The concept of market niche refers to a group of people or companies who have certain needs, and who have the will to satisfy them and the economic capacity to acquire the services or goods necessary for this.
Companies, in general, look for a specific market niche, to which the different products with which they work can be directed. Through the market segments, find small and identifiable groups by their behaviors or habits, that share preferences and needs, lacking Suppliers to provide services and items that meet a need.
The term niche market facilitates the work of companies, since they will save both time and resources, since they can directly direct their resources towards a certain type of audience. This will also allow them to come up with a personalized sales plan instead of a more extensive and expensive advertising or marketing campaign.
Focusing on a niche market implies targeting a smaller percentage of the market, but this does not mean there will be less sales or income. By working in this way, companies achieve good results, directing production and operation towards these sectors of the population that demand a certain product.
Obtaining the approval of a niche market, with identified consumers and with specific tastes, will serve to achieve public recognition. This is particularly influenced by specialization in the production and development of articles. Niche market should not be confused withmarket sharethat a company occupies with its products or services.
Characteristics of market niches
Niche markets meet a series of conditions that make them different:
- It is a small group: it is made up of companies or people of a small size compared to the segment of the market in which they fall.
- They have specific wishes: they deal with very particular needs, and on certain occasions they present a degree of complexity, which will make the user willing to pay more.
- It requires specialized operations: the market niche will demand specialized suppliers that have the capacity to satisfy your expectations.
- Interest in solving their needs: customers are interested in buying a product or service that satisfies their tastes.
- Few or no supplier companies: In certain niche markets, where complexity abounds, there may be only one or two supplier companies. In some cases, none.
- Ability to be profitable: despite targeting a specific user, it must be able to provide benefits.
As we can see, the market segmentation to find the ideal market niche for our products and services. In this way we can define which target audience we are going to address.