A niche market is a focused and targetable portion or subset of any general marketplace. By focusing your business on a niche market you will be addressing a need or desire for a narrow group of products and/or services that is, otherwise, not being serviced by other mainstream sellers. A niche market may, there for be considered as a narrowly defined group of specific potential customers interrested in a select range of products and/or services.
A particular niche market is usually created when the demand for a specific product or service is not met by the normal market supply forces, or when a new demand quickly arises due to some new and specific change, or changes, in society in general, current technology, or the regular environment. Niche markets can exist only for brief periods of time or can be long lasting, often depending on the underlying cause of the niche itself.
Businesses that focus on niche markets often become quite profitable even though they are, by nature, somewhat small in comparison to the mainstream marketplace. This is typically due to the benefits of specialization and the focus on small identifiable market segments even without the benefits of economy of scale so often considered necessary to ultimate success. Niche markets are typically ignored, and sometimes discounted, by larger businesses due to what they consider to be the small potential of such areas of the marketplace. This is, in fact, what makes the niche market available to smaller businesses and opens the door for a significant business potential.
The key to successfully taking advantage of a niche market is to find, and develop, a market niche that has customers who are accessible to you. In the real world you generally need that market gathered closely around your place of business (ie: selling flowers to hippies in Haight-Ashbury during the summer of love). You want to determine that the niche has a reasonable growth potential to support your business, and that is not already owned by one established vendor.
Finding, or creating, a niche market is an excellent way to develop your business quickly. Beware, however, that niche markets sometimes fade as quickly as they develop. Be prepared for this and don't put, as they say, all your eggs in one basket.
[Rol Johansen is an online marketing professional who participates in our blog from time to time.]
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