niche markets, niche marketing vs mass market, mass marketing - what is there to confuse?

these words can be confusing to non-marketers, but it will be a fatal error if brand managers get confused by them - mass market, mass marketing versus niche market and niche marketing.

mass market and mass marketing

first, when you say "mass market", it does not mean a brand is targeting or being sold among low income groups. what that means is the general market or that segment of the market where most consumers belong to. products that are mass marketed are those that are sold to almost anyone in the population. it also means these are products that most consumers have a need for.

within that mass market, there may be further segmentation. segmentation can be in many forms, they could be by consumer group, uses or even product attributes, to name a few.

a popular segmentation is pricing. within the general mass market, there will be a pricing segmentation. there will at least be 3 pricing segments - low, medium or high priced. all of these brands can be used by any of the consumers regardless of income of the consumers.

marketers by choice or strategy select a pricing segment. this is driven by profit or margin goals, product attributes or benefits and marketing strategy. the pricing of a product more often than not naturally selects the consumer group it appeals to. but in many cases even the premium priced brands are used by low income groups perhaps not as often by high income groups but occasionally.

the above dynamics presents to the brand manager many options on what kinds of strategies he/she will adapt to gain the market share the brand intends to get.

one can apply mass marketing strategies to any brand, including premium priced brands. apple's macs for example are premium priced but it is being marketed in the mass market from all income groups.

niche markets and niche marketing

niche marketing is a fancy word in marketing. it is fancy because it is hardly used and often misunderstood.

products that do niche marketing and compete in niche markets are highly specialized products, practically customized to a specific consumer group. this consumer is usually very small and sit in the fringe of the mass market.

very often, brands that compete in niche markets are very high priced given the amount and kind of specialization or customization needed for the brand. being high priced also allows for a very high margin.

the best example here are the cellphone brands we are all familiar with - nokias, sony Ericsson's, motoralla and the iphone. all these brands are mass marketed. but within those brands are several price augmentations where one can buy a nokia for P5T to P30T or even P40T. that is also true for the other brands except for the iPhone which in the philippine market is intentionally placed at a premium price only.

there is a brand called Iridium which competes in the niche market. iridium is a satellite phone that will allow subscribers to use the handset anywhere in the world, even on mountain tops, jungles and the open seas. iridium launched 66 satellites into space that float around the globe to enable subscribers to use their satellite phones in any location in the world.

the iridium is a specialized mobile phone meant for a very specific target consumer with very special needs. these customers are those who need to communicate via phone even when they are in the open sea anywhere in the world where there are no cell sites around.

it will not make sense for iridium to advertise in mass media (the term does not refer to media used by low income groups. similar to the term mass market, mass media means media that is seen by most of the audience.) as it will just be a total waste of advertising funds. if iridium advertises in mass media, its message will be meaningless to at least 99.99% of the target audience who sees the ads in mass media. 99.99% of those who watch mass media will have not need for a satellite phone.

it will also not make sense for iridium to set up outlets in malls or distribute pre-paid cards in sari-sari stores. (malls and sari-sari stores are distribution outlets for mass market products.) it will be more efficient and productive for iridium to reach its small target market almost on a one-on-one basis.

iridium is not a mass consumer product, it is a niche product competing in a niche market. only mass consumer products that compete in mass markets use mass media and are distributed in mass distribution outlets.

sometimes brand managers use the term niche marketing carelessly without really understanding what it means.