A Niche Market is a small part of a larger market that has its own specific needs, which differ from the larger market in some way. For example, the computer market is huge but there are specialized markets for student computers and gaming computers, which include different types of system requirements depending on the needs of the customer.
What Makes a Niche?
Finding a niche can involve a lot of research especially if no one has penetrated the market before. But sometimes finding a niche can be easy. Take, for example, a broad product like jackets. The target market for jackets is literally every human being on earth, but when you start naming types of jackets, niches start to emerge. For example, a vintage women’s trenchcoat is a niche because it costs more than average for something vintage.
The product is limited to women, and the trenchcoat is a style of jacket that only a few women will enjoy. Therefore, the niche market for vintage women’s trenchcoats is women who love trenchcoats and are willing to pay more for their jackets. This market niche is much smaller than the original market for jackets.
Niches can be even smaller. Pixie Faire provides design and support for people to make their own doll clothes, while also providing a marketplace to sell these items as well. This business is very niche as it speaks to people who are doll collectors, and those who are interested in making their own doll clothes. This specialized market can make it difficult to find your community, but they do a great job!
What’s clear from both of these examples is that the niche is so direct and small that it’s hard to make a profit. One way to combat this is to take the time to get to know your audience and invest money into reaching them on every platform possible. Selling to a niche market can be challenging but not impossible.
Why Define Niche Market?
As mentioned above, knowing your audience is crucial if you want to successfully sell in a niche market and defining it is how you do it. Research is required regardless of market size and there are other steps to follow.
- Before you choose what to sell, you should look at your competitors and find out how they communicate with their market. Maybe the market is oversaturated and demand is low, making it difficult for you to sell.
- Once you have placed your niche product in the market, reach out to people who fit into your niche and invite them to test the offering for themselves. Gather feedback that can help understand your market better and take criticism positively.
- Explore user testing and research consistently so that your customized offerings are always appropriate for their market. This also ensures that you can move into new markets or offer more to existing markets before your competitors.
Niche Market Benefits
Being part of a niche market has many benefits so it’s no wonder businesses are always trying to identify the USPs that put them in a niche. Some of these benefits include
- Competition: If your business is in a niche market, there will be less competition. This is because as businesses become more specialized, it is less likely that other businesses will become direct competitors to them.
- Focus: Being part of a niche market means you can focus on making your niche offering perfect for a select group of people. On the other hand, targeting a larger audience means you need to customize what you sell to many different audiences that differ greatly in demographics and psychographics.
- Expertise: Businesses that offer services to specialized markets will be more experienced in their offerings, truly understanding their audience and how their business offers value to them. This expertise makes it difficult to attract audiences outside of your niche, but will make it easier to foster brand loyalty in a short period of time.
What is Niche Marketing?
Niche Marketing creates collateral around your product that is specific to a niche market. For example, you can run a sale on your travel website for a honeymoon to Bali, but keep all other offers at the same price. This means that your marketing will revolve around couples looking for a honeymoon destination on a budget. Given that travel websites can offer travel packages for single people, couples, and families, this marketing campaign will be very specialized compared to the previous one.
Before choosing to run a marketing campaign, it’s important to gauge how successful the campaign will be. This means looking at the possible size of the audience you want to target and deciding if it is too small or a good size to target. Niche marketing can be tricky but if you know your audience and personalize your content, it shouldn’t be difficult to engage with the right people successfully.