There are many definitions of a ‘niche’ market but essentially they’re a subset, a smaller segment, of your existing target market. This is very important because it means they may already be aware of you and are already prospects for your company’s offerings.

Members of your targeted niche will share a similar set of characteristics. You can capitalize on that by satisfying those common needs and catering to their particular interests. They can be extremely profitable customers if you provide them with just what they want.

It all begins with knowing the details of your wider audience. Who are they? What are their interests? What do they purchase? What do they read? What TV shows do they watch? Your niches are the separate subsets of this total market – these can be broken down by such demographic factors as age, geographic location and income as well as by more subjective categories such as personal taste and preference in entertainment.

Just identifying a niche segment isn’t sufficient to guarantee marketing success. It must enable you to achieve enough sales and profitability to make it worth your while setting up a specific campaign. Some of the basic requirements of a good niche group to target are:

• It can be measured quantitatively
• It is large enough to generate a profitable sales volume
• It is accessible to your company’s distribution channels
• It will respond to an affordable marketing spend
• Repurchase intentions can be forecast

As an example, assume your company manufactures sporting equipment. A typical niche within your larger audience would be males 18-25 who play a competitive sport on weekends. Once you’ve identified the niche and which of your products to sell into it (deodorants and products for the treatment of sore muscles are two product categories that would sell well to this niche), find suitable channels of communication to get your product in front of them. You could market yourself at their sporting fields through sponsorships or advertising in event programs for instance.

Here are three ways to capitalize on the opportunities that niche markets represent:

1. Provide something that meets their specific needs

Members of niche markets see themselves as being relatively unique. The benefits you promise them from whatever you’re selling must have some sort of special appeal to them. Most niches respond to offers of something that’s new or really exciting. You might need to bring in a new product or service, or modify an existing one to cater to them.

2. Communicate in their language

Every niche has its own language whether its computer jargon with IT enthusiasts or the latest ‘in’ phrase among the teenage market; you need to learn it so they’ll understand you when you’re talking to them. Communicate with them from the position of someone who knows them and understands their particular needs. Communication extends to the visuals you use in your advertising as well – match the images in promotional materials to reflect the appropriate age group, clothing styles and so forth of your niche market group.

3. Investigate and test before committing

Niches are really a new market area that you need to understand before charging into. See what your competitors are doing in their marketing but try to find a unique point of differentiation that will enable you to stand out from the others selling to this group.

Then, before making a large financial commitment for stock or advertising, use focus groups or group discussions to give the products and materials a test drive so as to gauge what the likely wider market response will be.

Information in this article sourced from Ran One.

Operating in a niche can be very cost effective as well as enabling your business to become a leading player in its field. A niche market lets you target your sales messages with greater precision; the more specifically you define your niche the easier it is to cater to the shared interests and needs of the people or businesses in that market. A great example of niche marketing comes from an entrepreneur by the name of Frank Kern. He markets a product for parrot owners that he guarantees will teach their parrots to talk within 30 days. This one product nets him an estimated $20,000 per year and is just one of fifty niche marketing sites he’s in the process of setting up.

What is a niche market?

A niche market is a group of people or businesses that can be described as:

• Sharing the same interests and requirements
• Having a need or desire for your products
• Sharing the same communications channels
• Large enough to produce a profitable volume for your business
• Not presently being targeted by a large number of your competitors

You need to find areas where prospective customers’ needs aren’t already fully satisfied. Analyze any other businesses operating in this market area and the quality and features of the products they offer. You then have to create a competitive advantage by offering a value-add that isn’t already available.

Clarify what you’re doing

Estimate just how much time, money and other resources will be required to profit from this niche. Meet with your team and prepare an outline of the project. Identify what is needed to develop the product or service to a marketable stage, what marketing investment it will need, and the timeline for its development and launch.

Create your niche proposition in detail

It would cost a fortune to set up a business that sells all kinds of books online and could compete with Amazon.com. They’ve had ten years to grow into the world’s biggest bookstore and would probably be impossible for a small operator to successfully compete against. But you could profitably cater to a niche of the book retailing market – for example, publications for owners of classic Fords or people interested in the art of silk painting, and succeed because of your specialization. Consider every aspect of the product itself. What’s needed to make it the most attractive option available to your niche and how will it be marketed? Go through everything in detail with your chosen niche in mind; the language you use, the packaging, and how it will be sold are just some of the details that have to be worked through. Be sure that the product is right, the pricing is acceptable and your marketing efforts appeal to your audience before moving ahead.

 Information in this article is sourced from RAN ONE, Inc