Do you know that a niche market is a segment of a market where you channel all your marketing efforts?
As an entrepreneur, you can either serve the mass market or a niche market.
Those who serve the mass market often end up creating products or services that serve multiple industries.
However, they tend to struggle to become the market leader for each of their offerings.
This, is, however, different for entrepreneurs in a niche market.
They will create a specific product or sever specific audiences.
Other than allowing you to narrow your scope when serving a niche market, you will gain more credibility and become the go-to brand for your target audience.
Keep on reading as we discuss the benefits of a niche market, how to find your niche, and what to do after you identify an unmet need.
So let’s begin:
A niche market is a focused set of people or businesses who intend to purchase a specific offering.
You can think of this type of marketing as the act of specializing in what you are offering.
When your company or brand offers specific products and services instead of a wide range of offers, you tend to benefit by saving money and becoming more productive.
Moreover, you will also build a comprehensive advantage over your competitors who are generalists.
For instance, in the pet industry, there are pets like cats and dogs,
When creating a business that sells dog collars is a niche market.
The same can be said about cat sweaters and pet GPS trackers.
When you decide to sell to a niche market, you will attract more customers to your product or service.
Benefits of a Niche Market
The following are some of the benefits you can enjoy as a niche market entrepreneur.
Effective use of Marketing Resources: when you focus on a small audience, you can use your resources to find customers who align with your product.
Moreover, these individuals will need your product the most and are most likely to convert.
Niche marketing will also help you to save on your marketing and advertising budget.
This is because a highly targeted audience means that you will have fewer buyer personas.
Thus, you can spend efficiently, targeting specific types of prospects.
More Social Proof: When you align your products or services with a small group of customers, it results in an excellent way to encourage word-of-mouth marketing and positive reviews.
This form of social proof tends to be powerful.
Recommendations tend to carry your business into a larger, potentially more profitable market.
Moreover, mass markets often evolve from niche markets.
So while you are starting small today, you can consider the big picture and start building the foundation that will help you succeed on a grand scale.
Less Competition: Operating in a niche market means that you will deal with less or no competition.
Many companies or individuals lie to serve a number of customers.
By narrowing it down, you will offer a specific product that will help eliminate many companies from the radar of your customers.
With that being said, there may also be fewer customers that are looking for your product or service.
So you will need to enter a niche market that has an adequate audience.
Increased Brand Loyalty: Niche marketing will allow you and your business to improve your brand loyalty.
Engaging with fewer people means that you will find it easier to nurture prospects and build quality relationships.
Your audience will know that you tend to understand their vibe and they will see you as a true partner, rather than a vendor who is only interested in their money.
Finding a Niche
To find your niche you will need to:
- reflect on your passions and interests
- identify the problems and needs of your customers
- research the competition
- define your niche and its profitability
- test your product or service
Let’s discuss them in detail:
1# Reflect on your Passions and Interests
Do you have a hobby or skill that you are passionate about or good at?
Take some time to think and reflect on such areas of intreats as potential niche market ideas.
The following are a few questions that will help your brainstorm:
- what skill comes naturally to me?
- how do I approach problem-solving?
- what topics do I enjoy learning about?
- do friends, family, and colleagues request my advice on a specific topic?
- how do I enjoy spending my free time?
Writing answers to the above questions can help you identify your core strengths.
Moreover, this will allow you to build a niche market idea you already have.
2# Identfiy the Problems and Needs of your Customers
After defining your niche market idea, think of the problems that your target market face.
Ca your passion or interest meet your customer needs?
Do you know their motive to buy?
Conducting market research will help you find the buying behaviors and challenges of your customers.
There are a number of tools that you can use for exploring your customer persona.
You can use them as they will give you a better idea of how your business can provide value to your niche market.
3# Research the Competition
Before you begin devoting your time and energy to developing a brand-new business, you should research your potential competitors.
You may have a viable product idea, however, how many other businesses will you be competing with?
This is where research tools will come in handy.
Some of these are:
Exploding Topics: This one is a great tool that allows entrepreneurs to find emerging trends before they take off.
Here is how it works:
Let’s assume that you are interested in the beauty niche. To find emerging trends, you will visit explodingtopics.com and use the ‘All categories’ filter,
When you click Beauty’, you will get results. You can see your competitors in the market and find your way to shine.
Google Trends: Let’s assume that “Bakuchiol” in beauty trends interests you.
A competitive research tool like Google Trends can help you know who frequently people search for this term.
With this data, you can get an idea of market size and demand.
Answer the Public: In order to find a market around your search term, you can use Anser the Public to find a niche for different product categories.
For example, when you enter ‘Bukuchiol for’ on this site, you can see a lot of results for acne, body, blackheads, breastfeeding, skincare, and face.
Each result will provide a niche opportunity for you to explore.
Ubersuggest: Before going all-in on any keyword, you can use a free keyword research tool like Ubersuggest to get a detailed overview of each term.
Some other tools to use for competitor research are:
- Google keyword planner
You can use these tools to explore the best-selling products consumers are researching and see if your new business can meet their needs.
4# Define your Niche and its Profitability
When you are dedicating your resources and time to a new business it should have the ability to become profitable.
The following are a few factors to consider when finalizing your niche to cater to:
Product Quality: Is your product hand-made, eco-friendly, or premium?
Customer Demographics: What are the age, education, and income of the people you are selling to?
Price: Do you intend to see luxury items or will you price them moderately?
Customer Location: What is the location of your target audience? Are they in a certain country or region?
Customer Value and Interests: Are you targeting vegans, environmental enthusiasts, travelers, or sports lovers?
It is important to note that your idea can be profitable if you research the market and discover similar products, however, few companies sell them.
Make sure to look at the price points of competitor products so you can price yours competitively.
5# Test your Product or Service
You can create a simple website or landing page for your business so that customers can find you.
Offer a trial period of the product and give out samples to your target customers.
With this initial test period, you should not cost a large amount of money.
However, you can certainly use paid ads to drive traffic to your website.
See if your target customers will want to put money towards your product with crowdfunding sites.
Not only you can gain funding, but you will also get your product in front of potential customers.
If the test is not as successful as you hoped, do not scrap your idea entirely.
Go back to the drawing board and find key areas where you can improve your product or marketing.
Examples of Niche Market
Some niche market examples are:
1# Georgetown Cupcake: After leaving their corporate jobs, sisters Katherine Kallinis Berman and Sophie Kalinis Lamontagne pursued their passion for baking.
And thus, they opened up Georgetown Cupcake.
Unlike other bakeries that bake cakes and other sweets, their sole product is cupcakes.
They were able to perfect their recipes by focusing on product type.
2# Drybar: In 2022, the market size of the Hair Salon industry in the U.S. was $48.3 billion.
There is enough for entrepreneurs who intend to provide services in this industry.
That is why Drybar only offers blow-drying and styling services.
In order to give their customers some variety, they also provide a few hair-styling options.
What sets them apart is their unique concept of focusing on one thing and being the best at it i.e. blowouts.
3# Tie.com: In 2022, the global revenue in the men’s apparel market was $499.80 billion.
Moreover, the U.S. alone has $100.5 billion.
This amount proves to be the gigantic potential of the menswear market, allowing Ties.com to create a niche that tends to see specific products.
In the broader market of menswear, this company stands out by only selling accessories like ties, socks, pocket squares, and wallets.
Since their products make up a small portion of the menswear industry, they tend to stand out from the competition.
This is because they can focus on creating unique, high-quality accessories.
4# Dorm Mom: According to Grand View Research, the global dry-cleaning and laundry services market size can reach $79.91 billion by 2027.
People can easily carve a niche in this industry by providing laundry services for kids, men, women, students, and this list goes on.
Dorm Mom adopted this approach by focusing on a specific audience.
Rather than catering to a large population of people in need, they serve only collage students.
By specializing your products and services in a narrow market, you will be able to better use your resources, produce products fasters, and develop a loyal customer base.
Selling to a niche market can be a shorter or long-term strategy, while the key is finding your audience and tailoring everything you will do just for them.