What Is A Niche Market? Types Of Niche Market
Niche Market : While there are more than 7 billion people in the world, there will be a small percentage who have very specific needs that not just any company will be able to satisfy. These “few” problems in common represent a huge opportunity for certain businesses or brands that address aspects that no one else cares about. That’s where the niche markets come in.
Let’s take an in-depth look at the issue and how, given its low demand, a company can really find a golden opportunity
What Is A Niche Market?
A niche market is a very specific part of a consumer group. It is composed of a small number of people or companies that share similar characteristics and needs. They represent a great market opportunity by having such defined qualities.
There is a common mistake when talking about niche market, since it is often considered as a synonym for market segment and it is important to clarify that they are two different concepts. Below, we share some of its dissimilarities.
Difference Between Segment And Niche market
First, a niche market represents a small part of a market segment; one cannot exist without the other. The market segment represents a much larger group of consumers and the niche focuses on unexplored or little-known groups.
For example, psychology is an extensive branch. The market segmentation could be divided into couples therapies, occupational therapies, or therapies for adolescents. However, a niche in this segment could be somewhat more focused, such as those specialists in psychotherapy in English for expatriate women. So or more specific?
This group, although it requires psychological support, has very defined needs that perhaps very few specialists can cover. Therefore, those who do will have an enormous level of competitiveness and greater possibility of being contacted to give therapy, since they are practically the only person capable of providing that service.
If we take this example of differentiation in some physical product, we can put a cake store and a specific niche of that branch could be those consumers who are looking for a vegan cake (which in its ingredients does not contain anything of animal origin). Pastry shops, there are many. Vegan pastry shops… not so many.
Characteristics of a niche market
Knowing the characteristics of a niche market is very important to make it easier for you to identify yours. These can be the following:
- Consumers who belong to a niche are more likely to buy and are willing to pay what is necessary to satisfy their need. They are understanding of how difficult it can be to meet what they need and appreciate finding a brand or company to help them.
- The number of companies or businesses that can satiate a niche market is not high, so there is no great level of competition. In some cases, there are unique companies that cater to you, without having a single competitor.
- They usually settle for exclusive products or premium prices, due to their low demand and customers are committed to the brand that provides them with what they need.
- Although a niche market is made up of a small number of consumers, these can be enough to provide profitability.
- The products offer very specific features. Customer problems or requests are quite common among them and can respond to their needs with the same solution.
- Marketing campaigns focused on niche markets tend to have more responses and better segmentation.
Regarding the last point, it is also vital to emphasize that a marketing strategy for a niche market cannot be the same as that of any other segment. We tell you more below.
What Is A Niche Market Strategy?
A niche strategy is one that focuses on delivering marketing messages to a small group with similar needs. They respond to little or no market demand.
The content generated is very special and the segmentation is very specific, since it only speaks to a certain percentage of people. It could be said that a strategy of this type has an advantage: knowing very well to whom it is addressed. Therefore, it is more accurate and has a higher level of conversion.
Companies or brands that are dedicated to meeting the needs of a niche market require greater specialization and know everything about the subject. A poorly focused strategy could mean that the small group you are looking for simply never gets to know about you (we’ll tell you later how to find your niche).
Five Types of Niche Market
- Age group
- Groups with special conditions
- Group by gender
- Group by occupation
- Group by ideology and values
1. Age group
Age is a very general market segment, but it can have very specific needs for certain groups. Examples include:
- Ice cream with alcohol for adults
- Toys for boys and girls from 2 to 3 years old
- Senior Care Products
- Beauty products for women in their 40s
While each of these groups share the same quality (age), they have specific needs that a company can help them meet.
2. Groups with special conditions
Consumers with special conditions are also a niche market that not everyone is willing to explore. But, those brave to specialize in needs of this type, have very grateful customers and willing to pay whatever it takes. Here are some examples:
- Left-handed shops (Ned Flanders loves this)
- Anti-frost products for older adults
- Pastry shops for people with diabetes
- Toys for children with autism
These niche types are part of a market segmentation, but their very specific qualities allow these companies to have greater competitiveness and the preference of their customers.
3. Group by gender
While gender segmentation can be fairly general, it does have specific characteristics that a company can take advantage of to start a business. In addition, today it is not only vital to meet the demand of those who define themselves as male or female: there are other genders that have needs that determine their lifestyle and not all businesses offer adequate options. For example:
- Pubertal blockers for transgender youth
- Clothes with printed phrases for non-binary people
- Binders for trans people
- Makeup for elderly women with skin problems
- Styling creams for men with dyed hair
Genres can have very marked needs and you can encourage yourself to have a very specific business that is part of the day to day of your niche customers.
4. Group by occupation
People’s occupations may have specific needs that only a certain number of brands or businesses can offer. Some examples are:
- Stethoscope Shop for Doctors
- Medical Uniform Shop
- Stationery for architects
- Creative products for graphic designers
- Job search platforms for journalists
These and more occupations can be attended by your company, it is only a matter of detecting the most specific qualities and the objects of desire or need of these.
5. Group by ideology and values
Currently, consumers are increasingly looking to acquire products or services from companies committed to their values. These can be social and environmental, among others. Some examples are the following:
- Vegan food restaurant
- Clothing brand that supports indigenous communities
- Environmentally friendly personal care products
- Sale of organic products that support animal shelters
Focusing on the needs of these niches is an excellent opportunity to have loyal customers and, in addition, become a socially responsible company.
So that you finish understanding the importance and intention of a niche market, we share some examples of great value.