In today’s business world, niche marketing is becoming more and more popular because it’s smarter, easier and can be very profitable. In this article you’ll learn what a niche market is, how to choose one, it’s disadvantages and of course the disadvantages.
- What is a niche market?
- How to find or choose a niche market
- Advantages of niche marketing
- Disadvantages of niche marketing
What is a niche market?
A niche market can be defined as the subset or small market segment of the market on which a specific product is focused. The niche market is a highly specialized market, where small and large firms strive to survive amidst tough competition. Every product in the market has its own unique niche market, but some companies can create products for different niche markets. For illustration purpose, let’s take Samsung as a case study. The company produces smart mobile phones for individuals in smart phone niche, but also produces home appliances for families.
Practically, there are two basic markets you can sell to: consumer and business. Take for instance that you’re operating a retail store for women’s clothing, your basic market would be consumers. However, if you are selling office appliances, your target market would be businesses. There are special cases when you can be selling to both consumers and businesses.
How to find or choose a niche market
Many people talk about finding your niche market like it’s something under a rock or at the end of the rainbow – to me that’s nonsense! If the truth must be told, then you should know that there are no unknown niches; every niche has already been discovered by someone else. They sound new to you because you’re new to it.
However, if you’re still struggling with finding your niche market, here are some easy steps to guide you:
- Identify your interest and passion: As a first time business owner, if you are working on a niche that you don’t have interest about, you’ll easily quit at the face of challenges. Therefore, you should have a drive before running a business in any niche.
- Identify problems that you can solve: If you intend to create a profitable business, then you must be able to identify problems that your target clients face, and determine whether you have the resources to solve them. You can identify such problems by joining online forums, researching keywords that relate to your niche market, or engage in a conversation with your target clients.
- Research your competition: Do not be afraid of having fierce competition in your business niche because the presence of a competitor is not a bad thing. This may even indicate that such niche is profitable. By researching your competition, you will be able to stand out in the crowd.
- Determine the profitability of your niche: There are several niches that are yet to be monetized, while other niches with competitions are already profitable. You should determine whether your niche is profitable before entering such niche.
- Test your idea: Having gotten all the information that you need in finding a niche, why don’t you venture in for a test. It can be a pre-sale of the product you have developed, this would help you to know whether you are at the right track.
Advantages of niche marketing
There are a good number of advantages of niche marketing. Here are some of them:
- Less investments: less resources will be required when you are confined to a specific person and a specific need. Niche marketing is helpful in removing eliminating audience segmentation because you’ll serve just one demographic population.
- Less risks: You must have gathered huge amount of knowledge concerning the niche and industry before venturing in. This kind of knowledge means better informed decisions and lower risks.
- Higher profits: With less investment and increased visibility as advantages of niche marketing, saying that it leads to higher profit will be in place.
- Brand loyalty: With niche marketing, expect to have many return customers who are loyal to your brand.
- Goodwill: With niche marketing, you can earn good name and reputation within your industry.
- Less Competition: If you product is truly unique, there won’t be an exact same offering within the niche. This would aid you in eliminating competition.
- Increased visibility: Niche marketing improves your online presence to search engines, and would lead to higher leads.
- Honed expertise: Niche marketing would help you to choose a niche where you are an expert in.
- More fun: Most business do not go out looking for their niche; they find their niche in the process serving a wide range of audience. And this is fun as they thrive to become a big fish in a small pond.
Disadvantages of niche marketing
There are a good number of disadvantages of niche marketing. Here are some of them:
- If the niche has been invaded by large companies with fierce marketing strategies and competition, it may not be suitable anymore for new entrants or existing small companies.
- It may not be sustainable for businesses who want to grow in the current market.
- If the niche is a very small segment of the large market, it may be hard to enjoy high profit margins in such niches.
In all, if your establishment is a small or large firm that’s a new startup or struggling to survive amidst tough competition, you can borrow our tips in order to succeed in such niche or industry.