urban outfitters continuing case study :creating a business

Some good examples of niche products are

Vertu Mobile phones that cater to the ultra rich people and celebrities who would like their phones to be gold plated and handcrafted for perfection

Rolls Royce Automobiles

Harley Davidson motorbikes

3 . Explain why a niche company might have an advantage in a market Would price necessarily be an advantage ? Explain why or why not

A niche company has some advantages in a market that differentiate it easily from the majority of players . A niche company can offer personalized , custom made and to

fit the needs of the customer , which a larger company would not be able to serve . Since , the niche company serves the customer with the product that he exclusively seeks these customers are less fussy about the price of the product

Niche products are generally price inelastic i .e . a significant decrease in the price of the product might not increase the demand in the same or lesser proportion . By reducing the price of the product by going for mass production would be of no help to a niche company . It would need to focus on fulfilling the special needs of its customers Some niche customers are very brand conscious too , and the company would need to build its business by up keeping its brand value , with which the consumer wishes to be associated with

4 . Identify and explain three reasons why customers would pay more for exclusivity

Scarcity : Not all niche products are available in abundance . Hence there is an artificial scarcity created by the seller keeping the product 's price inelasticity . Hence the customer is willing to pay a higher price as he believes the product to be exclusive and scarce

Personal satisfaction : While some customers wish to fulfill status needs through the purchase of niche products , others...