Niche Marketing Opportunity

A niche market by definition is a distinct segment of a market.[1] It is also known as a focused targetable portion (subset) of a market.[2] Wickipedia etymology for the term niche states, “When used in business the term implies a situation or an activity perfectly suited to a person or a given type of personality.”

Each of us exists and consumes in mainstream society, but we also coexist within our niches. That is to say, we each have our personal interests we pursue while still consuming within the greater whole of society. Therefore, one should not discount the fact we are all potential customers in the many niches of our own personal world.

Previous to our current economic times, niche marketing did not provide as big a return and as a result was oftentimes overlooked. Economies of scale[3] in targeting mainstream provided a higher percentage of revenue, which in turn resulted in a higher return on investment and overall dividend to stockholders.

The formulas for marketing to mainstream have been defined to predict the highest return while benefiting from economies of scale. When it comes to niche markets, economies of scale do not exist and the associated marketing costs are higher resulting in a lower return. This, in the past, has driven businesses to focus primarily on mainstream and trying to maximize profits; and as a result, niche marketing was not pursued.

Even though the proportional return may be lower; niche markets, when collectively added together can enhance the bottom line. In these challenging economic times it is worthwhile to pursue each potential revenue stream providing there is a way to effectively target market within the niches.

The key in niche marketing is speaking to them in their terms and lingo, rather than using the one size fits all catch phrases, pictures and graphics. It is taking an existing product or service which they previously identified as “not for them” and showing them how it can meet their needs.

Drilling down and realizing that people are passionate about their niche, there is an opportunity to develop a relationship with them and close a sale because you meet them on their terms, in their time speaking to their needs. It is worthwhile to accept a lower return, diversify the revenue streams and collectively improve the bottom line. But, it requires providing multiple messages that speak to individuals and smaller groups of people rather than only the general mainstream population.

[1] Random House Dictionary and Dictionary.com
[2] Wickipedia.org, Niche
[3] Dictionary.com, Economies of Scale, “The decrease in unit cost of a product or service resulting from large-scale operations, as in mass production.”