Niche Market for Business

Success in business is often associated with the ability to find and penetrate into the "niche" of the market. Niching today really became a whole trend in marketing, embodying a number of innovations in the field of market research and product promotion. The niche of the market, like any niche in general, by definition, is something small, at least imperceptible at first glance. Smaller companies become competitive when they are struggling for a limited share of production in a market that they themselves have chosen. The meaning of choosing a niche market is to translate the game into own field (even very small), and then use the advantages that own field gives to any player. The niche of the market is a limited type of business or sphere of economic activity with a sharply defined circle of consumers.

Niche Marketing Definition

Niche marketing in its pure form is typical for small and medium-sized companies with limited resources, doing business on specific (non-mass) products, produced in small batches, and is focused on using the most accurate targeting tools, highest possible sales and low prices. Niche marketing targets on this or that specific segment of the market with insignificant or absent competition.

Let’s find out which of the following would best benefit the development of niche marketing. Thus, market niches can be the result of:

  • Targeted marketing. This is the orientation towards a stable part of the market that is stable in time but very small in terms of capacity, which large companies cannot or do not want to fully absorb (that is, satisfy all requests of consumers in this market) and where the competition press has been weakened for a long time.
  • Vertical marketing focused on the search for the so-called vertical niche market. This is a search for ways to implement one product together with functionally similar products by consumer properties for different consumer groups (in several market segments simultaneously). An expensive way of vertical marketing was the development, production, and sale of various devices for each individual market. A much cheaper alternative was to produce general-purpose products capable of carrying out different tasks depending on the specific sphere of use, thanks to the variety of procedures used. Marketing, focused on the vertical niche of the market, rarely means the creation of this niche and its subsequent retention in an unchanged form. In today's rapidly changing world, a very dynamic process is not only the search for a niche market but also work in it. The enterprise operating in the vertical niche of the market should remember that it will have to constantly form a market for its products.
  • Horizontal marketing focused on the search for the so-called horizontal niche market. In contrast to marketing focused on the vertical niche of the market, this type of marketing involves diversifying the manufacturing company, issuing an ever wider range of products or providing an increasingly complete set of services to its customers, regardless of whether there is a close functional between these products or services communication.
  • Cluster marketing. This is the definition of the market niche by forming a circle of regular consumers (the so-called focus group), attracted by a full range of products and services offered, of various functional (industry) purposes, which these consumers can get in one place (from one dealer, manufacturer or supplier).

Examples of Niche Markets

The constant focus on one target segment of the product category turns into a distinctive advantage of the product, which is perceived by most consumers as the most preferable in this sector. And this is also one of the main benefits of niche marketing. For example, Pepsi-Cola is aimed at young people, cars Corvette for those who want to consider themselves young, Сorona beer for careerists, Porsche for those who managed to succeed.

Why Is Niche Marketing Important?

The main benefits of niche marketing are:

  • a) minimizing the time and money needed to enter the market niche;
  • b) minimizing actual and potential competition. These advantages are the reason that even large recognized companies often consciously resort to niche marketing (niche strategy) including its most radical forms for promoting new products or entering new markets for themselves.

Benefits of Niche Marketing

  • The niche approach allows the new company to stand on its feet amid competition and to secede from most rivals, and also provides a valuable set of opportunities and benefits.
  • Less competition. The narrower the niche, the less is competition for the same audience. It is necessary to narrow the niche as much as possible in order to reduce competition and speed up contact with the target buyers.
  • It's more accessible. With a niche approach, the company is saving on advertising, since there is no need to cover a huge range of potential customers. It will take considerably less money to try and polish the correct advertising message.
  • Buyers are more loyal. Work in a narrow niche is centered around creating a base of true adherents. Such fans of goods are the core of the business. These buyers rightly believe that since the company is working in a narrow niche and at the same time in the one that they are interested in, then this company understands them, and therefore will provide them with what is needed.
  • It's easier to reach the audience. When a company works in a certain, not very wide niche, then in time it will recognize its customers from all sides. Understanding the audience will save money and help advertising to hit exactly at the target.