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In many developed countries agriculture is undergoing significant changes. Traditional commodity markets are increasingly being supplemented or even displaced by niche markets served by firms producing specialty products. The purpose of this paper is to determine why firms seek out niche markets and what contributes to their success. This paper investigates the characteristics that make niche markets attractive to small and medium-sized agricultural firms and the ways in which these firms become highly adapted for their chosen niche. Results indicate that forming alliances and the development of horizontal and vertical networks are among the most common and most important strategies employed by successful niche marketers. The study found that firms market niche products as part of a portfolio of products that often includes an anchoring commodity. Results also suggest that aggressive growth and pricing strategies may negatively impact a firm's ability to sustain barriers to entry. The development of a niche positioning strategy is often the outcome of a reaction to an existing situation rather than of a priori strategic planning.
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