What’s a niche market anyway
A niche market is a small, specialized market category. This type of category is usually characterized by a strong demand for a specific product. By using a niche market, a business person could gain a foothold in a small, protected sector that has strong needs.
A niche market can be illustrated, as follows, using the market for children: The large, logical markets (needs) are always attended to first. In addition, these markets are served by large, powerful companies, which makes it extremely difficult for the small businesses to also compete.
Examples of these markets include children’s toys and clothes. These items are needed by every child and are already being sold on a big scale. The secondary markets come next. Products that fall under this category are still fairly popular, but enjoy much less demand. An example of this would be a general, educational program for children. Finally, there’s the very specialized market that is the niche market. In comparison to the total market, the number of customers who fall into this market segment is very small. However, the needs of this market segment are much stronger than normal, day-to-day needs.
An example of a niche market product is school equipment for a child who is left-handed. If the child experiences problems, the equipment should be able to completely resolve the child’s problems. This child’s problem may be much greater for the child, and possibly also for the parent, than it may seem to outsiders.
The child’s entire life will be affected by this, as he may struggle at school to use scissors, instruments and notebooks. General skills, such as tying shoelaces, are also presented by the teacher to right-handed children. Hence, the child who does struggle, or the parent, there would be a huge demand for this product.
It is less sensitive to competition
Every business person knows that competition in a specific market category can seriously harm your profits. The more competitors there are, the more parties are taking a slice of the pie. Competitors often have less influence in niche markets than in general markets.
The reason for this is that the variety of products, which are available to the niche market, is limited and the consumer demand is so high that customers will most likely acquire all of the products that they can lay their hands on.
Less sensitive to economic slumps
Successful niche markets do not depend on a person’s discretionary
(surplus) income, but cater to an essential need. Here again, you can compare the equipment for left-handed people to clothing. A business, which offers a
product that fulfills a vital need, will be less sensitive to economic down fall.
People will still buy the product.
The risk of competition from large competitors is small
Many successful, small businesses have often been shoved out of the market by a big business. Niche markets are too small for large businesses to enter into. In addition, the usual tactic of creating a price war won’t be successful, because – as was already stated – niche markets are insensitive to price.
Big businesses are usually only active in mass markets with large turnovers. Their tactic is to start a price war, which they can maintain for an extended period of time, since they have sufficient funds to do so. The small business eventually snaps due to the price war, because it can’t handle losses to the same extent as the large business.
Choose your niche market now
Niche markets offer you the opportunity to obtain a strong position in the market and to make large profits. Identify a specific demand for a product now and let your business grow sustainably
I know you have heard about niche marketing ideas, software from other source but I have explained in simple terms what niche marketing is all about. Deciding on a suitable niche to market relies on you.
Word of warning, what works for others will not necessarily work for you. Conduct an in depth research and come up with your own market category/segment(niche)