Practise IB Business Management SL/HL 4.2.3 by applying niche and mass markets concepts to exam-style questions.
Musical Musings (MM)
Musical Musings (MM) manufactures musical keyboards, using batch production to produce a limited range.
MM's products are designed for use in schools and homes. M M sells directly to schools, and, for the home market, sells through shops specializing in technology. MM's costs are kept low by:
- limiting its product range
- focusing on a small target market, which enables M M to limit the features on its keyboards and keep the appearance functional.
M M provides free online "Teach yourself to play the keyboard" training courses for all customers.
In 2021, MM employed an average of 50 people. During that year, however, 12 people left the company. Their reasons for leaving are shown in Table 5.
Table 5: Stated reasons for employees leaving \(\boldsymbol{M
MM's labour turnover rate for 2021 was 24 %. The manufacturing industry average was 15 %.
In 2021, MM's sales declined. MM is now considering targeting the niche market of professional musicians. MM would change its product design by adding a range of different sound features and improving the appearance of its keyboards. To achieve this change, MM would eventually stop supplying its existing market. Professional musicians would pay a higher negotiated price for improved keyboards made to their individual specifications. Changing its production process to job/customized production would be expensive for M M, however, and it would have to invest in a new marketing strategy.
State two characteristics of a niche market.