Matrix BKG . Help in choosing a segment or niche of the market.

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2018-09-29 16:00:38

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A niche Market is a highly specialized form of business designed for a small range of consumers. It is a small but constant market capacity and a significant reduction in  competition. Niche market could be the result of target marketing - the direction to a sustainable, but small enough part of the market that big business can't or don't want to draw attention, and where the press of competition is relatively low. BCG matrix (Boston Consulting Group) puts forward a hypothesis that the owner of the largest niches has the highest profitability compared to other market participants, and therefore maximum income.

  • The Emergence of new market niches may be formed because of particular market situation - a certain set of circumstances and conditions that are known to cause specific demands and unique needs of consumers that cannot be satisfied through the existing on the market of goods or services.  As the prosperity of the four major groups of the market, according to the BCG matrix, is not always the case, the appearance of new niches may be due to emerging consumer vacuum.
  • A New niche market may be a consequence of vertical marketing that specifically focuses on the search for new business, for example, find ways to implement unique  product with the same product simultaneously on multiple market segments.
  • A New niche may be a consequence of horizontal marketing, is designed to search for horizontal market niche. Such income, typically the regular expansion of services and products, while focusing them on a single target segment.
  • Spray or beam marketing can help identify new niche market by forming a stable circle of consumers, brought a full package of services or goods. the  

Today, the choice of market segment or niche can only be influenced by the personal qualities of the entrepreneur, ability, knowledge, and skills. A successful enterprise, occupying a niche market, largely due to his leadership not for the fact that it sought to create a brand new product, but for the fact that it tried to promote ordinary products in a completely different way. Today deep specialization is required not only for development of new production technologies, but also to work with their consumer. That is why many highly developed countries use to determine the niche market the latest developments in the field of realization of goods and services. The process of defining your own niche market, unfortunately, is often reminiscent of a finding a vacuum that must soon be filled. the In fact a niche market – it is a harmonious tandem between completely lucid and urgent needs  with non-traditional methods, forms and ways to meet them. The Main objective of marketing is to determine how to solve existing consumer problems, because today niches arise in any economic sector, even for a long time divided markets.

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Highest quality products and services Is considered one of the most important conditions of a successful introduction and rationale in a niche market. It should be noted that any company is sure on one hundred percent that its goods and services represent the highest quality. However, in order to focus on a niche market you need to be able to sensitively respond to even the slightest change in supply and demand, anticipate future changes in the structure of the business and apply their unique knowledge to solve a variety of issues. For example, segmentation of the market of educational services is today considered the most promising due to the low level of free education.

Matrix of BKG to date highlights the theory that a small increase of the market does not require additional funding. Such a hypothesis takes place, but in some cases it doesn't work. It is not always possible to count on a successful venture in a niche market. Many well-known entrepreneurs believe that it is better to buy the business from competitors, rather than start it from scratch. Focus on the niche market depends on production efficiency, this reduces transportation costs and unwarranted advertising. However, finding a niche market is not limited only to the analysis of the market, the organization of the enterprise and experienced professionals, able to build a focused production, this is also a necessary condition. Generally, for large enterprises it is an insurmountable task: all the attempts to extract from its environment small firms come into conflict with organizational practices of big business. In the end, the small flexible companies that are merging with large companies, start to lose their true colors and lose competitiveness.

Matrix of BKG - a great helper in search of a niche or segment of the market, especially in decision-making about the intended market position. Its simplicity and accessibility allows you to make the right choices on the way to the prosperity of their business.

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