A niche market is the subset of the market on which a specific product is focused. The market niche defines products, services, or interests that appeal to a small, specialized section of the population. It is also called a small market segment. The niche market is highly specialized, and aiming to survive among the competition from numerous super companies.
A niche market is homogenous meaning that the people within that market have similar problems or needs that you intend to solve. A niche market is characteristically small so it is measurable. Capital needs can also be determined and net profit calculated based on the market size, so you can know if the business is worth doing.
The good thing about niche business is that you can channel your limited resources into efficiently solving the problem of your target audience enough to gain their trust and retain them.
Since you can identify your target audience, you do not need to spend too much on marketing to the general population. You create your brand and market your brand specifically to your target market.
Referral or word-of-mouth marketing is a big bonus in a niche business. If you offered an excellent service to a customer, he/she would recommend you to another potential customer. If you have a website or social media page, you could convince your satisfied customer to write a review of your service on the page. Research has proven that referral marketing is the most effective form of marketing and it is free of charge.
Your customers are easily identifiable and accessible so you can cut out a lot of unnecessary costs in production and service delivery. If you need to use influencers, you can easily identify the right influencers that fit your niche, you may discover that some influencers are willing to promote your services unprompted and for free because they also fall into your target audience.
Niche Market Strategy
So, what do you need? You need a market strategy or in this case, a niche strategy. Here is a list of what your niche strategy should include:
- Carry out a market analysis. Here, you will:
- Select your target audience
- Determine an underserved or unmet need
iii. Research your customer base
- Create your business plan.
- Market your business to your target audience.