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Niches

It is a highly competitive world out there and it is very difficult for new manufacturers to break into existing markets because the majority of the existing ones have already been well sold up by a longer established businesses. There is not only the problem of persuading the general public to buy a product but because of the way in which distribution systems are setup it is also necessary in many cases to convince wholesalers and retailers that the product is worth stocking. This is where the niche product comes in!

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It is natural that a manufacturer will aim product at the mass market; that is where the greatest number of sales and therefore the most profit lies. It is not easy to produce a new product line although it is not at all impossible either; products such as iPods and digital cameras now sell in their millions whereas 10 years ago they were relatively unknown in their present form. Outside the main bulk markets however there are often products which, whilst not selling in large numbers, do sell in the sufficient quantities to create a reasonable profit if properly marketed; as an example anyone setting out to sell plaster to builders merchants would have a very difficult job to do so without massive discounting, but someone who produced one which was waterproof and which would not allow rising or penetrating damp through to spoil decorations or cause timber decay would not only find a ready market but would also be able to charge a premium price for the product as well. Businesses which are well-established producing products which sell in bulk are rarely interested in handling niche products since they can be a distraction from their main business, which means that the field is usually open for smaller or new companies to exploit.

In addition many niche products are so highly specialised that they can be sold direct to the consumer, which then cuts out the necessity to set up a sales organisation to persuade wholesalers and retailers to stock them; again this is a type of marketing that the larger and more established firms may well wish to avoid.

 

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