Increasingly, there seems to be an emphasis on the mass consumer market, but can that focus be dangerous to businesses?


If the trade publications for the tech industry are to be believed, there appears to be a bias towards selling products and services to the mass consumer market. It is not enough to be happily chipping away, have a sustainable business, and even making a profit. There is a continual emphasis on “bigger and better” – that the goods and services businesses offer should have as wide an appeal as possible.

However, is such a fair, or even, right. Below, we discuss whether businesses should indeed focus on mass appeal.

Wider appeal = more customers = more profits

It could be argued that the increased thrust on the mass consumer market has been driven by the investor communities. Among investors, there can be an emphasis, especially on entrepreneurs and startups, to broaden the appeal of their products, in order to increase their customer base, and consequently, the potential for exponential profitability. Whilst investors are prepared to businesses, such as through stock markets, or as angel investors, or venture capitalists, typically, their support is given with the understanding – and expectation – of huge gains down the road, which in turn drive the decisions the business makes.

However, companies have imploded because of that approach. One of the most notable ones is BlackBerry, which was a produced a smartphone for the corporate customers. Eventually, the devices became popular with everyone, resulting in considerable growth and sales. However, in trying to appeal to the mass consumers, it could be argued that BlackBerry lost sight of its strengths. Eventually it lost traction in the market, had to restructure, and as of a few months ago, the company announced that it would no longer produce its own device, but would focus on its much-valued software..

What about niche markets?

In the same way there is a place for the mass appeal products and services, there is also a place for niche markets. Depending on the offering, focussing on niche markets can be extremely lucrative. However, there is also merit in providing solutions that cater to specific groups or categories of people, or interest.

A continuous emphasis on the mass consumer can lead to a homogeneous response from all of the players in a particular market, which in turn can limit innovation. For example, products appear to have similar, almost identical, designs and aesthetic regardless of the vendor, and the distinguishing points between them might be more about brand reputation and aftercare service.

Recognising the trade-offs

Whilst it is good and necessary to have businesses that cater to niche groups, it also bears mentioning that if the customer characteristics for such markets are drawn too narrowly, the actual customer base could be unduly small, resulting in missed opportunities and lower revenue for the business. However, it does not automatically justify a mass appeal approach.

Not every business venture can be successfully adopted for the mass market – and more importantly, sustained over a long term. Similarly, a small or niche focus does not always mean just a subsistence existence. A business could cater to a discerning clientele, or provide an essential product or service to a targeted group of individuals, and still be extremely profitable. However, it is crucial to manage expectations about what it means to be a successful business.

 

Image credit:  Best Of Morocco Tours (flickr)

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