Creating a successful business in a niche market

 


When picking a business market to enter, you need to decide whether you are going to go for a small slice of a large pie, vying with a lot of other competitors, or whether you are going to choose a niche market with very few or no competitors. Niche markets have a very important advantage in that you don’t have to compete against as many players, and you may find that successfully establishing yourself in a niche market gives you the foothold to build a larger business that covers more expansive markets.

Why do companies enter a niche market?
Just because a market is small does not mean that it is unprofitable. Niche markets are entered into every day by businesses around the world, and often, this process involves a brand-new market for a product that has never before existed, such as Apple’s extremely successful iPad. Entrepreneurs are excellent at spotting opportunities to create markets where there once were none, and it is not always immediately obvious whether these markets will be large or small. Even with small markets, a lot of money can be made.

Niche audiences are also much easier to target, as you can get to know your customers inside and out. Customers in your niche market are often more likely to stay loyal because they may be in consistent need of your product, and they know that you have few competitors. The combination of loyalty and easy targeting can substantially reduce marketing costs.

Business models for companies in niche markets
When operating in a niche market, you need to adopt a slightly different approach to doing business. Quality is likely to be one of your biggest assets – because you are operating in a small market, you can focus on being excellent at what you do. For example, Jatin Mehta concentrated on quality craftsmanship and state-of-the-art manufacturing when starting Winsome Diamonds and Jewellery Limited.

Customisation is another avenue that many niche businesses follow. Because your market has specific requirements and you are rendering your product in small quantities, you can offer custom versions. Bentley is known for its ability to configure its cars exactly to the requirements of their owners, with everything from custom seat covers to once-off exterior paint.




How to be successful in a niche market
Marketing your niche business may be easy due to fewer competitors and readily identifiable targets, but you absolutely must remain active in your promotional efforts. Get your business out there by advertising in the publications that your customers read while being active on social media. Look for specialist pages on Facebook, and engage with Twitter users who are in the market through which your product is offered.

Part of working in a niche market involves planning out your unique selling proposition. Yes, you may not have many competitors, but why do people need your product in the first instance? Explain to your customers why having your product or making use of your service will improve their lives. Do this correctly, and you might create a much larger market than you initially thought possible.

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