One of the most important considerations in starting your own business is defining your target market; your present and potential customer base. Often, these depend on the very nature of business. Consider the case of antique works of art versus a detergent. As an art piece will command a greater price, it will target the very rich business class people while detergent, a daily need item, will benefit from targeting it across all sections of the society at a reasonable price. It thus becomes important for new entrepreneurs to analyze the size of the target market and even more importantly what section of the market can be addressed. Big markets not only accommodate different players but also allow for rectifying mistakes and reinvention of initial business models. Within the big market, then, the entrepreneur can prepare himself to exploit niche segments. Clearly, there are also certain inbuilt fallacies of business in a niche market. Start-ups, to work in such markets, must offer their potential customers an overall advantage through innovative product or service, best quality at the best prices and direct communication.
A niche market is usually that segment of the total market, which is not served by mainstream providers of that service. One of the major advantages of starting a business to cater to the niche market is that you can spot opportunity ahead of others and start out before others do. Even if there is competition, there is usually only a handful. Niche markets can be developed and explored to their best potential if one has the right eye for opportunity.
Once you have decided which need-gap you are going to fulfil, it becomes important to make sure that the idea is correctly communicated to the market. Since niche markets thrive on a very small line of difference, as against the mainstream industry in which case the services are already existing and known to the customer, there are bigger challenges in terms of marketing strategy, especially building and positioning your brand the right way. For example, if an entrepreneur decides to start a publishing company, one already knows what it is all about. The marketing and communication side is not as complex. Compare it with a decision to start the business of publishing books and other material in the digital form. It is a new emerging niche not being served by mainstream businesses as yet. In such a case, their potential entry into the business and associated barriers must also be evaluated well. The important argument here is the fact that you will need to market your idea of digitalization in a much more informational manner, rather than the traditional persuasive approach. Marketing takes an advisory and educational role in such case. Building and winning trust of the end user is as critical to your success in niche markets.
Here are some useful tips for succeeding in the niche market:
- Choose a niche segment which even if not big enough at present, has growth potential. It should not be directly served by mainstream producers; otherwise your business will face the risk of being gobbled up by the biggies, or by not attracting enough customers. Make sure you give them something clearly different from the current offerings on the market.
- Demand check: Even if your offering is entirely different, it is important to check the demand for it. For example, a gift shop might decide to do away with printed greeting cards and to get into the business of ‘Audio Greetings’ or ‘Door-to-Door Messaging’. This service will have to be clearly defined and pilot tested on customers to gauge demand.
- Targeted approach: Niche markets often target a very small, well-defined and focused group of users. Define this group by as many parameters as possible and make yourself visible at major points of access. Marketing in niche markets begins by brand visibility and making sure they know you exist. Build upon this strategy as your progress.
- Develop Expertise: Niche markets thrive on specialisation and expertise. If you do not have the expertise for the particular business you are entering, build it. Since customer contact and customized services are often required in niche markets, the last thing you would want is to feel lost or sound confused when dealing with your client.
- Competitor Check: Even though niche markets are subject to less competition, the dangers are always hovering over you. If you can enter the market, others will see it and follow suit. Apart from developing expertise, explore other barriers to entry that you can possibly look to. Have your plan for the first two years in place, with scope for contingencies.
In a cut-throat competitive world of unlimited choices, customers have a clear picture of what they are looking for. Almost always. This is good news for your niche market ideas. If you can’t figure out the perfect business idea to implement, go the reverse way. Choose a well-defined target market and explore their needs. List a few business ideas based on their needs, currently not met or not met with enough expertise and skill. This exercise will help you look at broad possibilities, which you can of course narrow down after weighing the pros and cons of each, and your own likes or dislikes.
The trick to capitalizing on a niche market is to find or develop a market niche that has customers who are accessible, that is growing fast enough, and that is not owned by one established vendor already. The question mark in any niche market however remains how best to drive this fast growing market to services? In case of an online venture catering to a niche market, the visibility efforts can be matched online through offline initiatives. A niche market calls for deeper penetration into your audience. The entrepreneurial ecosystem is also expected to expand gradually with such penetration. Till then, the innovations must come from the entrepreneur alone and of course the team!
|About me:Unnati is a freelance writer, author and entrepreneur. From her blog to media initiatives like Times Ascent, HT Edge and The Better India, she is always keen on any writing opportunity that may come her way. Her writing bug extends to her venture www.serenewoods.com, a publishing portal she co-founded early 2009, for emerging authors. She is also the author of Drenched Soul (poetry) and If At All (Fiction).|