10 Do you think operating in a niche market will help a small business have a better chance of success... [12]

[Sir Afzal Shad]

Sofia is a sole trader. She started her successful photography business 30 years ago. She specialises in taking pictures of people and places for use in posters, calendars and fashion magazines. It is a niche market. Sofia uses cost-plus pricing as part of her marketing mix. Offering a high quality service is important to Pamela and her 2 employees.

10 Do you think operating in a niche market will help a small business have a better chance of success than operating in a mass market? Justify your answer. [12]

Possible Points:
Niche market:
> Able to focus more closely on customer’s needs
> Less competition
> May be able to set higher prices (for a high status, exclusive product)
> Can become expert in the segment
> Small size of market means will not benefit from economies of scale
> Less potential for growth / low potential demand
> Over dependence on single product / less able to spread risk / vulnerable to changes in consumer spending patterns
> Likely to attract competition if successful

Mass market
> More (potential) customers/sales
> Increased / high level of competition

Please read the answer of the previous student & if the answer seems well developed don't use the same KN in your answer, try to give new one.