Market niches

Let's talk now about niche markets, about finding your business niche. It is a business that concentrates on smaller, specialized sector of the overall market. For example, a health coach, who specializes in ketogenic diet training, has a business consulting to companies in the hospitality industry particular to a specific area. Or a law firm that only handles immigration cases from Panama. Or a fitness trainer who only teaches Zumba classes in a particular format.

So let's understand what a niche is, it is essential that we understand this part. In a marketplace full of offerings, a niche service or product serves the vital function of differentiating you and your company from the competition. Finding your niche is an extremely effective and low-cost technique for a small business, as trying to cover the entire market in the beginning would be very expensive.

Following the examples I have used above, a small business will do much better by deploying a specialty that will not be fully covered by other businesses in the industry. Think of the niche as a fisherman's hook that will help you catch the customers that you yourself have identified as the most efficient for your business. Most businesses find their niche by offering a new product or service to customers, one that is not usually offered by competitors, almost always in a larger format.

Characteristics of a niche market

You should know the main characteristics of niche markets in order to better identify yours:

• Customers in a particular niche are more likely to buy the product or service and pay whatever it takes to get it. They are more sympathetic to the difficulty of satisfying their demand and are more appreciative of the business that can meet their needs.

• The number of businesses that can satisfy a niche is not very large, so competition is less. In some cases, only one company serves that niche, without any competition (how cool would that be huh?).

• Customers belonging to a niche tend to prefer exclusive products for higher prices, considering the low demand. This makes them more committed to the company that satisfies them.

• A niche is made up of a smaller group of customers, but these may be enough to make the business profitable.

• Marketing campaigns focused on niche markets can have more depth and better segmentation.

Types of niche markets

To elaborate a marketing strategy for your niche market, it is essential to identify it properly, since a poorly focused marketing strategy can make you lose a lot of money and you will not see the fruits. A good strategy knows who you want to reach and how to reach them, has a higher level of accuracy and reach.

Age group

In this segment we will see the different age groups and their specific needs, you should keep in mind that this is very broad, but it can serve as an initial scale for your approach. Examples of niche markets by age group could be: toys for children between 7 and 8 years old, care products for the elderly, or beauty products for women over 50 years old.

Group with special conditions

This particular group is one that not many entrepreneurs are willing to explore. However, those who decide to venture out will have very appreciative customers who are willing to pay whatever it takes to meet their needs. These niche markets are so specific that they allow you to be more competitive and preferred by your customers. Some examples, bakeries for people with heart disease and diabetes, toys for children with neurodevelopmental delay, products against bedsores.

Group by gender

This segmentation can be quite general, but it has some specific aspects that can help the new company to get started. Nowadays we must not only satisfy the needs of the 2 common genders, there are also other genders that need their demands satisfied and not all companies do it. Different genders can have very specific needs and you can carve out a niche in this market. Examples of these groups, hair products for men with colored hair, makeup for transgender people, clothing for non-binary people.

Group by occupation

In this group we should be aware that people with different occupations may have specific needs, which only a certain business group can satisfy. You can identify which occupations can best utilize your products or services and focus more on these. Examples, medical supply store, stationery for architects and engineers, job application for the IT sector.

Group by ideology or values

More and more every day, consumers want to use companies that are in line with their ideology and values. They can be of many types, such as political, environmental, social and others. Focusing on these niches can be a way to acquire very loyal customers, and also create a socially responsible company. Some examples can be, vegetarian food restaurant, clothing store that is made without labor with low wages, environmentally friendly beauty products.

Defining your niche

From a technical perspective there are two aspects to defining your niche, there is the operational aspect and the marketing aspect. From an operational point of view, you have to decide as the business owner the degree to which you will satisfy the demand of your chosen customers with your products or services.

To give you an example, a vegan candy store that also offers classes on how to make your own vegan candy is a good example of a business that has a greater focus on its operational side by defining its niche. Teaching customers how to make their own vegan candy comes from the candy store's goal of attracting customers within the vegan community. And of course it will also better focus its resources on expanding within this same community.

In contrast, look at the example of a gym, which usually serves a niche of local customers, but recognizes the opportunity to grow its business by also focusing on the large number of tourists who come to your city and who require the service you offer. To achieve this goal, you have to focus your marketing efforts on the places where these types of customers you want to attract are going to be, such as hotels, travel agencies, restaurants, tourist sites. In this case you are not going to focus all your efforts on just attracting this new niche of customers, bypassing your existing customer base. You can make small efforts to evaluate the influx of new customers, and adjust accordingly.

Steps to find your niche market

Finding a niche market can have many challenges, as it is a complex task that not every company can and will undertake. In addition, as I have discussed you will be catering to a smaller group with special needs, which requires a greater level of knowledge and depth when it comes to serving them. If you want to serve a niche market, your priority is profitability. To help you find your niche market, here are some steps you can follow:

• Think of a problem you can solve: Many of the greatest ideas came out of the need to solve a particular problem. For example, the cloud storage site Dropbox was born after its founder forgot his flash drive when he had already started his train ride to work. Right then and there he thought how useful it would be to be able to access your files over the internet without having to have it physically with you. There will always be things to solve in the market, it is your job to find out which ones, so that your company can be the one to answer them.
• Search for your ideas in Google Trends: This is a tool that will greatly help you find your market niche, since it will allow you to know the level of demand for your business idea. For example, if at the beginning of the Covid-19 pandemic you had done a search for the products most requested by customers, you could have been very successful selling yoga mats for yoga at home, mouth covers or wa