Feb 202015
 

What is niche marketing?

Niche marketing is a specialized market offering focused on the needs of one tightly-defined market segment.

Usually the niche marketer only offers a very limited product range to this segment. As a result, the niche marketer builds a reputation (brand equity) for being THE expert for providing their products to the market segment.

Advantages of niche marketing

  • Little or no competition
  • Strong relationships with customers
  • Business stability
  • Improved capabilities and skills sets
  • Focused business (no strategy distractions)
  • Price premiums
  • Higher profit margins
  • Generally unlikely to compete against very large firms (segment/offering is too small for them)
  • Significant barriers to entry – market segment is too small for new entrants

Disadvantages of niche marketing

  • Limited growth potential
  • May be reliant on a few major customers
  • More likely to be at risk from major environmental changes (e.g. technology, economy)

Examples of niche marketers

  • Some consultants, with a specialized offering
  • Many websites, particularly blogs
  • Retailers with unusual or specific merchandise, e.g. selling toy soldiers only
  • Specialist engineering firms
  • Non-traditional education providers, e.g. Montessori
  • Professional services, with specialized offerings
  • Manufacturers of specialty goods

What is one-to-one marketing?

  • One-to-one marketing is a different concept to niche marketing
  • It involves tailoring an offering to individual customers (one at a time)
  • Banks (with their databases) often use one-to-one marketing, as are many service providers who are able to tailor their offerings (hairdressers, consultants, and so on)