What is a Niche Market?
A niche market is a small part of a larger market that has its own specific needs, which are different from the larger market in some way. For example, the market for computers is huge but there are niche 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 broken into the market before. But sometimes it can be easy to find a niche. Take, for instance, a broad product like jackets. The target market for jackets is literally every human on earth, but as you start to name types of jackets niches begin to appear. For example, vintage women’s trenchcoats are a niche market as it would cost more than average for something vintage. The product is limited to women, and trenchcoats are a style of jacket that only a selection of women would enjoy. Therefore the niche market for vintage women’s trenchcoats are women, who like trenchcoats and are willing to pay more for their jacket. This niche market is a lot smaller than the original market for jackets.
Niches can become even smaller. Pixie Faire provides designs and support for people to create their own dolls clothes, while also providing a marketplace to sell these things also. This business is remarkably niche as it speaks to people who are collectors of dolls, and those who are interested in making their own doll clothes. This niche market can make it hard to find your community but they are doing a great job!
What is clear from these two examples is that a niche is very direct and small so it can be hard to make a profit. One way to combat this is to spend time getting to know your audience and investing money into reaching them on every platform possible. Selling to a niche market can be challenging but it is not impossible.
Why Do We Define Niche Markets?
As mentioned above, knowing your audience is very important if you want to succeed in selling in a niche market and defining it is how you do this. Research is needed regardless of the size of the market and there are other steps to follow.
- Before you choose what to sell you should look into competitors and find out how they are communicating with their market. Maybe the market is oversaturated and demand is low, making it hard for you to sell into it.
- Once you put your niche product on the market, reach out to people who fit into your niche and invite them to test the offering themselves. Gather feedback that could help with understanding your market better and take criticism positively.
- Explore user testing and research consistently so that your niche offering is always fit for its market. This also ensures that you can move into new markets or offer more to your existing market before your competitors.
Benefits of Niche Markets
Being part of a niche market has a lot of upsides so it is no wonder businesses are always trying to identify a USP that places them within a niche. Some of these benefits include
- Competition: If your business falls within a niche market there will be less competition. This is because as businesses become more specialized it is less likely that other businesses will be direct competitors to them.
- Focus: Being part of a niche market means that you can focus on making your niche offering perfect for a select group of people. On the flip side, targeting a larger audience means that you need to tailor what you sell to many different audiences that differ extensively in demographics and psychographics.
- Expertise: Businesses that offers services to niche markets will be more experienced in their offering, really understanding their audience and how their business offers value to them. This expertise makes it hard to appeal to audiences outside your niche but will make it easier to grow brand loyalty over a short period of time.
What is Niche Marketing?
Niche marketing is creating collateral around your product that is specific to a niche. For instance, you may run a sale on your travel site for honeymoons to Latin America, but keep all other offerings the same price. This means that your marketing will be revolved around couples searching for honeymoon destinations on a budget. Considering a travel website can offer travel packages for single people, couples, and families, this marketing campaign would be very niche compared to previous ones.
Before choosing to run a marketing campaign it is important to gauge how successful it could 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 hard to engage with the right people successfully.