Strategic Positioning of Goods in a Market with a Niche

Eleftherios Zacharias

Working Paper series from Rimini Centre for Economic Analysis

Abstract: We use the Hotelling's model allowing for a "gap" in the consumers' preferences. As a result, the characteristics space is divided in two separate intervals. The largest one represents the main market, and the smallest represents a niche. We find that in this set up the principle of maximum differentiation may not hold. We also, examine the incentives of a firm to adopt a niche marketing strategy. That is, to relocate and price its product so that to maximize its profits from the niche market only. We show that, as the reservation value of the consumers for the product increases, it is more profitable for a firm to adopt a niche marketing strategy.

Keywords: Hotelling model; niche marketing; market segmentation (search for similar items in EconPapers)
JEL-codes: L13 M21 M31 (search for similar items in EconPapers)
Date: 2013-07
New Economics Papers: this item is included in nep-com, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.rcea.org/RePEc/pdf/wp36_13.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rim:rimwps:36_13

Access Statistics for this paper

More papers in Working Paper series from Rimini Centre for Economic Analysis Contact information at EDIRC.
Bibliographic data for series maintained by Marco Savioli ().