Niche market is derived from the word niche. According to reference.com, a niche is the function or position of a species within an ecological community. As per urbandictionary, a niche is a position or activity that particularly suits somebody’s talents and personality.
Cambridge has defined niche simply and relevant to our context as a job or position that is very suitable for someone, especially one that they like.
What’s a niche market?
A niche market is a small but profitable segment of a market. It does not exist by itself, but is created by identifying needs that are being ignored by the competitors, and by offering solutions to satisfy them.
It is a small market that you can sell to and fully satisfy. It has to be an accessible market. For instance if you love cakes, you might consider selling only the wedding cakes. The wed-to-be becomes your niche.
If you would like to be a successful online entrepreneur, then you have to learn how to do niche marketing. Niche marketing is segmenting the larger market and fully focusing on a specific segment. When you understand the niche’s needs and fulfill them satisfactorily, then you become an authority in the niche. When you win the hearts of your customers, then you are in business.
Niche markets versus broad markets
A broad market is a general market. It’s a market with a wide range of buyers and sellers trading on a variety of products and services. It can be an industry. For instance, health is a broad market.
A niche market is a narrow and specific market. It’s a segment of the broad market. It’s actually a sub market. For instance in health, asthma management is a niche.
Being specific is being terrific. The more specific you are to the needs of your market, the better it is for your business. Customers love specialists. They love special treatment and always want to feel special.
The psychology behind niche markets is one for personalization, knowledge and relations. The fact that you are dealing with a small number of customers, who have similar needs, will tend to give you that opportunity of serving them whole heartedly. Coupled with passion, then the journey to stardom will have already started.
Features of a niche
There are several features of a favorable niche. This is what makes a niche a goldmine and ideal for an online entrepreneur.
- A niche should have a very specific need. There have to be a need and you must be willing to provide the solution.
- A niche should be specific. A small niche pays off fast. It also ensures that your solutions are specific to a particular need. With this, you end up developing a very loyal following.
- A niche’s needs should be solvable through your products or services. If not, then it is no longer a lucrative niche to venture into.
- A niche should not be too competitive. If you find it hard to become an authority in a niche, then it’s still broad and you should seek a narrow niche within the chosen niche. A good way of knowing the competitiveness of a niche is to do an exact keyword search. How is it done? Go to google.com and search for “your keywords” (your keyword in quote marks eg “birthday gifts” or “web hosting”)
Niche Marketing Approach
Product Approach – If you have a passion for a product, you need to look for people like you. There are people who love the product just like you or those you feel that once they consume the product, they will love it. These people are your niche market.
An entrepreneur who is diabetic, happens to notice a particular type of insulin that serves him better and he decide to look for those people who are diabetic and sell it to them. He promotes the product and helps the group.
People Approach – If you have a passion for a group of people, then you will need to study them and see what they might require, and provide a solution to them. The group becomes your niche market.
A doctor who is passionate about children decides to open a pediatric clinic to serve children from the community. She gets satisfaction treating the children but also makes money.
Interest Approach – If you are passionate about a hobby, then you will seek those others who are also interested in the hobby and provide them with what you feel you lack. The enthusiasts will become your niche market.
A skater might decide to sell skating shoes and boards to other skaters. Therefore, as he enjoys skating together with others, he also making money.
Talent Approach – If your passion is a talent or skill, you will need to identify the talent or skill buyers or consumers and target them. These buyers will become your niche.
A singer and celebrity decide to produce T-shirts that she sells as she performs. Her fans are happy and she makes money.
Geographical Approach – This is selecting a niche depending on the geographical market needs. This approach can be used to combine with the other approaches to further define the niche market.
For instance, the skater might decide to focus on selling skating shoes and boards only in New York.
What’s needed to succeed in a niche
To succeed in a niche, you should ensure the following:
You must be passionate. Passion is the fire that keeps fueling your dreams. This is what will make you work for long without getting bored. With passion, you are guaranteed that you will be serving the niche, wholeheartedly, for a very long time.
You must be highly knowledgeable on the niche. The more knowledge you have on the niche the better and easier it is to become an authority in the niche. If you are not knowledgeable enough, embark on learning. This can be done as you build your business. Authority does not come overnight.
You have to connect with the market. The feeling of belonging is a vital sign of potential success online. When you are in sync with your customers and you feel that your understand them right, then they feel that you are the best person to serve them. Connection solidifies satisfaction and eventually creates loyalty.
Servitude – Business is about being in service to your customers. The entrepreneur is usually the one who serves the customer. The customer is the king. And it should remain so.
How to identify a niche market.
Since a niche market is usually never there, it is the work of an entrepreneur to identify it from the broad market. There are four strategies that you can use to identify your niche.
Behavioral – You can identify a niche market by analyzing a particular behavior of the market. For instance a travel agency can analyze the behavior of its clients; business, families and groups. Based on their profit analysis, it decides to settle on business travel and offer highly specialized traveling solutions for the business people.
Demographical – This is selecting a niche depending on the age. When the travel agency decides to pick youth travel as a niche, then their decision will be made based of the demographics.
Psychographical – You can select your niche market depending on lifestyle, interest and activities in common. When the travel agency decides to specialize on golfing safaris, then he has picked a niche market.
Geographical – Our friend, the travel agent might decide to offer travel services only to traveler from Canada. The choice of the country is based on their geographical preference and their deep knowledge of the place. The country becomes the niche market.
Identifying a niche market is not difficult for a passionate person. Through the networks, one can tend to easily identify others that have a similar passion. Usually, the best business will be based on niches within your passion. For instance a fashion enthusiast who is passionate about dirty jeans will tend to identify with youths who are also passionate on jeans fashion.
Identifying a niche makes it easier to sell because the entrepreneur tends to be interacting mostly with the market both formally and informally.
It is good to note that niche markets are small markets within bigger markets. It is always worthwhile to deal with a niche market and exhaustively satisfy its needs than deal with large markets that you will sparingly satisfy. Also remember that large markets have high competition hence high possibility of increased marketing efforts and resources.
When selecting your niche, select a niche you are passionate about, knowledgeable and easily manageable. It offers you a chance to be specific, to improve your knowledge and reduce on resources.
Remember that being specific is being terrific.