History has seen many successes of large companies starting out from the niche. So what is a niche market , its advantages and disadvantages and how to accurately determine the potential niche for businesses?
What is a niche market?
Niche market is understood as a small segment of the market or a market gap with the target of a distinct customer group . Businesses choose a niche market, that is, to focus their efforts on the majority of the small market, not compete for market share in the large market, but will follow the business direction of the market’s needs.
Some successful businesses in business niches can include Rolls-Royce – the business segment that likes luxury cars, Tribeco – the first soy milk product on the market, Tan Hiep Phat – niche green tea drink market, etc. are niche products that focus on a certain market segment.
Today’s business market is facing many fluctuations, with the participation of foreign “big players” making it difficult for small companies to market their products or services to the mass market. Although many businesses confidently claim that their products and services are the best or perfect, in reality, not many customers are willing to spend money to buy them, especially in today’s fiercely competitive market.
Being able to define what a niche is makes it quite attractive, but like a double-edged sword, niches aren’t quite an easy bargain either.
Potential niches include: Environmental protection products, Cosmetics niche, pharmaceuticals, Pet products, Travel niches, Gamers, technology, Furniture industry, Remote working , work from home, Local Marketing, LGBT+ Community
Why choose a niche market?
Choosing a niche is an extremely important thing for every business, especially for small and medium-sized businesses and startups. Choosing a niche will give these businesses the opportunity to launch a successful business, and also face less competition and risk compared to a non-niche market.
What is the nature and benefits of choosing Niche Market?
The Nature of Niche Market
The essence of the niche market is to use the gap in the market to create demand. The market, no matter how big or small, has a niche. Once a niche is defined, its scope is constantly changing. While the benefits of the old market are limited, the benefits of a niche business will not be limited.
Benefits of Niche Market
The main benefits of niche markets are encapsulated in the following 7 basic benefits
- Increase customer relationship
- Reduce competition
- Increase visibility/reach
- Creating growth for Buzz Marketing
- Market specialization
- Use less resources and resources than the mainstream market
- Increase brand awareness
Pros and cons of niche markets
What are the advantages of a niche market?
- Undeniably, choosing a niche helps businesses avoid quite a few competitors. Large businesses will often focus on their large available market share while small companies will choose many different niches.
- With a small customer segment, the characteristics of the niche market have many things in common, the needs are relatively specific, the niche market helps businesses create products that hit customer psychology in the fastest way.
- The benefit of the niche market is that it has a higher net profit per product than the mass market, but the small market size makes the total profit smaller.
What is the challenge for businesses to choose a niche?
- The small size of the niche market is not enough to sustain the company.
- The risk of large enterprises entering the niche market will make it difficult for small businesses due to the unequal battle.
- Choose and search for a niche market that contains many potential uncertainties and lacks stability. The reason is that the characteristics of target customers are not fixed, customers are volatile, easily affected by trends.
So how can businesses take advantage and “overcome obstacles” with niche markets? The most important thing is to select and research niche markets that meet the following criteria: few competitors, growth potential, purchasing power and enough scale to be profitable.
How to define a niche?
Above we have just learned about the concept of a niche market? as well as the advantages and disadvantages of the niche market in business. So how to choose a niche market? How to define a niche? The mantra to find a niche is: “The product/service of (the company) I help … (the kind of person) when they meet…. (difficulty/challenging/specific situation)”
- My products help mothers lose weight after giving birth.
- My service helps busy couples when they don’t have time to eat nutritious meals at home.
After at least 7 similar sentences about your product, you can find out the personality traits, demographics, emotional desires, difficulties of potential customers. Once you’ve chosen your main audience, you need to define what the customer wants. From a marketing point of view, customers don’t actually buy the product, they just buy the emotions that come with owning the product.
Choosing a niche, brand or product must create a distinct and acceptable difference with the target customer, in accordance with the underlying need. To accurately detect insight (implicit truth), businesses must carefully observe and analyze the actual needs of customers. Each different approach will create a different market niche and the narrower the niche, the harder it is to reach, the harder it is to do, the more successful it is.
If you have a clear understanding of what a niche is and its advantages and disadvantages, boldly start to find yourself a potential business niche strategy to grow your business.