Market niches, what they are and how to identify them!
If you are a small or medium business owner and are starting to sell your ideas, finding your market niche is essential. Furthermore, due to the high volatility of the market, constant reviews of the already defined niche must be made, making it an interesting subject even for already consolidated businesses .
By identifying the market niche, it is possible to develop more effective marketing strategies , ensuring that all the money invested is being used efficiently, generating financial expansion . However, it is difficult to carry out this study due to its specificity. Therefore, this article aims to explain what a niche market is and how to identify it!
What does Niche Market mean?
Before thinking about what a niche market is, it is necessary to understand that market segment refers to a broader portion of consumers with similar tastes, characteristics and needs. It is a broader cross-section of an already determined consumer market that is represented by a specific profile called a persona .
The subdivision of a company’s segment is called market niche, it is a very specific audience that is rarely served in the desired way within the segment. It is a much more restricted market with very particular needs, which is why it is rarely served in the desired way, it is defined by a persona different from that of the segment.
Niche market example
Let’s consider the crafts segment that encompasses several items and a specific persona, with their respective needs. Within this segment, the number of people looking for decorative vases is increasing, as they are rarely manufactured and have a high cost. Therefore, this is a niche market, as people look for specific items within the artisanal segment and their needs are little addressed, in addition to being defined by another persona.
Importance for small and medium businesses
Why is defining your market niche so important?
A company when entering the market is faced with numerous difficulties, as well as: competition, unassertive marketing, lack of prominence and low level of specialization . All of these problems can be solved simply, with a well-defined market niche.
Therefore, the need to define a market niche is extreme , as it will be possible to stand out quickly, invest more assertively and obtain great results, in addition to the aspects analyzed below:
Targeted marketing – Marketing requires a well-defined market niche, it is necessary to know the particularities of consumers to have a very efficient advertising plan. Furthermore, investments in the area may be reduced because it will not be necessary to reach a high proportion of people, making dissemination centralized, assertive and cheap.
Limited competition – When entering the market, it is normal for many of the companies already experienced in the field to have high credibility and it is unlikely that your business will stand out. However, when working with a different audience, it will be possible to avoid established competitors with market analysis .
Originality – Many people do not feel satisfied consuming from businesses that do not particularly meet their needs. Therefore, presenting something new that includes specific characteristics will make many people choose to buy from your brand , as this will completely satisfy customers’ desires.
Know your services well – It is necessary to know well what is being offered to customers, otherwise the lack of excellence could lead you to bankruptcy . You need to constantly study your products and know the possible causes that made the customer come to you. Agile and assertive solutions convey reliability .
Therefore, the entire strategic part described above will make the revenue obtained by your company highly leveraged, as, in addition to increasing profits, it will reduce costs that did not generate the ideal return, build customer loyalty and make your business increasingly consolidated.
How to define a market niche?
In this topic, the main practical method for accurately defining your market niche will be discussed.
A highly recommended means of carrying out this definition is market research. With it, it is possible to analyze in depth various forces that make up the market, both external, in terms of the general public and their tastes, as well as internally, to improve your business’s standing in the marketplace.
In this way, customers in the segment can be studied according to their preferences , considering geographic, psychographic, demographic and behavioral aspects. Therefore, your ideal market niche is clearly established and so is his persona.
Furthermore, through market research, many other beneficial attributes can be brought to your business, as well as: the ideal location for the establishment (if it does not already exist), competitor analysis , greater compliance with customer expectations and greater understanding of the market as a whole, from the broader segment, to the more detailed and specific part, which would be the market niche.