Selecting a Niche Market
Which comes first, product or market? Develop a product and then find a niche market for it or find a target group, then develop a product to meet its unique needs. The approach is obvious. A successful business model is often market-driven.
The first step in selecting a niche market is market research. It helps you to figure out which group of people you want to reach, and what are their needs, so that your marketing efforts and dollars would be well spent.
Once you have relevant information, you can develop, or refine and repackage existing ones to meet the specific needs of your targeted group of people. You can craft your sales copy to reflect your business and the needs of potential customers. It takes the guesswork out of building your business.
Steps to Selecting Your Niche Market...
1. Brainstorm. What are your passion, knowledge and expertise? Talk to family members, friends and clients. These are valuable sources of input and feedback.
2. Market research. You cannot skip this important step. It will take time and effort. Do your research. Market research involves...
- a. Analyzing your potential niche market. What are the unique needs of the targeted group of people? Is the niche market over supplied or undersupplied? Is the niche market large enough to run a profitable business? If your potential niche market is large enough, you can make a good living taking into consideration that your targeted group of people has needs that are not served elsewhere.
If you identify a niche market that shows no competition or very little competition, don’t dive into it straightway. It could be that the particular niche market is not profitable. Others have tried and abandoned it. Or the niche market is too specialiazed making it too difficult to reach. With niche marketing you have to do research and proceed with caution. - b. Analyzing your competition. Assess your competitors in your selected niche market, and determine how you can position against them. The way to know your competitors is to study them. Review their ads, brochures, and websites. Look for their key selling points, pricing, delivery and service. Do what your competitors are doing but better. Fill up what’s currently lacking in your competitors. Create your Unique Selling Position (USP)by creating a niche within a niche.
For example it is very difficult for a new marketer to break into the highly competitive ‘Internet Home Based Business’ niche. But you could start a niche within a niche - ‘Internet Home Based Business for Newbies’.
3. Analyze your business. Ask yourself 2 pertinent questions:
- Am I able to customize my products and services and business identity to meet the special unique needs of my potential niche market?
- Am I able to reach potential customers in a cost-effective way?
Your chances of success are very high if the special needs of your potential niche market match your passion, knowledge and expertise. You will exercise creativity and be more productive if you enjoy what you do, and at the same time make a good living.
Niche marketing is focused and specialized. So, the key decisions are what you what to focus on and specialize in. Once the key decisions are made, the next step is to create new products or refine and repackage existing ones to cater to the uniqueness of the selected niche. If you are able to speak specifically and directly to the unique situation of your targeted group, you will be able to command higher pricing. You also established yourself as an expert in your niche market.
Don’t just sell for the sake of selling. Carve out your niche!