There’s not just one but many definitions of marketing because it encompasses all the activities that are put into play once the product is created or the service is offered at the time of its delivery to the customers. All businesses strive to create value for customers and communicate the value created to raise awareness and provoke the demand for that product or service.
The benefits of an appropriate marketing campaign are manifold and long-term in nature. A good campaign not only forges good customer relationships and builds brand loyalty. This, in the long-run increases a company’s market share and thus, is a key factor in generating profitability and ensuring sustainability.
Did you know? A niche market does not mean a small market but it is a market comprising only a particular section of society whose needs differ from the other sections and they are offered a specialised product or a service.
What is Niche Marketing?
Niche marketing is defined as the process of channelling all marketing efforts to a well-defined population segment. This segment is unique and this marketing tactic focuses its attention on only this given segment. A niche market is differentiated from other markets by its unique needs, preferences and identifications. For example -
- Baby products like diapers target the newborn babies
- Apple products target rich upper-class people
- Playstations target the kids
- Cruelty-free make-up products are for vegans
Idea behind Niche Marketing
The process starts with identifying a specific segment and figuring out the needs of the customers from that segment. The company then tries to provide a better solution to cater to that need and deliver the same.
Niche marketing is an important form of marketing because, at a place where marketing requires huge capital investment, the same objectives could be achieved through a lesser investment by being segment specific. Thus, even though these businesses are extremely profitable because they serve just a particular segment, they gain minimum exposure as well.
Also Read: What is Viral Marketing? Best Strategies with Examples
Common Ways to Define Niche Marketing
Having your interest in the niche market is a great thing but you must understand some common ways how a niche market is defined. In simple terms a niche marketing is a marketing process that takes place in a targeted market and among specified people who are going to be the actual buyer of the product. Let us understand this point through certain variables:-
Price
Whether the product or service is a luxury item and could be charged a premium amount or whether a company needs to offer it at a discount?
Demographics
To what age group, gender, education or income level does this product belong?
Level of Quality
It is the product for premium customers and requires the best quality or is it economical and can its quality be compromised? Is it machine-made or handmade?
Psychographics
How is the attitude, value or interest of the target audience towards the product or service?
Geographics
Products or services can be country-specific, meaning that what might hold good for one region might not be suitable for another so special care is taken in that direction.
Also Read: Is Multi-Level Marketing a Good Career Option | MLM Career
What are the Types of Niche Marketing?
The goal of niche marketing is to identify and target a specific group of consumers who are likely to be interested in a particular product or service, and then to tailor marketing efforts specifically to that group. This can be a very effective way for businesses to differentiate themselves from their competitors and to build a loyal customer base. Niche marketing could be developed in several areas:
- Pets & Animals: The pets and animal niche is a popular one, with many businesses offering products and services specifically tailored to the needs of pet owners and animal lovers.
- Computers: The computer niche is a highly competitive one, with many businesses vying for a share of the market. Success in this niche often depends on being able to offer high-quality products or services at competitive prices, as well as being able to effectively market to potential customers.
- Healthcare: The healthcare niche includes a wide range of businesses and organisations that provide medical services, products, and information to patients and healthcare professionals.
- Fitness: The fitness niche includes businesses and organisations that offer products, services, and information related to physical fitness and wellness.
- Travel and Tourism: The travel and tourism niche includes businesses and organisations that offer products and services related to travel and tourism, such as hotels, airlines, and tour operators.
- Fashion: For producing and selling fashion products, many businesses in this niche also offer related services, such as styling, personal shopping, and fashion consulting.
- Environment :Understanding an organism's environmental niche can help us to understand how it fits into the larger ecosystem and how it contributes to the overall functioning of the ecosystem.
- Games: A game niche is a specific segment of the gaming market that is focused on a particular type of game or group of players. Niches can be defined by various factors, such as the platform the game is played on, the genre of the game, the target audience, or the themes and gameplay mechanics of the game.
- Home Decor: Home decor trends and products are often influenced by design and lifestyle trends, and the home decor niche can be an exciting and creative area to work in for those who are interested in design and home styling.
Also Read: What is the Best Online Marketing Strategy for Small Businesses?
What are the Advantages of Niche Marketing?
Niche market is really beneficial for each and every business as it helps the sellers to find and reach the actual buyers. Let us discuss the advantages of niche marketing which are as follows:
Less spending on Marketing
Since niche marketing targets a specific segment, the costs incurred on marketing and advertising are substantially cut down.
Less Competition
One of the most lucrative benefits of niche marketing is that since the company caters to a specific segment of society, there is little or no competition because very few people offer the same products or services.
Expertise
Being focused on a product or service based on a particular niche helps the companies to be an expert in the said items. The skills and expertise in one area might help to attract customers to another area.
What are the Disadvantages of Niche Marketing?
Every coin has two sides and that is true for niche marketing. Along with advantages it brings certain advantages along with it self. The disadvantages of niche marketing are as follows:
Less Growth Opportunity
Since it targets just a specific segment, it is limited to a niche and there are fewer options to expand and still be relevant to the existing customers.
Higher ROI not Guaranteed
Even though it is cost-effective but serving a smaller market sometimes cannot fetch high profits.
Marketing
Not all businesses succeed in developing appropriate marketing strategies to focus on a particular group.
New Competitors
Since niche marketing has low competition, new entrants could enter the market owing to low barriers of entry and compete for the market share.
Also Read: Definition, Details and Types of Network Marketing
What are the 7 Niche Marketing Ideas for Specialised Businesses?
To consistently maximize profitability and leave a mark in the industry, seven smart strategies help businesses to get the most out of their niche marketing. These are as follows:
Know your Target Niche Market Inside Out
Niche marketing focuses on a very specific segment of people so knowing just the basics like age groups, genders, income, marital status, etc. is not sufficient to make long-term decisions. A company needs to apply tools like segmentation to define the market it is serving. It goes without saying that the smaller the market, the more important it is to know the customers.
Rethink how to Spread the Word about the Business
While thinking about niche marketing, one must not associate it with a smaller version of regular marketing. It follows a totally different approach because it is on a more customised and personalised scale. Therefore, it is important to plan specially curated marketing tactics like advertisements and campaigns that would attract the segment.
Invest in PPC Advertising
PPC advertising or pay-per-click advertising is a type of online marketing where the advertisers are required to pay a fee every time their ads are clicked by the audience. This ensures that the payment is only made for those advertisements that get actually clicked on. In a niche market, a company is only serving a small section of people so it does not sound prudent to invest heavily in advertisements that are otherwise not for the masses. The PPC advertising technique is most beneficial in this type of market because in this way, the company will tremendously cut down its cost by advertising only to the ones it wants to serve.
Keep your Tabs on Niche Marketing Competitors
Even though in niche marketing, the threat of competition is significantly less, there is always a possibility of facing opposition from the previous ones or risks from the new ones. It is, therefore, important to monitor the activities of the competition to ensure a proactive rather than a reactive approach. A company can be driven out of business, or its technology can become obsolete if it doesn’t keep pace with the environment or its competitors.
For example, Nokia used to dominate the cell phone sector until smartphones came in. its technology became obsolete overnight and it lost a huge share of its market and later incurred heavy losses.
Be Open to New Opportunities
It goes without saying that the environment that we live in is highly turbulent. New technologies are introduced every day and the present ones become irrelevant almost instantly. For this reason, it is highly important for the businesses to keep analysing and always be open to new opportunities so that the product or service that they are offering continues to make sense to the customers. Plans should be made to think about the viability of introducing a new product line, or new technology, establishing a vertical or horizontal linkage or considering expansion. Businesses can also experiment with new products or offer better and more advanced versions of the older ones. Quality should however never be compromised because it is directly associated with the brand image of a company.
Listen to your Customers
Since customers are the driving force behind any kind of campaign, it is important to gather their feedback and work on the problems they highlight while consistently improving the ones they appreciate. Modern marketing is pull-based customer-centric where the customer has the ultimate power over the needs they face and the kind of products and services they require. The word of mouth marketing is extremely powerful and a wrong review could not only tarnish the company’s brand image but would destroy its audience because “one satisfied customer brings in one new customer with him and one dissatisfied customer takes away 10 present customers with him.
Conclusion
Niche marketing is focused on a specific segment of society with differentiating needs, preferences, income levels, genders, etc. It is a more personalised approach to marketing and therefore, steps should be taken to ensure customer satisfaction. This marketing is highly profitable if planned and devised strategically because it has the potential to grow and hold relevance with the environment.
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