Business Studies – 3.1.3 Mass markets and niche markets | e-Consult

A niche market, defined as a smaller, more specific segment of the population with particular needs and wants, is generally a more appropriate target market for a company selling luxury watches than a mass market. A mass market approach would be highly inefficient. Luxury watches are expensive and cater to a specific demographic – individuals with high disposable income and an appreciation for craftsmanship and status.

A niche market allows the company to tailor its marketing and product development to this specific group. Marketing can be highly targeted, focusing on channels frequented by affluent individuals (e.g., luxury magazines, exclusive events). Product features can be customised to meet the specific desires of this market segment (e.g., limited edition releases, bespoke options). Customer loyalty is more likely to be achieved as the product directly addresses their needs and aspirations.

A mass market approach would involve significant expenditure on advertising to a broad audience, many of whom would not be interested in or able to afford the product. The company would also struggle to effectively communicate the value proposition of a luxury watch to a diverse audience. Therefore, a niche market strategy is far more likely to be successful for a luxury watch company.