Is your small business ready to increase its market share? Are you wondering how to identify new opportunities for your brand? Are you an authority on your product or a related topic?
A yes answer to any of the questions above could mean an ideal pairing with your brand and a niche market.
What is a niche market?
A niche market is a subset of a larger product or service market. It can even be a subset of a subset. Here’s an example from the pet food category:
US dog food brands include:
- Purina Dog Chow
- Blue Buffalo
- Pedigree
- Royal Canin
- Ol’ Roy
Premium dog food brands are a subset of the dog food category. They include:
Breed-specific dog foods are a subset of the premium dog food category. They include:
- Royal Canin Golden Retriever Adult Dry
Dog food for all dogs – products for the whole dog food market
Purina markets its Dog Chow to all dog owners at every economic level. They purposely market the kibble as affordable and sell it in supermarkets. Equally important, It’s appropriate for all healthy adult dogs. Hence, its message and marketing are broad and inclusive.
Dog food for dogs of means – a subset of the whole dog food market
Blue Buffalo and Royal Canin make premium dog food. Their products are for pet owners with higher levels of disposable income who spoil their dogs. These buyers are active participants in dog culture.
They post their dogs on social media and take them to pet-friendly restaurants and hotels. Their dogs are a big part of their lives. Buying premium dog food is an accepted practice for this category of dog owners.
Dog food designed for one breed of dog – a true niche market product
Royal Canin Golden Retriever Adult Dry dog food’s market is a subset of the premium dog food market. This food doesn’t try to appeal to a broad group of dog lovers. It has only one target: Golden Retriever owners.
These owners share traits with other premium dog food buyers, but they focus on their favorite breed. They belong to Golden Retriever groups and are knowledgeable about their dogs.
Golden Retrievers are a popular breed in the US, but the American Kennel Club recognizes 193 US dog breeds. To appeal to Golden Retriever owners, a dog food brand has to establish their expertise in the nutritional needs of the breed.
Golden Retriever owners are genuine, obsessed experts – any missteps in messaging could be disastrous. Why would a brand choose to focus on this small market when the stakes are so high?
What are the benefits of creating a product or service for a niche market?
Less competition for consumer attention
A subset of a broader product category may have fewer dedicated competitors. It may have an audience waiting for acknowledgment, eager for tailored products and services.
The opportunity to reach an unmet product need
Products focused on a broad category may not meet the needs of many of its members. Imagine if only one kind of shampoo was available. No matter what type of hair it was great for, it would not suit all hair types. Creating a product or service for an unserved audience is an excellent opportunity to build a brand and consumer loyalty.
An opportunity to establish your brand as the authority in a category
If you are the first company to market to a niche, you have a chance to become the recognized authority in the category. An effective marketer, with a great product and a devotion to their customers, could corner an emerging market.
A sound example of this path to success is Annie Sloan Chalk Paint®. In 1990, Annie Sloan set out to create furniture paint busy moms could use to transform old furniture and walls (in as little as a day). She knew her niche market well; she was part of it. She created a high-quality, efficient product and grew her market share in steady increments.
She sold her products where her crafty peers shopped. She taught them how to use her paint. She didn’t try to become a colossal paint conglomerate serving all paint customers.
Her DIY customers continue to be her focus. In turn, they are loyal to her and respect her. Annie Sloan is the authority on Chalk Paint®.
Grow new revenue streams with minor changes to your product packaging
Say your company currently sells organic, small-batch, roasted hickory nuts. Your packaging appears to be Victorian, complete with a golden rocking-chair logo on the front. Your customers are older and use your hickory nuts when they bake.
This branding is a concern. The home-baking demographic seems to be shrinking, and few people know what a hickory nut is.
The back of your packaging does include a label with accurate modern nutrition information. The back label shows that hickory nuts are a dense source of calories, good fats, and nutrients.
With minimal cost and effort, you could create a new front label focused on appealing to endurance athletes. They need light-weight snacks to carry on long runs or climbs. You could use social media to find endurance athletes and educate them about hickory nuts.
With a change to your label and a pivot in marketing, you could build a future for your aging brand.
Appeal to a new niche with minor changes to your marketing
If you own a landscaping firm in an area with scarce water resources, you could turn your focus away from creating lush gardens. Instead, you could appeal to a new generation of renters and homeowners eager to conserve resources. You could rebrand your company as a xeriscaping firm.
In this new role, you could create landscaping using native plants that need infrequent watering or no watering at all. You could even focus on a narrower niche market of clients: the owners of rental properties.
Renters don’t like to maintain landscaping. You could xeriscape rental properties and provide low-cost, quarterly maintenance contracts.
How do you find a niche market?
Begin with your expertise and passions
It’s easy to establish credibility if you know about a subject, and contribute to its social media content. Imagine you are a realtor. You also run the Facebook fan page of a minor-league baseball team. You can market yourself as the go-to realtor for players moving to the area and fans of the team.
Pay attention to frustrations in your daily life
As you encounter a challenge, can you imagine a product or service that would help you at that moment? Likely, your frustrations or disappointments in a situation have common feelings. Assume many other consumers feel the same way. a
Your friends’ and family’s daily frustrations may also be a source of inspiration. How would you solve their most recent challenges?
Watch for emerging products and trends
A decade ago, busy parents weren’t combing the internet for Instant Pot recipes to make for dinner. A few bloggers are now internet celebrities after teaching home cooks how to use this appliance.
A revolutionary product can emerge in any category. And with novel products, service needs may also arise. For example, a new type of vehicle requires a new class of mechanic.
Focus on finding a niche market opportunity for your small business or your expertise, and you’re sure to spot one.
