Niche Market: The Greatest Advantage for Entrepreneurs
Why Niche Market: The Greatest Advantage for Entrepreneurs? Before understanding the advantages, it’s required to first comprehend what is Niche Market, Niche Product or Service and how it’s created?
Niche in terms of Business or Commerce is defined by the Cambridge Dictionary as:
An opportunity for a business to offer a product or service that is not offered by other businesses.
The finest Niche would be that minutest thing which you can imagine within any category of product or services. For example: Let’s say Doctor is a category of occupation. Within the doctor’s category a surgeon would be called a niche. Even more refined Niche within surgeon’s category would be a cancer surgeon or the Oncologist. A regular surgeon can’t perform a job of an oncologist.
Similarly in the category of Car-Manufacturers, engine-manufacturing would be termed as a Niche. For example Fiat company manufactures car engines for many car manufacturers across the world. Most car makers don’t want to get into this specialized field of engine manufacturing, as they get the best engines from the industry expert i.e. Fiat, at lowest price possible. If they will start manufacturing engines, it won’t remain as cost effective for them as it is now.
In other words Niche is a specialization. Niche necessarily involves uniqueness, which makes it stand apart from the crowd of general category or from the competition of an open market.
Niche Product & Niche Market:
In the world of marketing it is said that:
A Niche does not exist, it’s always created. A niche market is created by a niche product of service. There are two origins of Niche:
Innovation is different from invention. Invention is: finding out something that never existed before whereas innovation is: redesigning an existing product or redefining a service according to market needs.
A niche product is something that either did not exist before or was not given enough specific attention by the manufacturers due to lack of market research. Niche Product has a potential to create a whole new market because it can provide a better solution to the specific problems, faced by a specific demography.
Niche Product through Invention :
Every Niche Product can potentially create a Niche Market.
For example: Tetra Pak manufactures packaging material for the food products which have a very short span of shelf life, e.g. milk products or fruit juices. It provides a unique packaging solution that increases the shelf life from few days to several months. Tetra Pak has created a completely new market place for the Processed-Food Industry. Before the invention of such packaging products, no one could ever imagine such a huge market opportunity. Tetra Pak is an example of a Niche Product that created a totally new market place.
Niche Product through Innovation:
Innovation is: doing things differently. Product innovation is basically redesigning it for better usability and better user experience.
For example: The Apple II series is a family of home computers, one of the first highly successful mass-produced microcomputer products, designed primarily by Steve Wozniak, manufactured by Apple Computer. This was not an invention but an innovation with few critical changes in the design and it’s applicability.
Apple Inc. created a huge market and a history by producing such Niche Products in a series of continuous innovation.
Now the question is: Once a Niche Product or Service is invented or innovated, how to grab it’s niche market?
Niche Marketing Strategy
Niche marketing strategy involves targeting a particular section of market which has a high potential of connecting to a specific product or services. Instead of forming a wide network in conventional mass-media and large-event marketing, niche marketing focuses on strategically selected venues and media platforms that have high concentrations of these targeted consumers. Social media platforms like Facebook, Instagram, Google Ads etc. have the specialized strength to target the consumers of specific demographics and psychographics.
Niche marketing strategy can be a game changer for a small business which has limited budgets for marketing.
For example: If a company manufactures toys and it designs a particular puzzle game that can be useful for mental and cognitive growth of children. It can get a contract with few prominent schools, that have branches across the country. By such contract they will be able to sell the puzzle game to all these schools. It will be a refined Niche Market for the manufacturer as there would be no competition for them. Their marketing strategy will only target the schools and not the entire toy market.
Niche Market – Advantages for Entrepreneurs:
Opportunity to Become Market Leader:
If you have an idea of a Micro-Refined Niche in any field, and if you are the first mover then you would have the opportunity to become a market leader. Because by the time, the competition will start coming into that Niche your business would already be in the leading position.
For example: Swedish multinational company IKEA which was founded in 1943, is the market leader in the Ready-to-Assemble-Furniture since 2008. It’s because they were the first movers into this Niche Market. Now many companies have copied IKEA’s concept but could not succeed to become a Market Leader.
Psychological Advantage of Low Cost Marketing:
If you have seen a river bed, you would have seen many round shaped beautiful stones which almost appear similar. But the once which have a different color, or which shine brighter will grab your attention and you tend to explore them. Psychological Advantage of a Niche Market is that it naturally attracts the consumer, which will substantially reduce the cost of promotion.
Minimum Competition & Maximum Sales:
A niche market ensures minimum competition for a long time. Until the competitors realize the potential of this market, first mover will enjoy the maximum sales and profits. In the current times of tough competition, if a business can simply avoid competing in the general category it can grow with minimum efforts and in lesser time. At the same time you also get the loyal customers who trust your brand. Loyal customers ensure the high level of customer retention.
For example: McDonald is known for Burgers, Domino’s Pizza is known for pizzas and Subway is known for sandwiches. Their focus never deviated from their signature product or Niche Product. They never encroached over each other’s Niche Market which helped them to retain their specific customer base.
Niche Market: The Greatest Advantage for Entrepreneurs, as it saves time and effort to establish a business within the tough markets. Almost all multinational companies spend millions of dollars every year on research and development. It’s only an effort to find a Super Niche by invention and innovation, before others could find it. First movers always get the advantage of leading the market. It’s prudent to research thoroughly before investing into any business idea. Find a niche and invest your time, effort and money into it. As the famous Indian Industrialist Dhirubhai Ambani has said:
“Think fast, think big, think ahead, ideas are no one’s monopoly”.
Wish you all the best ..!!
Grow higher stay rooted..
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