A niche is a small market share. It represents a relatively heterogeneous group of people meeting well-defined criteria and is opposed to the mass market.
Nowadays, identifying a niche is an integral part of a business plan.
A company can have a mass market (example: a financial institution offering bank accounts to all resident of a country over 16 years old) while offering niche products (example: the same financial institution could offer credit cards for post-secondary students)
In the case of startups or SMEs, offering niche products is often the most profitable option because it simplifies communications as well as the marketing of products.
How to identify your niche?
Think about the funnel effect. Take the entire population and eliminate groups little by little.
Visualize your ideal customer by asking yourself questions such as the following:
Are they woman, a man or is it irrelevant?
What is their age group?
What is their occupation?
What is their geographic location?
What are their hobbies?
Example: ABC company offering 100% organic vitamins to promote healthy hair, nails and skin defines its niche as: vegetarian women, 18-40, located in Western Canada.
How to communicate with your niche?
Your niche should be at the center of all your business activities. It is therefore necessary to study it in order to establish appropriate communications and marketing strategies.
Discover their consumption habits, their go-to social network, their interests and their concerns. You will thus know how to better reach your target audience and bring awareness to your offer.
It's important to note that the more specific your niche, the smaller the market share. Be sure to do a thorough market research to assess the sustainability of your business.
Remember, while your products are designed for an ideal customer, they might be suitable for an entirely different customer.
Using the example cited above, ABC company could broaden its niche by marketing its product under the "healthy" label, thus including non-vegetarians.
You can revisit your approach to strategically increase your market share and therefore the success of your business.
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