Niche Market vs Mass Market: Which One Is Better Option?

When you first start your online business one big question comes to your mind is whether i should go with mass market or niche market.

Both have their own benefits and drawbacks.

It may be difficult for you to decide and make the right choice for your business.

But do not worry. In this post I am going to compare both markets so that you can decide which path you want to choose.

What Is The Mass Market?

Mass Market is a market where you can target large numbers of people without any special taste and preferences.

You cover the large part of the market with a variety of products.

You are not targeting a significant type of customers here, you are considering all types of customers in the market.

For example you are selling grocery, electronics, baby products, women products, mens products etc. all at the single place.

The potential of earning money in the mass market is “high” only if you can outrank your competition which are already established as big brands.

You can see the example of amazon where they sell almost all categories of products.

What Is a Niche Market?

Niche market on the other side is about targeting specific types of customers and selling those products to them.

For example you can create a blog around vegan niche where you are targeting vegans who are looking for a Vegan diet plan.

When you are in a niche market your competition is pretty low as compared to the mass market.

And it is easy to establish yourself as a brand if you are just starting out.

You just have to differentiate yourself from others.

Mass Market Examples

Costco

Costco is a great example of the mass market. They offer a lot of products for example electronics, furniture, appliances, baby products, gourmet foods etc.

It’s a multimillion dollar membership warehouse club.

Only in the first 6 years the company has reached $3 billion in sales which is an insanely high amount of money.

Kohl’s

Kohl’s is another mass market company example.

You can see they sell huge ranges of products in various categories like mens, kids, toys, electronics, furniture, sports fan, health care etc.

They have more than 1100 stores in 49 states.

Coca Cola

Coca cola company is the biggest example of mass market.

They are selling coca cola for decades from now.

People have craving for soda drinks and coca cola is the first invention that helps people to fulfill their craving for soda drinks.

They have a variety of drinks available like Pepsi, Coca Cola, Sugar Free coca cola, Limca etc.

The mass majority of people consume coca cola on a daily basis and the demand for it is on rise.

Mass Market Advantages

Huge Scope of Earning

There is a huge scope of earnings in the mass market because there are no limitations on end customers that you can target. More potential customers means more earnings.

Low Production Cost

In the mass market the products are produced in high volumes therefore the owner enjoys the lower cost of production. Because when we buy in bulk we get a discount on the actual cost of the product.

Low Product Cost

Mostly in the mass market the product cost is low as compared to the niche market. Therefore customers are more attracted towards it and tend to purchase more.

Barrier To Entry

Due to high investment cost in the beginning of the project. There are low chances of people to enter this industry. So, you can enjoy the benefit of getting more sales.

Brand Awareness

When you sell your product in the mass market. You can develop your business as a big brand like amazon, walmart, target etc. All of these companies have gained a lot of popularity and people love to buy from these brands.

Disadvantages of Mass Market

Low Quality

In the mass market, the main focus is on quantity rather than quality. So you can expect a low quality or moderate quality product in the mass market. The products are not produced according to the customer’s specific taste and needs.

Low Profit Margin

The product prices are low in order to acquire more customers. This is the reason they get a low profit margin per product.

High Competition

There is already a lot of competition in the mass market. Everyone is providing the same thing at different places. Also the company provides ordinary products, low quality and low switching costs makes competition more difficult.

Only Profitable In One Geographical Area

The mass market can be successful in one geographical area because if customers of one geographical area love your products that doesn’t mean that customers of another state will love it.

So in order to be successful you need to alter your marketing strategy.

Niche Market Examples

Beyond Meat

Beyond meat is a great example of a niche market.

They stand out from others by providing plant based burgers to their customers with beef like taste.

They use peas as a primary source of protein.

It’s a great alternative for vegans who can also experience beef taste without breaking the rules.

Glorious Pc Gaming Race

Glorious pc gaming race is a brand that targets passionate gamers looking for gaming gear.

They have everything for gamers like mousepad, keyboard, headphones etc all at a reasonable price.

They have also built a community for like minded people where they can share their thoughts and keep updated with latest product releases.

It’s a great technique to stay connected with the customers.

Chalait

Chalait is a matcha tea seller. In the tea market these guys have differentiated themselves from others by providing the highest quality of matcha tea directly from the farms of uji in japan. It’s a healthy alternative to regular tea. This tea has a lot of benefits for health like weight loss, natural antioxidants, protects the liver, boosts brain function, helps prevent cancer etc.

Even matcha tea is a $300 million worth industry and expected to grow at 8% rate each year.

Niche Market Advantages

Low competition

There is low competition in the niche market because there are less businesses that are offering the same service as you are offering. As a result you can gain lots of potential customer base.

But before that you need to do your marketing research and find out the demand of the product that you are going to offer.

There is no point in building something that nobody’s going to buy or be interested in.

Find out something that people are looking for.

Loyal Customers

When you are the only one who is fulfilling the specific needs of the targeted customers then eventually they will come back to you again and again. Your potential customers’ volume may be low at the beginning but it will increase after time.

High Earning

People do not have any other option than you. So they don’t mind paying you more for the service you are providing. It will lead to huge earnings potential for your business.

Build Authority

You can build a lot of authority in your niche. Because you are the perfect person to meet the customers specific needs. For example Starbucks has gained a lot of authority in their niche. You can not compare their coffee with any other local restaurant’s coffee.

So you have to make something that no other business is offering. The quality must be really solid. Then only people will see you as an expert in your field.

Disadvantages of Niche Market

Low Number Of Customers

The number of customers in niche markets is limited. So you have to choose wisely before diving into any niche. You should examine the demand of customers and know whether it is profitable in the long run or not. For this do some keyword research on tools like semrush, ahrefs, google trends, google keyword planner etc.

High Production Cost

In the beginning you are working with a low volume of products which will lead to high production cost till the time you have gained lots of customers. Therefore it can be a bit difficult in the beginning.

High Risk

When you introduce someone new into the market there is a huge amount of risk associated with it whether people are going to use your products or not. There is no guarantee of success but if you have done everything right then there are high chances of success.

FAQ

Is Apple a niche market or mass market?

Yes, Apple is a niche market. Apple has a huge followers base that people eagerly wait for the next launch of the product. However they only share 18% percent of the market in the mobile industry but still the profit margin of the products is really high.

Is it better to have a niche market?

Niche market is better for the one who focuses more on quality rather than quantity. In a niche market you target a small group of people with specific needs. But even with a small group of people you can earn huge amounts of profit from it because of the loyal customer base.

What are mass market examples?

The best example of mass market is amazon, target, walmart etc. They are providing various categories and targeting huge variations of customers.

What is another word for mass market?

The other word of mass market is wholesale, retailing, market, industrial etc.

Final Thoughts

In the beginning you should definitely go with the niche market because there is less competition in this market as compared to the mass market. You can easily create a brand without much competition when you choose a niche market. It’s necessary to do the market research before diving in any niche. So do your homework first. Lastly, when you have established enough authority in your niche then you can expand it further like coca cola company.

Want more? No problem!

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