested in purchasing cars at affordable prices than for higher prices from the luxury car produces.
This means the mass market are more likely to become successful as a whole because there will always be people who will be interested in purchasing affordable prices cars than for high end cars who generally cater fewer customers. Therefore, since there will be on-going purchases from the volume car producers they’re likely going to become much more successful than the luxury car producers.