Focused or Niche Strategy
* FOCUSED OR NICHE STRATEGY
WHAT IS FOCUSED OR NICHE STRATEGY? * Focus strategy based on low-cost * Concentrate on a narrow customer segment beating the competition on lower cost * Focus strategy based on differentiation * Offering niche customers a product customized to their needs * Overall objective of both focus strategies is to do a better job of serving a niche target market than competitors * Keys to success * Choose a niche were customers have a distinctive preference, unique needs or special requirements * Develop a unique ability to serve the needs of a niche target market
What Makes a Niche Attractive? * Large enough to be profitable * Good growth potential * Not critical to the success of major competitors * Organization has the resources to effectively serve the niche * Organization can defend itself against challengers through a superior ability to serve the niche * No competitors are focusing on the niche
EXAMPLES OF FOCUS STRATEGIES
-eBay for online auctions
-Porsche for sports cars
-Horizon and Comair (commuter airlines) to link major airports with small cities
-Jiffy Lube International, maintenance for motor vehicles
-Bandag – specialist in truck tire recapping
FIVE STAGES TO FULLY ADDRESS THE NICHE OPPORTUNITY
There are five stages to consider when attempting to address niche marketing opportunities. These stages are strategic planning, defining the mission and objectives, strategies and action, monitoring key projects and objectives, and organizational realignment.
1. Strategic Planning Strategic planning encompasses many of the issues discussed above, including the assessment of market opportunities, as well as an inventory of internal resources, values, potential strengths/capabilities (addressed in more depth below), and any weaknesses/shortfalls of the current operation. In short, the overall strategy provides a “road map” to attaining the objectives of the operation and its
WHAT IS FOCUSED OR NICHE STRATEGY? * Focus strategy based on low-cost * Concentrate on a narrow customer segment beating the competition on lower cost * Focus strategy based on differentiation * Offering niche customers a product customized to their needs * Overall objective of both focus strategies is to do a better job of serving a niche target market than competitors * Keys to success * Choose a niche were customers have a distinctive preference, unique needs or special requirements * Develop a unique ability to serve the needs of a niche target market
What Makes a Niche Attractive? * Large enough to be profitable * Good growth potential * Not critical to the success of major competitors * Organization has the resources to effectively serve the niche * Organization can defend itself against challengers through a superior ability to serve the niche * No competitors are focusing on the niche
EXAMPLES OF FOCUS STRATEGIES
-eBay for online auctions
-Porsche for sports cars
-Horizon and Comair (commuter airlines) to link major airports with small cities
-Jiffy Lube International, maintenance for motor vehicles
-Bandag – specialist in truck tire recapping
FIVE STAGES TO FULLY ADDRESS THE NICHE OPPORTUNITY
There are five stages to consider when attempting to address niche marketing opportunities. These stages are strategic planning, defining the mission and objectives, strategies and action, monitoring key projects and objectives, and organizational realignment.
1. Strategic Planning Strategic planning encompasses many of the issues discussed above, including the assessment of market opportunities, as well as an inventory of internal resources, values, potential strengths/capabilities (addressed in more depth below), and any weaknesses/shortfalls of the current operation. In short, the overall strategy provides a “road map” to attaining the objectives of the operation and its