Mass and Niche Markets Explained - YouTube

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.

Thanks for watching the video we really  do appreciate you watching to the end  

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