There is a new generation of competitors that has entered the market and is posing a great threat to larger companies. These companies tend to operate more on a specific niche, which makes them appear “closer to the customer”.
These companies concentrate on selling to a smaller market. This can help lower costs because specialization creates savings. These smaller firms can concentrate on establishing a strong image and position in their niche. Niche marketing also targets customers more specific needs. Customers today have more of a selection to get the “exact” product that they desire.
The Solomon text refers to a subject that can help illustrate the benefits of niche marketing. On page 457, Solomon refers to social stratification. Social stratification refers to a creation of artificial divisions in a society: “those processes in a social system by which scarce and valuable resources are distributed unequally to status positions that become more or less permanently ranked in terms of the share of valuable resources each receives.” Solomon, 457.
Companies that appear “closer to the customer” seem to give customers more of what they want, where larger companies and retailers don’t have this specialization. Higher social classes tend to want a more specific product and are willing to pay the extra money to receive it.
According to http://exinarticles.com, niche marketing reduces marketing costs because you don’t need large forms of advertising. In other words, you don’t have to pay for expensive costs such as television commercials, full page magazine ads in well known magazines etc. Services by these smaller companies can be completed quicker and more efficiently and therefore will ...