What is a niche?

When marketing a product or service a marketer must first determine who will be the potential consumer.The overall market is looked at then divided into possible segments.Segments are then divided into even smaller groups, called sub segments or niches. A niche is defined as a specific target group that has special needs or wants for a certain product or service. For example, a travel agency may specialize in serving the travel needs of not only senior citizens but also senior citizens with high incomes and perhaps even those with particular travel preferences. After the niche is identified than all of the marketing for that particular product or service is designed in such a way as to attract that designated group of consumers.

A niche market can be defined using any number of factors.Many companies are trying to position their product based strictly on quality.Consumers who constantly seek out a product or service based on quality can become a niche market but this is not always stable.Many of these consumers are willing to pay a premium price for the product or service if quality is the main factor in determining whether to make a purchase. Yet this is not the overriding purchase consideration for all consumers. There are not nearly as many people willing to pay twice the going rate for comfort as those who will do so for quality. Many other factors come into play in the consumer's decision as whether or not to make a purchase.Some of these factors can be style, comfort, and price, ease of purchase, availability of replacement or reliability.

There are four major steps to defining a niche.These are:

1. Market segmenting-Companies must first define whose needs they are trying to satisfy.No single product or service will accommodate all the potential consumers' needs so tools must be used to single out the group that has the most potential to make the product or service profitable. There are many variables that can used to segment the general population: gender, age and race being just a few. After segmenting the population a niche market can then be defined as the target group of potential consumers.
2. Strategic planning-After defining which group will be the target for a niche market positioning a company can then develop a strategy.Using this strategy a company must then decide which tactics will be most effective in achieving the correct marketing to attract this potential group. Tactical marketing involves creating a marketing mix of four components-product, price, place, promotion-that fulfills the strategy for the targeted set of customer needs.
3. Marketing implementation-After defining the correct strategy for the desired niche market the company then puts the designed marketing into place.This can be a mix of print ads, radio and television, internet advertising or direct mailings.Promotions will be designed that highlight the product or service in an attempt to draw the niche market.
4. Marketing evaluation and control-Even with the most carefully designed marketing process there are factors to take into account.Since the market is constantly changing the manufactures of a product or service must be ready to change with it. A marketing strategy that is effective today may not be effective in the future. It is important to evaluate a marketing program periodically to be sure that it is achieving its objectives and thus the product or service is reaching maximum profit.

Defining a niche is tough to do, but those who intend to succeed in business in the future must find and conquer one. They must become the dominant name within it. They must provide great products and services that demonstrate expertise, over-deliver with quality and provide extremely high levels of support to all.