What is niche marketing?

In today's economic situation, only big business players can survive and stays in the market scene. Small players don't seem to have a chance to capture even a portion of the market share. But having a good marketing strategy can make it possible for small businesses to acquire a portion of the market. And that strategy is none other than niche marketing.

Niche marketing is one way to make market share feasible. By definition, a niche market usually evolves when potential demand for a product or service is not met by any supply, or when a new demand arises due to changes in society, technology, or the general environment. In layman's term, it a small portion of the market that is mostly ignored by big players because it will not give them high profit in return.

Positioning your small business in a niche market is easier and realistic than competing head to head with big dragons in the business industry. Venturing to this kind of marketing strategy may become profitable even though they are by nature small as compared to the mainstream marketplace. Because most likely, large companies are targeting large areas of the market for the purpose of maximization of potentials and usually ignore small identifiable market segments. This will eliminate the presence of economies of scale and monopoly making it easier for you to create a market entry.

Venturing niche marketing will not require high cost of marketing operations for it usually does not have existing stiff competition. Marketing activities is mostly focused on awareness campaign in order for small business to create an image and let them know of its existence and it is ready to serve their needs in terms of custom-made products and services. Commonly, niche marketers are often reliant on the loyalty business model to maintain a profitable volume of sales.

Some key points that need to be remembered when deciding to venture into niche market, is to find or develop a narrowly defined group of potential customers who are accessible, has the capability to grow fast and not yet owned by one established vendor.

Niche markets can be usually found or created on newly developed residential places, unpopular small towns or groups of people who have distinct buying behavior or taste. One good example is the production of soft drinks which is serving large markets covering different buyers' demographics. Well known big players in this business industry are Pepsi and Coke. But you will notice that there are other soft drink brands being catered in small and far provinces that seems to be not too popular for majority buying public. Manufacturers of these soft drinks are adopting the niche marketing, trying to limit their distribution on small areas and not competing directly on big business players.