What is a niche market? 3 things to note when participating in this market
In business, the market is considered a “red ocean” when many competitors compete for a piece of the pie. As more and more businesses enter the market, companies are forced to find a new way to survive. In which the niche market is considered a key to the golden treasures.
1. What is a niche market?
A niche market is a market that focuses on a specific group of people whose interests, needs, and behaviors are different from the rest of the market.
Niche marketing needs to focus on this specific customer group instead of mass advertising aimed at anyone. It will also set your brand apart from your competitors that are also targeting a large market.
Read more: Market Research – A specific guide for every marketer
2. Niche market example: a limited number of niche perfumes
To better understand this concept, take a look at the famous niche: niche perfumery.
The concept of niche perfumery was born to refer to perfumes that are produced manually, on a small scale, with limited distribution. Thus giving the user a unique scent that is unmistakable.
Therefore, the target customers of niche perfumery are not only people of the upper and upper middle classes who can afford it but also need to have taste, knowledge, perfumeries, and patience. It is very significant to the customer group to show their class. They want to have a unique perfume product for themselves.
What makes niche perfumes extremely expensive and picky is because of the costly and exceptional formula, as well as carefully selected ingredients. The goal of niche perfumery is top-quality products.
That’s why niche perfume bottles are coveted and sought after even though they are expensive and don’t spend very much money on marketing campaigns.
3. Pros and cons of niche market
Such a potential market but not many people dare to jump in. So what are the outstanding features of this type of market?
Advantage:
- Few competitors: This is considered the most significant advantage, especially for small-sized companies that cannot compete in the market with established giants.
- Specific customer needs: Because the customer file is not large, it is easy to define the wants and satisfy customers.
- High net profit: niche customers are willing to pay a large fee to satisfy a need that mass products cannot.
- Easily become an expert in the market: You are a pioneer, so there will be many opportunities to make a mark with customers and gain experience.
Defect:
- Finding your niche is not easy. It takes time and effort to truly understand what customers need.
- The market size is too small, not enough for the business to survive.
- This is a risky game because no one has verified it before.
4. How to identify the right niche
To identify the right niche, you need to go through these 5 steps:
- Niche market search: through reports and recommendations on Google, e-commerce platforms. From there you can find out the needs and desires of your customers.
- Research keywords: this is the best direction to help you target what your potential customers want.
- Customer analysis: What makes a victorious niche market is understanding the customer. The more you perceive them, the more potential the market is.
- Choose the right niche: After considering the potential, market size, and resources, choose for yourself the most suitable niche.
Read more: Marketing reports help Marketers track effective campaigns
5. Notes when participating in the niche market
5.1 Thorough research on the market
There are two things to consider when learning about niches: the specific audience you want to serve and the size of the market. Because it is a niche market, the customer file needs to be very specific, from the desired needs to the ability to pay.
Next, is the market size large enough for the production enterprise to make a profit? Is there any possibility of future development?
5.2 Make good use of word-of-mouth marketing
A niche market requires a separate and more thorough marketing plan. You don’t have to spend a lot of money to win, the niche is much more subtle than that.
In niche markets, customers often believe word of mouth because of the scarcity of information to compare. Therefore, generating positive community discussions or comments from previous buyers is extremely important.
5.3 There shouldn’t be just one niche
Putting all your eggs in one basket is always extremely dangerous, especially in a niche market. Constantly innovating and exploring, finding new pieces of the market share is the secret to helping niche companies grow and win more customers.
6. Conclusion
A niche market is always a potential promising land for any business. Hopefully, the sharing of CleverAds will help you have a clearer view of this market.
