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A LevelBusinessCambridge (CIE)Revision NotesMarketingThe Nature of MarketingMass Marketing and Niche Marketing

Mass Marketing and Niche Marketing (Cambridge (CIE) A Level Business): Revision Note

Exam code: 9609

Lisa Eades

Written by: Lisa Eades

Reviewed by: Steve Vorster

Updated on

Features of mass and niche markets

Mass markets

  • In mass markets, products are aimed at broad  market segments e.g. Kellogg's Cornflakes is an example of a breakfast cereal aimed at the mass market

    • Market segments are groups of consumers who share similar characteristics e.g. age, lifestyle, etc.

    • Mass marketing occurs when businesses sell their products to most of the available market 

    • Production usually happens on a large scale

  • Products are less unique as they are aimed at broad market segments

    • E.g. Primark is an example of a clothing company that focuses its product on the mass market

  • Low average costs due large scale production  economies of scale 

  • Low prices lead to greater affordability and higher sales volumes 

  • Low prices lead to lower profit margins 

Niche markets

  • In niche markets, products are aimed at a subset of the larger market, e.g. gluten free products

    • Niche marketing occurs when businesses identify and satisfy the demands of a small group of consumers within the wider market

    • Production usually happens on a small scale

  • Products are specialised and unique, as they are aimed at narrow market segments 

    • E.g. Louis Vuitton is an example of a fashion company that aims its products at a niche market

  • High average costs due to small-scale production

    • They do not benefit from economies of scale  

  • High prices make products less affordable and lead to lower sales volumes 

  • High prices can allow businesses to earn higher profit margins 

Advantages and disadvantages of mass marketing and niche marketing

Mass marketing

  • There is a range of advantages of selling to a wide audience with similar needs

    • Reaching as many customers as possible using standardised products and promotional strategies can be very cost-effective.

    • However, to stand out from the competition, businesses may need to spend heavily on promotional activity and price reductions

Evaluating mass marketing

Advantages

Disadvantages

  • Larger potential customer base

    • Selling to a broad audience means there are more people who might buy the product, increasing the chances of high sales and profits

  • Economies of scale

    • Producing and selling in large quantities reduces the cost per unit, making production more efficient and increasing profit margins

  • Stronger brand awareness

    • Mass promotion helps build a well-known and trusted brand that is recognised by many consumers

  • Simplified marketing

    • The same product and message can be used for all customers, reducing the cost and complexity of marketing

  • High competition

    • Many businesses compete in mass markets, making it hard to stand out and keep customer attention

  • Less customer loyalty

    • General products may not fully meet individual needs, so customers might easily switch to competitors

  • Expensive marketing campaigns

    • Reaching large audiences through national TV, billboards or online ads can be very costly for businesses

Niche marketing

  • Focusing marketing activity on a smaller, clearly defined segment of the market means a business can meet the specific needs of a targeted group of customers, often with specialised products or services

  • However, with fewer potential customers and higher unit costs, it can be difficult to make large profits in a niche market

Evaluating niche marketing

Advantages

Disadvantages

  • Less competition

    • Fewer businesses operate in niche markets, making it easier to attract and retain customers.

  • Stronger customer loyalty

    • Products are tailored to meet specific needs, helping to build closer and more loyal customer relationships.

  • Can charge higher prices

    • Niche customers are often willing to pay more for exclusive or specialised products

  • Clear brand identity

    • The business can focus its marketing on a specific audience, building a strong and easily recognisable brand

  • Smaller customer base

    • Limited demand can reduce sales and make it harder to grow the business

  • Higher unit costs

    • Smaller-scale production usually means higher costs per item, reducing profit margins

  • Risk of market changes

    • If the niche becomes less popular or trends change, the business could lose most of its customers quickly

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    Author
    Reviewer
    Lisa Eades

    Author: Lisa Eades

    Expertise: Business Content Creator

    Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

    Steve Vorster

    Reviewer: Steve Vorster

    Expertise: Economics & Business Subject Lead

    Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.