What is a niche market
What is a market niche
Internet marketing came a couple of decades ago to completely revolutionize the way how the products and services are offered globally. One of the important concepts that digital marketing has borrowed from the theory and practice of Marketing is the "Market Niche".
In its most basic definition Market Niche it´s defines as follows: "it´s a group of people or companies that share similar characteristics whose needs are not yet met by any product or service".
But what´s the function of a market niche and what are its characteristics?
Normally all those people who are part of a niche, as mentioned above, has specific characteristics and very similar needs that have not been fulfilled by the market. However, the people into the niche becomes willing to look for answers that satisfy their needs and it´s here where the entrepreneur identifies new business opportunities to fulfill these needs.
Who evluates this niche detects the potential demand that could arise, as well as the lack of products/services that meet their needs. This evaluation provides sufficient information to open new businesses or product lines that are likely to satisfy this market.
In general, the entrepreneurs look for a specific niche where their products can be targeted. However, in order to do this, it´s required to have enough information for decision making factors such as:
- How broad is the niche to start a business.
- To know if there´s possible competition.
- Identify if there´s a product or service that could be a substitute.
- Evaluate if this niche generates a sufficiently attractive volume of purchases.
- Identify the potential buying power of potential buyer groups in the niche.
- Sophistication level of the niche's needs.
Those responsible for evaluating a potential niche market first must obtain information about the product or service they are needed so that a potential solution can be developed.
Differences between a niche and a market segment.
Unlike niche markets, a market segment has broader target audience selection criteria. The following criteria are used to identify market segments:
- Geographic segmentation: selection based on country of residence, urban/rural, etc.
- Demographic segmentation: female/male, age, income, marital status, religion, education, sexual orientation. Family life cycle etc.
- Psychological segmentation: interests, values, personality, etc.
- Behavioral segmentation: purchase frequency, brand loyalty, preferred quality standards, etc..
Difference between market niche and market segments
In general terms:
A market niche is included within a market segment which is larger in terms of number of people.
A market segment contains multiple market niches and each niche has very specific needs.
A market niche, unlike market segments, can generate a huge competitive advantage and a captive group of buyers with very little competition.
As an analogy, the market segment is to a hand-lamp what the niche is to a laser beam.
Examples of niches.
Day care for puppy dogs.
Bottled purified water with an alkalinity of 11.
Organic green food for vegans.
Diamond encrusted Iphone 11 Pro with gold casing.
Female seduction method made for shy men.
Conclusion
For the entrepreneur It's of utmost importance to identify the customer needs, investigate the potential variables the of them, and develop specific products or services to satisfy the.
A niche market will give the entrepreneur to have a captive customer hungry to consume her/his products with Little or no competition to satisfy those needs.