1. Excel Shoes is a manufacturer of footwear. It produces a range of shoes for children and adults. This market is very competitive.

The owner directors of Excel are considering entering the market for safety footwear. This is a niche market. They have provided the marketing manager with a marketing budget of $30000, of which 40% is to be used on promotion for the new safety footwear.

a. Define 'niche market'.

b. Calculate the budget for promotional activities.

c. Identify four methods of promotion that Excel could use to promote its new safety footwear.

d. Explain two benefits to Excel of carrying out market research into the safety footwear market.

e. Do you think that Excel Shoes should enter the safety footwear market? Justify your answer.

a. A 'niche market' refers to a small, specialized segment of a larger market that is defined by its unique needs and preferences. Unlike a general market that targets a broad audience, a niche market focuses on a specific group of consumers with particular requirements.

b. To calculate the budget for promotional activities, we need to allocate 40% of the total marketing budget of $30,000 for promotion.

[tex]0.40 \times 30,000 = 12,000[/tex]

Therefore, the budget for promotional activities is $12,000.

c. Four methods of promotion that Excel could use to promote its new safety footwear include:

Online Advertising: Utilizing social media platforms and search engines to reach potential customers.
Trade Shows: Participating in industry events to showcase the products directly to prospective buyers.
Public Relations: Sending press releases to relevant industry publications and creating buzz about the new product launch.
Direct Mail: Sending targeted promotional materials to potential buyers, offering information and incentives to try the products.

d. Two benefits to Excel of carrying out market research into the safety footwear market are:

Understanding Consumer Needs: Market research can provide insights into what features or benefits are most important to consumers in the safety footwear market. This helps in designing products that better meet customer expectations.
Identifying Market Trends and Competitors: It helps Excel understand current trends and the competitive landscape. This knowledge can inform strategic decisions on pricing, marketing, and distribution.

e. Whether Excel Shoes should enter the safety footwear market requires a deeper analysis. However, entering the market could be justified if:

Market Demand: There is an increasing demand for safety footwear, indicating potential for profitable growth.
Unique Capabilities: Excel has unique strengths, like advanced manufacturing processes or materials, which can give it a competitive edge.
Diversification: This move can diversify Excel's product range, reducing reliance on standard footwear and tapping into a different revenue stream.

However, Excel should also consider potential challenges such as entering a market with established competitors and the possibility of high initial investment costs. Conducting thorough market research and developing a strong promotional strategy can help mitigate these risks.