The simplest definition of a market tells us that a market is a place where sellers come to sell their products and/or services to buyers. These markets could simply be a market stall in the city centre, or a website like Amazon with sellers finding themselves amongst competition who sell similar products and services.
Unfortunately, business is not that simple and markets are dynamic – in that they are constantly evolving and changing. Therefore, businesses must understand market trends and have the ability to adapt to remain competitive.
Delving even deeper, it’s even more complicated. All markets are different, catering to different customers. Not only do businesses need to remain on the forefront of the change, but they must understand hundreds, if not thousands of different characteristics that make up the market that they operate in. Varying characteristics include the size of the market and competition, just to name a few.
However, there are still markets which are large and undifferentiated, where products and services appeal to a mass audience of consumers who have varied backgrounds. These are known as mass markets.
Like I said, products which have a mass appeal are suited for mass markets. Products and services like electricity, petrol and bread are products which can be advertised to the majority through mediums such as newspapers, radio, TV, and the World Wide Web. In music, artists like Beyoncé and Ed Sheeran make music which has this mass appeal.
The advantage to selling and promoting in a mass market is the scope – you reach many people easily, which in turn saves time, and therefore decreases the cost of advertising compared to a segmented market.
On the flip side, the weakness of mass marketing is that you assume every consumer is the same and that every consumer thinks alike.
And we all know someone who doesn’t share the same view as we do on Kanye West…
Additionally, this weakness can lead to our marketing efforts being wasteful, advertising to people we didn’t really want to advertise to. For example, if I advertised Internal Affairs on prime time TV, it would cost me hundreds of thousands, if not millions. There wouldn’t be many musicians who see the advert; even fewer when you consider the fact that I want to attract those who want to improve their marketing efforts. Therefore, I need to target and segment my market.
And all this leads me perfectly in to niche marketing (which I touched upon in the opener).
Niche markets are narrowly defined segments of a mass market, where consumers have very specialised needs and wants. Products and services which appeal to such markets usually have a focused purpose. For example, sports cars; it’s a focused product that is only sold to those who want something fun, quick, stylish and luxurious to drive. It also means that these businesses selling focused products like sports cars can usually charge a higher price than the mass market equivalents of the product. Why?
One reason is that there’s usually a culture of “big fish, small pond”. While mass markets usually have fierce competition, niche markets tend not to. Less competition usually means less supply and more demand, which means a product can be sold at a higher price.
Furthermore, because that pond is smaller, it means that there are a small amount of possible customers (yep, it’s still an advantage) who you can build closer connected relationships with, which in turn can increase customer loyalty.
However, niche markets can be more volatile compared to mass markets. Have you ever heard of the phrase “don’t put all your eggs in one basket”?
Niche markets tend to focus on one very small market, therefore it’s important for a company to grow and add more products to their portfolio which cater to more niche markets. If they don’t and the market they depend on suddenly changes to a point where they can’t adapt, they will be screwed!
What This Means For You
In any industry, there’s usually one dominant market (in our case, the mainstream) and then several smaller differentiated niche markets. It’s very important for you to understand that you will always start out making music for a niche market, as you won’t appeal to the masses straight away.
However, niche markets have the potential to grow. Take Hip Hop for example, in the 70’s, it started out as a few people in the Bronx having fun on the weekend, before it grew in to what it is now – a mainstream music genre. It’s important to note that it’s a genre that now has a plethora of sub-genre niches too.
Anyway, you can see why choosing your market (whether mass or niche) is so important. Next post I’ll talk about the nitty-gritty stuff of market segmentation, as it’s extremely important to understand the market you are in and who you are selling to.
In the meantime, why don’t you let me know what market you are in or planning on entering (i.e. a genre or sub-genre, or perhaps a new location) in the comment section below?
Also, if you’re new around here, why not sign up to the Internal Affairs newsletter for some FREE music marketing goodness? You can do so below.
Until next time,