What is Niche Marketing? How targeting works
What does ‘ Niche marketing ‘ mean?
Concentrating all marketing efforts on a small and well defined segment of the population. Fundamentally niches do not exist, but are created by identifying, needs, wants and requirements that are being badly represented by your competition or not at all by other firms. Niche marketing is a strategy which is aimed at being a big fish in a small pond. It’s also known as micro marketing.
Advantages and Disadvantages of Niche Marketing
Niche marketing is a sub set of a market in which a specific section of the market is aimed at your target audience. Niche marketing helps define the products features, production qualities, demographics and price structure to meet specific market needs.
One major advantage is that it can be very cost effective , for example if you are offering a product to a specific demographic your advertising could be localized making your marketing costs stretch further.
By having an understanding of your market means you can readily identify the needs of your target audience. You can provide more innovative products, communicate more effectively and determine how you will position your business against your competitors.
Niche marketing, being specialized, has far less competition. For example, if you purchase a bespoke clothing, say men’s suits, there are going to be a select company of trained tailors who can meet this demand.
I had the privilege of working for a select tailor, Huntsman, in Sevile Row, London. They not only made individual suits, they had their own style (Branding) so their marketing was by word of mouth more than advertising on a large scale. They created their own niche market and are still making suits today 169 years later.
HUNTSMAN. SAVILE ROW.
As in any niche market its possible for a business to build their own brand loyalty, this strategy allows you to provide your customers they really need and desire. This also allows for a long term relationships, repeat business and gives you the opportunity for innovation and separates your business from the competition.
Brand loyalty also allows you to reach a larger percentage of people who are more likely to use your services or purchase your products.
There are few disadvantages, one of them being a smaller market size, so the marketing approach is not suitable for a small company hoping to expand in the current market.
Among the advantages and disadvantages of niche marketing there will always be a limited growth due to the small number of customers buying products.
Categories of Niche Marketing
There are three main niche markets; Health, wealth and romance.The niche in the health industry will never slow down as people are always looking for the latest products for example:
- Joint Pain
- Natural skin care
- High Blood Pressure
- Dietary products
- Sports Betting
- Internet Marketing
- Senior Dating
- Wedding Planning
- Online Dating over 40’s
How Targeting Works
When your business has established a niche market how will you market yourself to a small select market.
- The first strategy should be aligning your business to the most profitable groups within your target audience. This will determine the most effective media to reach your customers and make your marketing strategy more cost effective. Many years ago I was a photographer specializing in portraits and landscapes so it made no sense to advertise in an industrial journal or car magazines.
- Segmenting your customers into specific groups will help identify your target audience. For example, your specializing in golf equipment, then you sub market to shoes and again to brands such as Nike or FootJoys.
A further breakdown could include geography, income, age and gender.
These are all used in segmented marketing to help identify a niche market.
- Target marketers analyze the full range of market segments to identify their target niche market and the groups most likely to purchase their products or services.
- Positioning your business in relation to your competitors will determine how you sell your niche products or services. Create a Unique Selling Point and stand out. They key to positioning is not to fight a competitor for the same market but to identify the need in the market and create a niche.
A great example of this was a watchmaker who lived on The Isle Of Man named Dr. George Daniel. He designed and hand made watches which were unique and sold for £100,000 upwards. He created his own niche market and positioned himself as number 1 in the world.
Niche marketing is not for everyone, however get it right and your position in the market aligned correctly and the rewards could be substantial with lower marketing costs. Do you have a business within a niche market, if so let us know your quirkiest niche.