Definition:
A niche market is a focused, target able portion of a market.
By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. You can think of a niche market as a narrowly defined group of potential customers.
For instance, instead of offering cleaning services, a business might establish a niche market by specializing in blind cleaning services.
You bother to establish a niche market? Because of the great advantage of being alone there; other small businesses may not be aware of your particular niche market, and large businesses won't want to bother with it.
The trick to capitalizing on a niche market is to find or develop a market niche that has customers who are accessible, that is growing fast enough, and that is not owned by one established vendor already.
One common path to success for many small businesses is establishing themselves in a niche market. Because no matter how hard they try, no large retailer can be all things to all people, there are always going to be segments of the population whose needs for particular products and/or services are going unmet – leaving room for the small business to succeed by meeting those needs.
Four basic concepts for niche marketing success:
1. A unique product or service.
For starters, if you’re going to master a niche market, you need to have a unique product or service. Ideally, you want to be the only one selling what you’re selling.
The trick to coming up with such a product or service is to “look on the fringes” for unmet needs. For example, one East Coast entrepreneur’s business consists of creating hand-made medieval outfits. Large retailers and even shops specializing in costumes don’t supply these types of garments.
Don’t forget that processes can be products as well. They’re ubiquitous now, but someone once looked at an inkjet printer cartridge and came up with the idea and the process for refilling them. Need help getting started with this sort of idea spotting?
2. A marketable product or service.
You can create all kinds of wonderful and wonky products and/or services but if no one wants what you’ve produced, what’s the point? Maybe there’s no one selling fried insects from a vending cart on your street, but that doesn’t mean it’s a good idea. The niche market of people who enjoy eating fried insects in this country is so small they wouldn’t even fill a phone booth.
There has to be enough of a demand for your product or service for your business to make a profit. How do you find out? By trial and error or by conducting extensive market research.
3. Choose a niche market that’s available.
Remember, niche markets tend to be smaller so there’s only room for so many players. When it comes to niche marketing, if you try to jump on a bandwagon, you’re only going to fall off the back.
Before you started such a business yourself, you would certainly need to carefully research the competition and the size of the market to see if a new business in this niche would be viable. It might well be better to find a different niche in the marriage or gay markets and make that niche your own.
4. Market, market and market.
Marketing is perhaps more important for niche market businesses than for any other kind, because the niche market business is by definition, unknown and succeeds or fails on making the connection with exactly the right kind of customer/client. If you open a Starbucks, for example, people know right away what that business is about and what kinds of products to expect. And because Starbuck’s market is “anybody who likes coffee”, they really don’t have to worry much about advertising at this point in the game.
But if you open a business providing naturopathic treatments for pets, selling tub/shower conversions for the elderly or providing virtual assistant services to professional speakers,
A unique product or service that will fulfill the unmet needs of a specific group of people – that’s niche marketing in a nutshell. If you apply all of the four concepts above, your small business will enjoy the powerful competitive advantage that mastering a niche market provides.