Odds are that even though you run a small business, you’re not a professional marketer or some type of marketing guru – unless, your business is marketing and then this post probably doesn’t apply to you. But for the rest of us hustlers and small business owners, learning everything we can about marketing is going to make growing and promoting our small business that much easier and that’s a win in our book. Today we’re talking about niche markets – what a niche market is, why you might want one and how to define a niche market for your business.
Lets get started.
What is a Niche Market?
A niche market is a subset of a larger market with it’s own particular needs and preferences. Often times you’ll hear marketers talk about market segments and although that’s similar to a niche market it’s usually more generic in purpose meaning that we segment by age, gender and so on. These same segmenting tactics are used in defining a niche market but they help us to pinpoint a group of people who are not only similar in general but also in specific details. For example:
Segmenting a market – we sell to women with young children between the ages of 0 months and 3 years because our product is diaper bags
Defining a niche market – we sell to women with young children between the ages of 0 months and 3 years because our product is diaper bags AND they also want a stylish boutique-level diaper bag that keeps them highly organized and falls within a moderate price point.
Basically, defining a niche market is drilling down until the particulars are highly defined making it a super-powered version of segmenting.
How Do You Define a Niche Market?
Defining a niche market really isn’t as difficult as it may sound or look. To do so, you’ll take any current market segments you have and then take it one step further. Some of the most common ways to define a niche include:
- geographic (the buyer’s precise location – this can be a physical location or it can be a way to purchase – big box store, farmer’s market, craft fairs, holiday boutiques, etc.)
- price (high, moderate, discount)
- demographic (gender, age, income level, education level, employment, etc)
- quality of goods (premium, high, moderate, low, cheap)
- psychographics (values, interests, attitudes)
Remember a niche market is a subset of a larger market or market segment that has particular needs and preferences. While you’re looking to drill down to your niche market with the items bulleted above, you should also be asking yourself what the needs and preferences of this particular group are. You want to figure out what problem you can solve for them, or what need doesn’t seem to be being met by other products that are out on the market. This will help you target your niche market and outline the ways you’ll promote your product or service to them – by helping them with a problem or fulfilling a need!
Tip: Once you’re drilled down and gotten the specifics on your niche, the best way to define a niche is to basically write up a potential buyer profile. It sounds a little intense to make up a bio for an ideal customer, but we’ve seen it work dozens of times. An example would be:
Heather is a young mom who works part time. She has 2 small children – Sarah (2) and Aiden (6 mos). She’s at work a few hours every day so she drops her kids at a babysitter in the morning. She loves working out, so the kids also get to hang out with friends athlete gym play place why she works out 4 times a week. In addition, Grandma watches the kiddos on Friday mornings while Heather is at work, because that’s her babysitter’s day off. Heather is extremely organized and she’s a great mom because her diaper bag always has a change of clothes for each child, extra diapers, snacks, any medications they may need, and a variety of small toys or educational activities in case the kiddos need a change of pace. In addition, Heather loves high style, and because she’s often out and about with the kids she’d like a diaper bag that displays a sophisticated look but still is made of child-friendly fabrics so that it’s safe and effective for the kids. She’s looking for a superhero diaper bag – stylish for mom, organized so that everything has it’s place, not to big, not to small, easy to clean, and cost effective.
Why a Niche Market Can be Good for Your Business
We’ll cut straight to the point on this one and you don’t have to look far to see why a niche market can be good for your business. Here are just a few:
- it’s a great way to attract new business
- great way to increase in sales
- simplifies the process of promoting, pricing and distributing your product or service
- lowers the cost of promotion, pricing and distribution of your product or service
What niche markets are you going to serve? We’d love to hear about them in the comments.