What's A Niche Market?
What niche market will your business serve? If you're planning to start a business, you should identify your niche and plan around it from the beginning. This is an important part of the brainstorming stage of planning. It is possible to start your business, and then try to refine it to serve a niche when you see one, but sooner is better than later here.
A niche market is a sub- group within the larger customer base. Smaller? Wouldn't it be better to try to get a piece of the larger group of customers? Sure, that would be great but it's probably not realistic to aim for that group. You can be sure that a well-established (main-stream) company person (your competition), already "owns" them.
Don't get discouraged... just look closer at that large group. Somewhere within their massive customer base, there's a smaller group of people that aren't quite satisfied for some reason. And the large company can't risk rocking the boat to make the few happy. That smaller group is the niche market that you want.
Heres an example... shampoo. 100 people all use the shampoo that Company A sells. But 15 people in the group have very fine hair. The shampoo cleans their hair but they're not satisfied with the results. Company B figures this out, and offers them the exact shampoo made for hair like theirs. Company B is serving this niche market. Is it profitable? It must be... beauty salons all carry more expensive, hair-care products for that smaller group.
In case you're wondering, small is good! A smaller group is "win-able." You can handle their needs. And they're going to be thrilled that someone has finally offered them exactly what they've needed. That's the basis of the brand loyalty any entrepreneur loves!
Of course,it takes time, creativity and a lot of research to find these targeted customers. That's time well spent because a properly-identified niche market is considered to be very profitable.
Here's another example. Coffee's coffee, right? Maybe it isn't now, but 30 years ago, it was. There weren't many places I could buy a latte, espresso, or other drink like that in Portland, Oregon. Canned coffee like Folgers & Hills Bros. were kings of the home and restaurant market. Coffee drinkers went to regular restaurants and got whatever coffee they served with breakfast, lunch and dinner.
So a little company identified a (very) profitable business ... serving finicky, upscale coffee drinkers. You know who that company was... Starbucks! Now they're a giant in the coffee industry, and smaller companies are trying to identify the "niche" that Starbucks doesn't fill. Funny, huh? Recently Starbucks "discovered" another potential area for growth... instant coffee. We'll see how they do with that!
It's tempting to quit looking before you've got it right. It's hard work, and not an exact science. But there are tools that can help you.
Google has a dandy free tool in their business section, in their AdSense program. Another freebie is the free keyword tool at Wordtracker. These and other tools show you keyword demand (the actual words and phrases being used in searches). These can help you figure out exactly what people are looking for. Because their searches are for your potential niche market. Of course, you'll have to learn to interpret the numbers. Books and articles about SEO can help you with keyword interpretation.
Do your homework now, and find the perfect niche for your business. You and your customers will be glad you did!
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