Page 332 - Marketing Management

COMPETITIVE DYNAMICS | CHAPTER 11 309

recession, the company is determined to broaden its brand meaning to en-
compass “all flame-related products.” It introduced a long, slender multi-
purpose lighter for candles, grills, and fireplaces in 2001; acquired W.R.
Case & Sons Cutlery, a knife maker, and DDM Italia, known throughout
Europe for its fine Italian leather goods; and plans to sell a line of outdoor
products in outlets such as Dicks, REI, and True Value. 35

Because niches can weaken, the firm must continually create new
ones.“Marketing Memo: Niche Specialist Roles” outlines some options.
The firm should “stick to its niching”but not necessarily to its niche.That
is why multiple niching can be preferable to single niching. With strength
in two or more niches, the company increases its chances for survival.
Firms entering a market should initially aim at a niche rather
than the whole market. The cell phone industry has experienced
phenomenal growth but is now facing fierce competition as the
number of new potential users dwindles. An Irish upstart company,
Digicel Group, has successfully tapped into one of the few remain-
ing high-growth segments: poor people without cell phones.

Digicel Group In 2001, Digicel CEO Denis
O’Brien heard that the government of Jamaica was opening its
local phone market, long monopolized by British telecom giant
Cable & Wireless. O’Brien spent nearly $50 million for a li-
cense, using money from the sale of his first telecom venture,
Esat Telecom Group PLC. O’Brien took the plunge because he knew
Jamaicans had to wait over two years for a landline, and only 4 percent of
the population had cell phones. Within 100 days, Digicel had signed on Zippo has expanded its brand
100,000 subscribers, luring them with inexpensive rates and phones and meaning to encompass “all flame-
related products” to ensure its
long-term growth prospects.

marketing
Memo Niche Specialist Roles

The key idea in successful nichemanship is specialization. Here are some • Product or product line specialist. The firm carries or produces only
possible niche roles: one product line or product.A manufacturer may produce only lenses for
microscopes.A retailer may carry only ties.
• End-user specialist. The firm specializes in one type of end-use cus-
tomer. For example, a value-added reseller (VAR) customizes computer • Product-feature specialist. The firm specializes in producing a certain
hardware and software for specific customer segments and earns a type of product or product feature. Zipcar’s car-sharing services target
price premium in the process. people who live and work in seven major U.S. cities, frequently use pub-
lic transportation, but still need a car a few times a month.
• Vertical-level specialist. The firm specializes at some vertical level
of the production-distribution value chain. A copper firm may concen- • Job-shop specialist. The firm customizes its products for individual
trate on producing raw copper, copper components, or finished copper customers.
products. • Quality-price specialist. The firm operates at the low- or high-
quality ends of the market. Sharp AQUOS specializes in the high-quality,
• Customer-size specialist. The firm concentrates on either small,
medium-sized, or large customers. Many nichers serve small customers high-price LCD television and component screen market.
neglected by the majors. • Service specialist. The firm offers one or more services not available
from other firms. A bank might take loan requests over the phone and
• Specific-customer specialist. The firm limits its selling to one or a few
customers. Many firms sell their entire output to a single company, such hand-deliver the money to the customer.
as Walmart or General Motors. • Channel specialist. The firm specializes in serving only one channel
of distribution. For example, a soft drink company makes a very large-
• Geographic specialist. The firm sells only in a certain locality, region,
or area of the world. sized serving available only at gas stations.