Effective businesses analyze their competitors as closely as they do their customers. Studying and evaluating competition help owners decides where to compete and how to position against the competition in each market margin. Global competition requires constant analysis of competing forces. Competitive strategies need to take advantage of opportunities and to avoid threats. Market leaders and competitors cannot fulfill market-fulfilling role unless customer needs and desires are understood and satisfied.
By attempting to expand market size, dominant companies continuously defend their current business against rival attacks. Businesses that are second, third and lower ranks are often called runner-up, or trailing, firms. To avoid being a follower in a large market, many attempt to be a leader in a niche, a smaller market
However, there are many myths surrounding niche marketing and the opportunity it provides for making money. Although many have questioned the possibility of great success by marketing to a niche, or small market group, it can and will be profitable if you do it right.
So how do you separate fact from fiction when it comes to niche marketing and how you can benefit from it?
Here are 3 of the most common myths that surround niche marketing and the truth behind them.
A small market does not dictate a small profit. Sure this can be true, but it is a blanket statement to say the least. Take for example the market of multimillion dollar residential real estate. This is arguably a small market as most of us are not in the market for such expensive homes. But there are some who are and the realtors who sell to them make anything but a small profit. In fact, they probably make more off of one sale than most of us do in an entire year! Therefore, just because you are focusing on a particular segment of a larger market does not make your earning potential small. It makes your target more focused. Think about Starbucks. Who would pay over a buck for coffee? Hmmm. Howard Schulz proved that niche markets can change from a small market, small profit to large market, large profit.
Are you familiar with the old adage, less is more? Well, it’s a phrase that carries on in its infinite wisdom for a reason. It’s true! And it is especially true for niche marketing.
You will never hear of a carpenter who manufacturers handcrafted rocking chairs begin to offer leather sofas. Why? Because he has a specialty and knows there is a very specific group of people who enjoy and appreciate his work. Just the same, you may never hear of a fast food restaurant offering five course meals. Again, they know their market, they understand what their market wants, and they stick to it.
You should do the same! Remember, you can’t sell everything to everyone. You should focus your efforts and continually work on perfecting them. That is how you will set yourself apart and gain the trust and respect of your customers.
If you’ve ever stepped foot in a store that is right ANY store, you know that this is far from the truth. How many times have you walked into a grocery story for a gallon of milk and walked out with a carton of eggs, a candy bar, magazine and bottle of water?
Or, how many times have you walked into a shoe store and bought a second pair because they were buy one, get one half off?
Or, how many times have you stocked up on your favorite perfume or cologne because it was being discontinued?
We’ve all done it. We are consumers and we live in a consumer-drive world. Therefore, people don’t just buy what they need. They buy what they want. Hopefully, you are providing them with both!
Footwear company KLAS Shoes LLC of Bedford offers a full children’s line, under the name Roc-A-Bouts, along with three lines in the adult health and wellness category — Rotasole, KLASFit and Strolleez. Its shoes are sold in at approximately 300 individual store locations nationally, including many independent retailers in the mid-South, as well as some online retail venues. The company was founded in 2008. Not a very good time to establish a company. Gross sales are now over $6 million.
Niche marketing is about focusing your marketing efforts on a particular market segment, or niche and creating a product and/or service that speaks directly to that niche. Niches must be a part of your competitive strategy. As an Entrepreneur, niche marketing is a must.
For example, the pet market is quite large. It includes all types of animals from mammals to amphibians. So, a segment of the pet market might be horses. But a niche takes it one step further. A niche would be something more specific, like polo ponies or riding ponies.
Another example might be the food market. A segment of that market is fruits and vegetables and a niche would be organic fruits.
The list goes on and on and once you truly understand what a niche is, you can then begin to decide which niche is right for you. Niche marketing is all about doing what you love. That’s right! You get to make money by focusing your efforts on something you enjoy. Whether it’s hiking, cooking, painting or fishing, you can create your niche marketing business on just about anything in the world.
This line of questioning will help you hone in on your likes, dislikes, and what really stands out as a topic or area of interest for you. Once you realize what that is, make that your niche! So simple…..
Aspiring entrepreneurs must select a market to go after. Selecting a market niche is crucial. You cannot be all things to all people. Focus must be you mantra. So you must utilize niche-marketing tactics. This must be a part of your competitive strategy. While there are many things you can do right with your niche marketing business, there are also many things you will want to avoid doing wrong. Through the don’ts, you will, most likely, develop a bad strategy.
Here are some classic don’ts of niche marketing that you should avoid:
Make sure not to invest time, money or other resources until you fully understand your niche, have a plan in place and know what it will take to go after it successfully.
Once you decide on which niche to go after, and have taken the proper time and course of action to ensure it is a good one (namely profitable) then go for it! You don’t want to wait too long only to have someone else beat you to the punch.
You can sell your products online, but you can also use good, old-fashioned word of mouth. Tell everyone you meet and know about who you are, what you do and how you can help him or her.
There will always be critics and those who bring negativity to the table. But don’t let them rain on your niche marketing parade! Be confident in the work you have done to ensure this is a good idea, that this will work and that you do know what you are talking about!
Just like with anything else, you will want to avoid potential downfalls with your business. That being said, bring your common sense to the table and you will have a good chance at success. Remember, choose a niche that you enjoy, are knowledgeable in and can fulfill a need for. If you do, the rest will fall into place.