What is a market niche? Simply stated, it is a narrowly defined group of potential customers.
In business, you'll want to avoid mass marketing, which can be extremely wasteful of limited resources. To use an analogy: Why cast your fishing pole in the ocean when you can maximize your chances of success by fishing in a smaller pond?
Most business owners can create greater return on investment by narrowing their focus to appeal to a highly specialized segment of potential customers; effectively making a big pond, small.
By targeting your prospective clients with a razor-sharp focus, you are also able to cater more specifically to their unique needs, which cannot be as easily achieved by a mass-market competitor.
A well established market leader manages to the general needs of the masses, generally not to highly specialized needs. By casting such a wide net, market leaders in effect limit what they can do, and the choices they are able to provide to their customers. The level of detail required to provide superior service to a highly specialized audience does not typically align with a volume-driven mainstream market leader's approach.
The great news for small business is that a highly specialized group, the market niche, exists within every mainstream market. Every small business has the opportunity to be the big fish in a small pond, and profit handsomely from a unique business idea.
There a several advantages to identifying a market niche:
There is tremendous opportunity to create a singular, powerful brand by focusing best practices that can be attributed to the success of the established market leader - and then leverage those product ideas, improve upon them if necessary, to ensure added value to your market niche.
As a business owner or salesperson that serves a niche, you have the chance to know your customer's wants and needs more personally, and because you have the ability to cater more specifically to their desires, you can become their supplier of choice! Business planning and managing to what your client wants will always be key to your success.How do you find your market niche? Just one simple question can point you in the right direction:
Here's a quick example: Fifteen years ago, when training for a marathon, I learned that I needed to re-fuel during long runs. I wondered where I could stow my food, which consisted of a gel substance called "Gu". I needed to carry the Gu packet in a place that would not interfere with a comfortable pace during the run.
The little key pocket in the front of my running shorts wasn’t going to work. I really needed shorts with an outside zippered pocket, just the right size for a Gu, in the back of my shorts, right in the center, just below the waistband. I searched high and low for the perfect running shorts, but found no such shorts existed among the big brands.
Today, with the increased popularity of marathon training, it's easy to find the perfect, highly-specialized shorts with a back zippered pocket - just the right size and place to store a Gu packet.
Too bad I am no longer running marathons. This is a perfect example of effectively servicing a market niche.
Now think about your own industry and who the major players are. Ask yourself, what do they do well; what do not do well; how could you do things better? It just takes a small idea to make a large and powerful impact for the customer.
Take that one idea and create a niche opportunity for your business. By providing a unique value on a smaller scale, very soon you may become the big fish in a small pond!
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