Some brands break through by positioning themselves as leaders in a limited market. The niche market is interesting for getting a business off the ground efficiently and quickly. By focusing on a specific target segment, the company is able to offer an offer that perfectly meets consumer expectations, while avoiding high competition.
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What is a niche market?
A niche market represents a small market segment. It brings together a very specific clientele whose needs are not satisfied by the existing offers on the market. The products or services offered are then very specialized to provide a relevant and adapted response to the customer’s problem.
The niche market is characterized by the fact that the company is an expert in its field. It is the opposite of the mass market which seeks to address a much larger target.
The niche market is an effective way to target a small audience interested in the company’s offer which will turn into customers of the company.
Even if the consumers are small in number, the profitability of the niche can be significant, because the competition is less strong and the sales potential is significant.
Examples of niche markets
There are many niche markets. It should be noted that there is no need to have a brilliant idea to set up in a niche, but that the company must respond to a demand that has not yet been met by market players. generalists.
As an example, it is possible to cite the market for electric sports cars, a niche that Elon Musk seized by creating Tesla.
Other niche examples include: the cat bar market; sales of equipment for the elderly and disabled; vegan, organic and French bakeries; cosmetics and care for curly hair; children’s sportswear or specialized large size shoes.
All markets can be segmented. Niches can be very diverse as long as there is demand from a small group of people interested in the supply.
What is the interest of the niche market for companies?
First of all, in the niche market, the competition is very low. It is a small market that allows companies to easily position themselves as experts in their sector.
Working in a niche market opens up significant business opportunities. Just because it’s restricted doesn’t mean the business is too. Indeed, it is necessary to be present where the competition does not have the capacity to propose an offer corresponding to the public concerned. It is easier to become a leader in a small market than to face well-established giants in a generalist market. The brand also acquires a certain notoriety more quickly.
Next, the niche market helps reduce costs and effort. It allows the business to focus on high impact actions to achieve the most success with the least amount of effort. Production volumes are lower and products can be sold at higher prices. Likewise, communication and marketing are carried out in a targeted and effective manner. It is then useless to invest in large campaigns.
Moreover, even if the number of consumers is reduced, they are often more loyal and attentive to the offer offered. They are also more likely to trust the brand. It is then easier to create a close relationship with them.
How to find a niche market?
There is no specific way to find a niche, but here are some tips for finding ideas.
Identify a topic
One of the starting points is to reflect on one’s interests, passions and areas of expertise. An interesting topic or idea may emerge.
It is also possible to perform brainstorming between collaborators, create a mental map with all the ideas that arise and then refine them as you go.
Once the subject has been found, it is necessary to study it more closely by estimating the demand, defining the target, developing a competitive analysis. This makes it possible to highlight the potential and the market environment which will be decisive for the validation of the niche.
If the company realizes that the idea already exists and that the sector is saturated, it is not a good sign. Then you have to start the process again. Conversely, if it observes that the market is not exploited, it is a green light! She has every interest in seizing it.
Study customer behavior
The niche market meets a customer need. It is therefore judicious to carry out an information watch to target their expectations, their desires, their blocking points, their centers of interest, their motivations.
It is therefore necessary to make a study of potential customers. The more the company understands and knows its audience, the more it can offer a relevant response. You have to be able to listen to consumers and offer them what they can’t find from the competition. It is therefore essential to be responsive and anticipate their needs.
Build on audience demographics
Studying demographic segments can be interesting to find market segments to turn into niches. The company can thus determine a specific age group and deduce from it products or services which would be adapted to it.
Anticipating market needs
Another way to find your niche is to study market trends. It should be noted that markets are constantly changing and adapting to consumer needs.
It is therefore necessary to succeed in anticipating trends and scrutinizing changes. To do this, it is possible to do research on Google, by keyword, and see what comes out of it. By typing a keyword in the Google search bar, it suggests terms related to the query. A niche can then be detected and give rise to a new type of product.
It is also possible to carry out benchmarking, in order to study the market, existing offers and the competition. From this, a product idea can emerge.
To go further, download this guide to conducting market research and find out how to carry out relevant and effective market research.