A niche market is a fraction of a broader market. The niche market is characterized by having a unique set of demands and preferences. When a business focuses on a niche market, it aims to cater to a small group of customers who have specific tastes as opposed to targeting a broad market.
When a business focuses on niche markets, it can provide a product or service that mainstream providers are ignoring. When a company identifies its niche, it can build loyalty in a way that organizations that are trying to market to everyone can't. Usually, these smaller markets or the smaller subsections of a larger market are ignored because large companies do not see them as being profitable.
Some characteristics of the niche include:
- Interests and hobbies
Businesses can be profitable targeting a niche, but it requires personalized attention. The reduced customer base is looking for something that specifically meets their needs. Since these products may not be mass-produced, they are going to be more expensive. If customers are going to pay more for a unique product, they need quality assurance.
Communication with the target audience is a must. Customers need to know what products you offer and how these products meet their unique needs. They also need to know why they should trust you to meet their needs.