What is Niche Marketing?
Niche Marketing is only relevant when a business is in a ‘niche’ industry that is specialised in a particular topic or even more niche, product, that can be marketed to narrow target audiences – a small segment compared to that of normal marketing efforts.
Advantages to Niche Marketing
There’s less competition for businesses in niche markets – and businesses that do enter your market tend to be diversifying so won’t have the total focus your business has on that market. That’s not to be said that you won’t have ruthless competition from those businesses fighting for sales in your market, no matter how small your segment may be.
Knowing your target audience is another huge advantage of niche marketing. Having immersed your business in a single market, you have the ability to be a specialist and earn the credibility that comes with that expertise. Niche markets tend to house a narrow group of a similar demographic, their wants & needs are similar, and niche audiences “hang out” in similar places – making them easier to target, and easier to understand.
Becoming a leader. People look to experts and those with similar interests. If your business can distinguish itself as the go-to place for this particular topic or product, then you can be sure you’ll soon gather a fanatical following of passionate customers. Brand loyalty is usually higher in niches where good businesses and information is hard to come by so they’ll be thankful you’re providing for them. It can also make marketing easier, cheaper (and free), when your customers talk to others in the niche, they may want to mention your business as the leading place to go; word-of-mouth being a great tool for niche marketing.
With there being less competition in your market, and with a better understanding of the target audience, creating marketing campaigns can be much easier and often leads to reduced marketing costs. Unlike others, you already know your market, where they gather, what content they want to see, and what gets their attention, this can all feed into a cheaper marketing strategy that gets results. Niche markets are more emotionally-driven than financially, so the price of the sale won’t be as big of an issue for a customer, it’s more about how they’ll feel after they’ve purchased it.
Disadvantages to Niche Marketing
There will always be limited growth in a niche market, because a niche can only grow so big. It’s at this point that a lot of niche businesses decide to diversify their business in favour of growth – expanding into similar realms of the market.
Unsure how to start a niche business? Think big, and then think specialist.
For example, a market for water would include everyone on earth. Niches of water may be sparkling water, still water, mineral water – and then I could think about what groups of people would buy certain kinds of water, like for sports, so a healthy vitamin and mineral water.
Another example we’ll look at is shoes. We all wear shoes. Most of us have more than one pair, and they serve the same function but for different purposes. I.e. trainers for running, football boots, work boots, dress shoes etc.