explain why the price elasticity of niche-market products may be lower than for products in the mass markets.?
Published by admin on February 8, 2010
Niche markets tend to be walled in by their suppliers _and_ consumers, be it someone else or themselves (like a woodworking artist selling his own work, for example). The idea is to grab more consumers, so having prices change quickly is considerably more scary for niche. Also, mass markets carry large weight in demand control, not to mention advertising power as a part of that. The only way you can flip the coin here is to have something extremely valuable or rare in the market. Since the market is already niche, that’s hard to do.
Then there’s the simple "repeat customer" thing. The clientele doesn’t change much. Same bar, same restaurant, same people, same furniture, same fancy thing on the wall.
Mass markets are sort of top-heavy, on the other hand, like an inverted pendulum.
That is just a guess.
Niche markets tend to be walled in by their suppliers _and_ consumers, be it someone else or themselves (like a woodworking artist selling his own work, for example). The idea is to grab more consumers, so having prices change quickly is considerably more scary for niche. Also, mass markets carry large weight in demand control, not to mention advertising power as a part of that. The only way you can flip the coin here is to have something extremely valuable or rare in the market. Since the market is already niche, that’s hard to do.
Then there’s the simple "repeat customer" thing. The clientele doesn’t change much. Same bar, same restaurant, same people, same furniture, same fancy thing on the wall.
Mass markets are sort of top-heavy, on the other hand, like an inverted pendulum.
That is just a guess.
References :
Failed macro-econ because of a difference of opinion with prof.
Conversations with small business owners.
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