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.
Four Niche Market Examples
1. Environmentally Responsible Customers
Everyone cares about the environment. Many consumers, especially millennials and Generation Z, are making their buying decisions based on the impact the products they purchase have on the environment.
Therefore, we are seeing organizations taking advantage of this niche by offering eco-friendly, vegan, and cruelty-free options for conventional products. Just about every mass-produced product is also produced for a niche of consumers looking for a green alternative.
2. Animal Lovers
What market brought in $75.38 billion in 2019? If you are thinking of something in the technology field, you would be wrong. The business of owning and caring for pets in the United States is a multi-billion dollar industry.
There are endless pet products mass-produced. However, some pet owners are looking for something unique. For example, some pet owners use GPS products to track their pets. Others are looking for personalized products with images of their pet on them. Some people want organic, vegetarian, or vegan food for their pets. Organizations that can address this niche and maintain communication with their customers have the potential of being successful.
3. Videogame Lovers
The term “gamers” has grown to envelop console gamers, mobile gamers, PC gamers, and more. There are over two billion active gamers on the planet today. One billion of those actively spend money to support their hobby. In 2018, the gaming industry raked in over $137 billion.
There is a niche of gaming-related clothing, accessories for mobile gamers, ergonomic products for gamers, and products to personalize gaming hardware within this massive market.
4. Remote Workers
The year 2020 has brought a new market to the forefront, which is remote workers. In the pandemic’s wake, millions of people are finding themselves working or studying from home. Many are using video communication software. Within this group, there is a niche of those who want specific decorations, accessories, and tools to accomplish a particular task.
The list is endless. One example to consider is that many people are wearing masks. But within the billions of people wearing masks, there is a handful who want to have a mask with a Star Trek or a Star Wars character or emblem. This is just one more of the many niche market examples out there.
Fusion CPA is an Atlanta-based accounting firm. We work with small businesses that have identified their niche markets and help them address financial issues, such as taxes, bookkeeping, and IRS compliance. We would love to show you how our services could benefit your business. Click here to learn more.
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