Have heard of “Jack of all trades and master of none”? It rightly emphasizes the significance of specializing in a particular product, service, or market rather than being a generalist. It is true while talking about the concept of Niche Marketing.
Niche marketing is targeting a defined segment of the population with a specific product. Niche marketers focus only on one product or one target market instead of focusing on general products.
Every business has a target audience, but within that target audience are smaller subgroups of people that are defined by its own unique needs, preferences, or identity that makes it different from the market at large. These smaller subgroups are called niche markets and are a rich source of marketing opportunities.
For instance, Coca-Cola markets Diet Coke as a niche product for a segmented audience since it targets a specific group i.e. Health freaks.
Coca-Cola Diet Coke contributes more net profit than the classic coke. It is one of the reasons why companies like IBM and Coca-Cola have changed their marketing outlook from a single market to multitudes of smaller markets to realize more profits.
Nearly every market can be refined and a niche can be defined based on price, demographics, geographics, and psychographics.
The niche marketing strategy can prove profitable to businesses as it:
- Enhances customer relationships
- Reduces competition as the product and services offered are quite specific
- Increases visibility with unique product or service which stand out in the market
- Word of mouth growth as the credibility and trust of the customers remains with the product.
While on one hand niche marketing helps to stand out from the competition, it can also sometimes results in increased competition in an already established profitable niche.
Launching products for millions of odd-great Indian middle-class was once the dream of every marketer. But that class has now fragmented into individualistic consumers who flaunt their respective differences.
The products like Calcium Sandoz Woman, Amul Calci+ milk, and Horlicks for women are prime examples of marketers finding niches, positioning these to educate specifically women about the importance of them remaining fit for their families.
The consumers get hooked to these niche products that offer certain specific attributes that are perceived to remain with them. It results in market expansion along with an intact loyal customer base for that product.
For example, Raymond suiting, which is perceived to be a high-end, premium product is for the upper-middle classes and the rich.
Niche products will always make customers happy as it serves them with what they want. More and more niche products and services will occupy shelves in the years to come. Although technology and social media are bringing us closer together, it also means that the competition is growing stiff.
It is a worldwide market today, which is why if brands want to stand out among the competitors, they need to find a niche.
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