Niche Marketing Strategy
A niche market refers to a group of potential customers with similar characteristics and with similar wants or needs. This makes them receptive to a particular product or service. A niche market strategy therefore can be defined as identification of a service or product that is in reasonable demand by a target audience yet, it is significantly underserved by other existing businesses and suppliers.
Small businesses especially benefit by developing a niche marketing strategy than if they were to carry out mass marketing. Eventually, most of the niche markets end up been mass markets once more consumers get to learn about the product or service.
According to the theory of competitive advantage, there are 3 major types of business strategies which include differentiation, focus and cost leadership. Of these 3, small businesses should concern themselves with focus strategy. Niche marketing strategy is the best type of focus strategy.
There are also 2 types of focus strategies which include differentiation and cost focus. Small businesses should concentrate on focus strategy since cost focus might be difficult to maintain without large production volumes. The following are some of the differentiation focus that small businesses are able to attain niche marketing strategy:
- A strategy that is based on the wants and the needs of the consumer is more sustainable as it arises when the mass market is unable to produce the required service or product. For instance, products can be customized to meet particular needs of individuals.
- The strategy can be created if there are cultural and social differences within one community that requires changes to be made to a particular service or product. For instance, milk that is high in calcium or certain types of collector items.
- It can also be achieved by adopting specific delivery channels
- Niche marketing strategy can also be achieved by adoption of particular channels of delivery.
One way of setting up a niche marketing strategy is by thinking in terms of differentiation. To get started setting up this kind of strategy, there are a couple of things that need to be done and they are as listed below.
- Define a target market then focus on it squarely. It is important to understand the needs of the niche market and their lifestyles in order to meet their needs adequately.
- Research the market thoroughly before launching the niche business. Discuss the market with others who can provide objective feedback.
- Determine the demographic details of the market and the potential customers and whether they are interested in high quality, high end products or median quality, low priced items.
- Once the niche business is already set up, talk to customers to find out what they like or dislike as well as any additional needs they have.
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