Urban Outfitters Continuing: Creating a Business, Case Study Example

1.Identify at least three challenges when setting up a business. Explain why they are challenges. There are a number of important challenges involved in establishing a new business. Most importantly, there must a strong idea or concept in place that will be attractive in the chosen marketplace, and that will provide some degree of value to the customer (Case Study). Another challenge is securing the capital and other resources that are required to start the business from the ground up. Finally, identifying a marketing concept that will be attractive to consumers is essential, yet is often very difficult to develop successfully the first time around.

2.Define what a “niche” product is. Give at least three examples of niche products. A niche product serves as an attractive commodity to a smaller group of buyers that does not necessarily fall into the mainstream product market (Case Study). Popular examples of niche products in popular culture include tie-dye t-shirts, antique furniture, and record albums, all of which are considered to be vintage products, but yet remain popular with a smaller segment of the market. However, it should be noted that niche products are not always old-fashioned or outdated by societal standards, as there are many new products that are specifically designed to fill niche market needs.

3.Explain why a niche company might have an advantage in a market. Would price necessarily be an advantage? Explain why or why not. A niche company is a unique opportunity to explore a product or a set of products that do not necessarily fall into the mainstream of popular culture. Since there are plenty of customers that also do not fall into this category, a niche company might serve a competitive advantage in this market segment. It is important for niche companies to seek out those special groups of customers that might be interested in their products, and to focus their marketing strategies around these groups. These efforts are particularly relevant because they offer these non-traditional customers a set of products that will be very attractive to their needs for a variety of reasons. In this context, a niche company will satisfy a series of needs and expectations from a non-traditional group of customers. In this group, since the products are often unique and may be hard to find, price is not necessarily an advantage, because some customers seeking a specific type of niche product might not be concerned with price, as long as the quality is good. These efforts demonstrate that niche companies do not always have to market their products based upon prices, but can use other strategies effectively, such as the exclusivity of their products, to generate successful sales.

4.Identify and explain three reasons why customers would pay more for exclusivity.

There are many customers in today’s society that possess non-traditional and non-conformist attitudes and beliefs regarding life and the products that they use. Therefore, it is important to convey the idea that this group is sufficiently large enough to attract a vast and widespread customer base that is searching for unique and exclusive products, rather than depending upon the latest trends in merchandise that are available in mass market stores, such as Wal-Mart or Target. Therefore, these customer groups are willing to drive the extra mile and pay the extra cost in order to obtain products that will be unique and exclusive, not only in physical appearance, but that may also bring a higher quality than those that are mass produced. In addition, it is important to consider that customers that are seeking unique products may be more concerned with natural resources and such, and that some of these products may be organically produced or with the best intentions of the environment in mind. Finally, some products simply possess a unique look or texture that is attractive to buyers, and therefore, they are willing to pay extra for these features.

5.Explain how a niche player “chips away” at a larger competitor’s base. Give three examples of retailers who have done this. A niche player is truly successful when there is evidence to suggest that the retailer has attracted a sufficient customer base to increase their competitive advantage. This has been accomplished by a number of retailers in recent years, with one primary example being Trader Joe’s. The grocery retailer has attracted a large customer base with its healthier yet affordable food selections, along with its refusal to mass market and sell popular brand names in its many stores. Another example is Zappos.com, which offers thousands of pairs of shoes and handbags in many different sizes and styles, accompanied by free shipping and free returns, which is attractive to shoe buyers seeking convenience at competitive prices. Finally, Petsmart is a very successful niche retailer with an eye not only for pets, but also for their owners. This concept has enabled the business to capture the interest of many pet owners through its vast product lines and competitive pricing strategies.