Analyse one advantage to a business of operating in a niche market.

Mark scheme

Marking points from the official mark scheme. The mark or mark type is shown in brackets.

1. Award 1 mark for identification of an advantage (e.g. less competition, can charge premium prices, stronger customer loyalty, specialised expertise, easier market entry/lower marketing costs). (B1)
2. Award 1 mark for linked explanation of the advantage. (B1)
3. Award 1 mark for analysis of the advantage. (B1)
4. e.g. A business in a niche market may face less competition (B1) because the market is specialised and smaller, deterring larger businesses (B1). This means the business can potentially gain a dominant position and have more control over pricing, leading to higher profit margins and stronger financial performance (B1).