This month's issue talks about how you can identfy and leverage new niche markets to increase your business in a competitive marketplace.
I'm sure that you'll find the article interesting reading. As always, we are striving to keep you up-to-date, if you would like to recommend a topic for one of our next newsletters, just send me a note. Our topic for next month will be on email marketing tips.
President, Medallion Fulfillment & Logistics
The general economy may be floundering, but niche markets remain strong. A niche market is a narrowly-focused, targetable portion of a larger market. For example, bonsai enthusiasts and orchid growers are two niche groups in the gardening market. Targeting niche markets can increase business during slow economic times and continue to grow your business as the economy improves.
Niche markets reflect the needs of narrowly-defined customer groups that are not being served by mainstream providers. Potential customers share one or more characteristics in common – age, race, gender, ethnicity, hobbies, sports, cooking or other interests – that create a recognizable and quantifiable demand that leads to identifiable purchasing patterns and spending habits. Niche markets often arise from new demands triggered by changes in society, technology or the environment in which we live. They represent the very specific concerns of a small segment of society. For example, as the Baby Boomer generation retires and begins to age, niche market opportunities are increasing in hobby products, easy-care travel products, and personal medical products.
To target niche markets for existing products, look at the benefits your current products provide. It's important to differentiate between features and benefits. For example, many cookies are now sold in resealable bags. While that's a nifty feature, you buy that brand of cookie for the benefit provided: the cookies stay crisp. People buy because they benefit. Determine the characteristics of people who would benefit dramatically from using your product. A group of common characteristics should emerge. Target this specific group by emphasizing the significant benefits use of your product will deliver.
While niche markets will never enjoy the economy of scale, they maintain a consistent and exceedingly loyal customer base. The international reach of the Internet and the global scope of fulfillment and logistics firms like Medallion Enterprises allow even the most specialized niche markets to be profitable. For example, the increase in multiple births resulting from the growing use of fertility drugs has created niche markets in strollers for multiples and other specialized baby products. Injured soldiers returning from Iraq and increasing societal support for disabilities have created strong niche markets in sporting equipment and accessories for physically-challenged individuals.
In the past, it was not possible to profitably market to and serve a potentially small and far-flung customer base. Today, however, Internet marketing and order compilation coupled with centralized fulfillment and logistics services make it cost effective to pursue even narrow niche markets. The key to developing a profitable niche market is to find a fast-growing market specialty with accessible customers that are not already over-served and offer them a unique, high-quality product. There may not be much room for competition in niche markets, but superior quality and outstanding customer service will win loyal customers. In niche markets, customer loyalty is the key to success.
"Letting your customers set your standards is a dangerous game, because the race to the bottom is pretty easy to win. Setting your own standards – and living up to them – is a better way to profit. Not to mention a better way to make your day worth all the effort you put into it."
"Live your life so that when you look in the mirror every morning, you respect the man who stares back."
William J. Ransom