Niche marketing strategies pdf

In the public transport business the most common types of amenities are comfort-oriented such as better seating and air conditioning. Public transport uses a relatively simple pricing strategy to attract passengers. Given the importance of pricing it is discussed in more detail below.

A good example is night trains, these take longer than flying, but they enable passengers to sleep while they travel. As with premiums, the range of different activities that could be catered to is extensive.

Weidmann 5 to extensively consider what activities should be offered. Given the importance of alternative activities from the producer perspective this strategy is discussed in more detail in the following section.

As is clear from these definitions, there is much overlap between the different niche types and most markets actually consist of combinations of these definitions. For example, using premium services in combination with offering alternative activities or lower prices. Finally, in addition to using niche marketing strategies to increase market share in a fixed demand market, transport providers can use niche marketing strategies to attract demand from another market segment i.

This can be done by introducing new technologies or substantially changing operating strategies. A good example is the introduction of inexpensive fares by low cost airlines. Southwest Airlines, one of the first LCAs, specifically targeted the niche containing people who would otherwise drive or not make a trip in its business plan.

This section describes two of the niche marketing strategies, pricing strategies and alternative activity strategies, in more detail since they are less straightforward to understand than pricing and premiums.

Pricing Strategies Pricing strategies are techniques used by transport operators to exploit the pricing market niche i. The pricing strategies used by many public transport operators are comparatively simple: offer service at a low price. However, in order to effectively use pricing strategies a business must know how much it costs to produce its service, which is not always a straightforward calculation.

The most basic pricing strategy is to offer lower prices based on lower production costs. These types of production efficiency niches are markets for which a given service provider has advantages that enable it to provide transport service at a lower cost than competitors. In order to effectively exploit production advantages, companies must have a very clear understanding of their production costs and their competition. Some producers have natural advantages that enable them to produce more efficiently, but there are many management and operating strategies that can be used to improve efficiency.

One technique for reducing production costs is improving efficiency through the clever application of new or unique technologies, for example cable cars and funicular railways these examples are described below which were significantly less expensive and complicated than competing technologies.

More sophisticated transport pricing strategies offer different prices to different customers. These qualities mean that transport suppliers must develop precisely targeted pricing strategies to ensure that the vehicle is full and that each passenger pays the highest possible price for service. A good example are airline industry pricing strategies; these combine restrictions with price — more restrictions for a lower price — in an attempt to segregate the different customer types business versus leisure travel.

Weidmann 6 of providing targeted assistance to those who must use public transport e. Furthermore, as outlined below, public transport operators are already using the strategy where it is possible to easily distinguish between groups willing to pay more i. The particular techniques that producers can use to successfully attract passengers using pricing strategies are to identify markets where you can produce service more efficiently than your competitors and to consider using sophisticated pricing techniques to attract passengers and maximize revenues.

Alternative Activity Strategies Alternative activity strategies are techniques used by transport operators to attract customers by enabling them to complete other activities while traveling. The most common example for public transport is probably reading a newspaper, magazine or book. The concept of travel time budget is helpful for understanding the alternative activity niche. Research has shown that the amount of time people spend traveling has changed remarkably little over history.

To successfully use the alternative activity marketing niche, transport providers must ensure that the alternative activity is attractive to a large number of customers and that it has enough of a time budget to compensate for the increased travel time it is not worthwhile to provide activities for which customers have very low time budgets or that they do not participate in — i.

Secondly, the transport service must realistically offer the possibility for completing the activity e. Finally, as the examples of niche transit described in the following section make clear, one of the most important alternative activities is having fun.

That is an interesting finding because how often do most people think of public transport as fun? As mentioned above, in almost all the examples from public transport, the pricing niche market strategy is used to attract customers.

They are a very interesting case study since they have moved from one market niche to another over time and because considering them in light of niche marketing raises several policy questions. Although not the first to deploy cable technology for public transport [10], Andrew Hallidie is credited with invention of the cable car in Cable cars were an efficient and effective form of public transport in hilly cities.

In some respects they were also better than the standard public transport at the time horse trams , so they were adopted in many flat cities as well. Since the electric tram was much more efficient than cable cars, most cities replaced their cable cars after development of the electric tram in the s, but San Francisco kept its cable cars although significantly reduced the size of the network. During this early period the cable cars could be classified as a travel time niche that was also more efficient for providers to operate than the alternatives.

There is continuing discussion about short cable car extensions to provide better access to various tourist-oriented destinations. The cable cars serve two markets: local public transport customers and tourists.

Serving two markets creates conflicts; for example, local users complain that single fares are too high and that the cable cars are almost impossible to use since they are often full of tourists.

Often there are several cable cars standing at the terminal while the line of passengers numbers in the hundreds; a real tourist-oriented system would offer more trips. As cable cars have become more oriented towards tourists their market niche has shifted from travel time niche to an alternative activity niche at least for tourists the alternative activity is having fun and experiencing history. For local passengers they remain a travel time niche, since they are better than their main alternative walking.

They also use differential pricing for locals who can use their monthly pass to ride the system for free. In summary, the cable cars, while clearly a niche market for public transport, exhibit one of the problems of niche transport, it is hard to serve two niches at the same time.

The largest example is in San Francisco where historic streetcars are in regular service from Castro Street to Fishermans Wharf. In many cities these lines are strictly intended as tourist services e.

San Francisco, New Orleans [16] they often have the same conflicts as cable cars. Funicular railways are common in cities with many hills e. Zurich, Lisbon.. Note: funiculars are permanently attached to the moving cable while cable cars are able to grip and release the cable; this makes cable cars more flexible than funiculars. They also are fun to ride. Cable railways are most often used in highly mountainous regions.

Cable railways are a clear example of a production efficiency niche, it is hard to imagine any more efficient infrastructure-based transport that could serve these markets. This means that it is possible to buy a single train-cable railway ticket to your destination and that schedules are coordinated with railway arrivals and departures.

In New York the cable railway operates using the standard fare system, in Portland a higher fare is charged although people with transit passes ride free. They are often more efficient for serving a given market than the alternatives. Staten Island is just a bit too far to link with Manhattan via a bridge or tunnel, and therefore the New York MTA offers the minute ferry ride as a mass transit service.

In some cities ferry boats function in a less clear market niche. For example, the Golden Gate Ferry in San Francisco Bay, in this case through most of the day buses are faster non-peak periods and direct express buses during the peak periods from residential neighborhoods in Marin County to downtown San Francisco , but the ferry boats can provide faster trips when traffic is heavy. However, ferries are also a very pleasant way to travel and provide a better opportunity for alternative activities e.

Importantly, this raises the question of why should a public transport operator subsidize this type of service? The escalators are free. Those people have allergies or food restrictions that relate to animal products and nuts. Divvies saw this underserved segment in the sweets industry and created a brand that exclusively targeted this group. Selling cookies and cupcakes is not a unique idea, but selling them as vegan and nut-free options differentiated Divvies in an already saturated market, allowing them to stand out and build a loyal customer base.

Identifying an underserved community in a large market is a smart way to approach niche marketing. The commercial clothing industry is a vertical that can feel like everything has been done. By making even just a small change, you can build a whole new sector in a traditional space. After seeing a few examples, you will be better equipped for identifying micromarketing opportunities in your own industry. To find and flush out an idea for a niche market in your vertical, go through the following 4-step process.

So reflect on the special and exceptional qualities of your brand, team, and offerings. Also consider the areas that you enjoy working in and the people you like working with. Once you have an idea about the type of niche marketing you want to do, validate that it is a reasonable idea. Do a competitive analysis to see if there are competitors in this space and if there are, what those brands are already doing.

Also look to see if any openings in your target market may have been missed and if there is legitimate demand in the vertical.

Use Ubersuggest to see what ideas might be out there. Ubersuggest is a keyword suggestion tool that provides variations of a phrase or word that people are searching for.

Most of the success stories in business emerge from a keen sense to identify a problem and provide the solution. It applies to the software industry where anti-virus software emerged to fill a need to delete viruses or Trojans that corrupt files or hamper the working of a Personal Computer. There are various ways to identify the needs of consumers- market surveys, informal talk with potential customers, and secondary data.

There are research houses that publish market surveys on niche market strategy areas, and it could be a good starting point to identify your target audience.

Sometimes the best method would be to talk directly to customers. Initially, there were only photocopiers, then multi-function electronic devices that have the fax, copier, printer, and scanner rolled into one as businesses started looking for a single device that can do all office functions.

In India, the popular toothpaste of today was initially in powder format, but the identification of the need to have a convenient paste format in sealed tubes opened a new market which has now surpassed tooth powders and other forms of teeth cleaning solutions.

Mass marketers and they can be the focus area for niche marketing. For example, if no vendor or grocer is delivering fruits and vegetables or cooked food in a particular region, there is a good opportunity to provide such services if there is a genuine need felt by the people living there.

If it is composed of elderly people living in high rise residential flats, the requirement for home delivery of daily use food and groceries may be higher. Similarly, most health and fitness centers cater to the young; if a particular locality has more elderly people looking for exercise and fitness, a wellness center focused on the elderly would gain business. Many real estate players may ignore first-time buyers looking for affordable but cozy housing. Once the entrepreneur identifies the target audience, the attributes, and the need it fulfills for the customer, they still need to synthesize the qualities of the new product or business, according to Falkenstein.

It should conform to the long-term vision set by the entrepreneur, there is a genuine need for the product, the strategy has been carefully chalked out, the product or service is unique in the market, there is the possibility of developing new products around it even while retaining the core niche market strategy already identified to begin a business.

Once the blueprint for the product is ready, and the target audience is identified, the next step is to evaluate the synthesizing criteria listed above. Does it conform to the qualities listed, and if it fails in a few of them, it is better to scrap the product and try something new? The evaluation should enable the businesses to make the right decisions and not be driven by pure hearsay, intuition and popular perception about a market that may not be true. Many large companies introduce a new product in select markets, gauge audience response and feedback from sellers before going ahead with the full production of the product or launch of a service.

In test marketing, a select group of customers is getting an opportunity to buy and use the product. In many cases, big companies resort to giving samples free of cost or take part in trade fairs to gauge market response. Or they could hold mini-seminars to introduce a product and generate feedback from the selected users of the product.

Once the feedback is received, it has to be evaluated and necessary changes made. The final stage in the niche market strategy entry process is the actual introduction of the product in the market. If it is a beauty product sold through pharma retail outlets, sufficient quantities have to be produced, orders collected from retailers, or work closely with distributors to introduce the product in the market.

According to Falkenstein, this is the most crucial phase of niche marketing. He says if sufficient homework has been done, the launching of the product is only calculated risk. Niche marketing has several advantages over mass marketing and especially for new businesses who are not awash in cash. The niche market player is more like a big fish in a small pond, while a corporate entity in a large market is more likely to be a small fish in a big pond If there are a large number of competitors.

Since the product focused on niche market strategy are tailored to the needs of the small group it is addressing, the product could make an impact on the market as there is a strong reason for people to buy.