In most markets there is one dominant (mass) segment and several smaller (niche) segments.
For example, in the confectionery market, a dominant segment would be the plain chocolate bar. Over 90% of the sales in this segment are made by three dominant producers – Cadbury’s, Nestle and Mars. However, there are many small, specialist niche segments (e.g. luxury, organic or fair-trade chocolate).
Niche marketing can be defined as:
Where a business targets a smaller segment of a larger market, where customers have specific needs and wants
Targeting a product or service at a niche segment has several advantages for a business (particularly a small business):
The main disadvantages of marketing to a niche include:
By contrast, mass marketing can be defined as:
Where a business sells into the largest part of the market, where there are many similar products on offer
The key features of a mass market are as follows:
Knowing the differences between Niche market and mass market can help you decide what kind of products you want to drop ship.