Nowadays the business market is oversaturated with a lot of competitors. You can differentiate your business from the crowd if you follow niche marketing. Today, we’ll discuss niche marketing and its advantages and disadvantages.
What is Niche Marketing?
Niche marketing is the process of putting your advertisement focus on the particular and unique segment of the target market. Here you exclusively focus on the particular demographic of the customers. You offer them the products that could be most useful to them.
Niche marketing could be different because of the following factors;
- Demographic in terms of age
- Certain features
- Habit or Activity
- Demographic Area
Example of Niche Marketing
Divvies Vegan & Nut-free
Many small brands sell food snacks like cupcakes, popcorns, brownies, and cookies. When people go out shopping and they have got a plethora of options to choose from. There’s also another category that has allergies and they don’t buy food snacks.
Divvies saw this opportunity and focused on this particular segment of the target market. Many businesses were selling cookies and cupcakes and it’s not a unique thing. But selling the vegan cupcake nut-free is a unique idea. It helped the Divvies to differentiate from the crowd and attract target customers toward the brand.
Advantages of Niche Marketing
Some of the main advantages of niche marketing are as follows;
As we know that niche marketing is highly focused and it targets only a particular segment of society. It also means that the sale would increase when you attract the attention of more people. For instance, 10 people buy the products from an e-commerce store A out of 100 people, and the conversion rate is 10%. There’s another e-commerce store B, where 10 people purchase the products out of 1000, and its conversion rate is 1%.
What I mean to say is that store A is focusing on a limited audience. Its conversion rate is higher and the marketing expense is lower. On the other hand, the store is targeting more and spending more on marketing and advertising, and the CR is still lower. That’s how niche marketing helps you to increase your return on investment.
Ideal Customer Relationships
Niche marketing helps you to focus on a very small segment of the target market. The target market would vary from your niche. For instance, your niche is physical therapy and your target market would be women especially mothers that have hip issues and need therapy.
When you have a small database of customers to focus on, then you can pay full attention to them. You can perform personalized marketing by sending follow up messages and emails. Even you can offer them customized services to your limited audience. When you have few people to deal with, then you’re in a position to develop a quality relationship with them.
One thing to remember here is that if your niche is just a small of your target market. Your main priority should be on your niche, not the whole target market. Therefore, you should develop a niche marketing strategy.
When you’re precise about your product/service offer, there’ll be less competition you have to worry about. For instance, hundreds of companies produce knives, but only a few of them offer handmade wooden handle. Out of the dozen companies, there’ll be only a few that offer to carve your name on it. When you’ve become specific and precise about a certain product in a certain category, then you have to face fewer competitors.
The thing to keep in mind is that when you’re precise and specific about the product/service, then your niche market would also be less. Of course, your competitors would also be less. If your competitors aren’t meeting the demands of the target market, it’s a great opportunity to step in and focus on the requirements of the niche market.
One of the most important benefits of niche marketing is that it improves the visibility of your website/platform. As a result, more people would be able to see your product/service.
Businesses and companies that follow niche marketing offer something unique in the product/service. For instance, a gluten-free bakery or a cleaning company utilizes natural cleaning products. Businesses that offer something unique often use the media outlets, newspaper, and radio show to feature their offer.
Niche marketing helps you to improve the visibility of your product/service to the right audience, rather than the crowd of people. The visibility to the right people would increase the conversion rate.
One of the strong features of niche marketing is that it increases the loyalty of customers. It’s because you offer the same products and services that customers are looking for. If they’ve got the intention to do the shopping and you’re completely focusing on them by doing the personalized marketing. The attention of the sellers is the only thing the customer wants, when you satisfy their needs and wants, they become loyal.
When you follow niche marketing, your niche customers would refer your product/service to their customers. For instance, pregnant mothers take childbirth education classes, parental fitness training, visiting maternity clothes stores, and meeting other moms. In other words, your current clients and customers would be your best marketers. They’ll spread the word and share their experiences with others.
When you apply niche marketing by using social and digital media, then it’s highly focused on customers. The good thing is that you’re precise and specific about your customers, their needs and demands, and most importantly about your products. In other words, there are fewer chances you’d make mistakes and waste your resources.
Cost-effectiveness is one of the most important benefits of niche marketing. Some of the successful businesses have got a very big database of customers. They launch d
ifferent marketing campaigns and advertisements focusing on different segments of the market. If you’re a small business owner, and your niche market is just one demographic. You should focus all of your energy on one category.
Disadvantages of Niche Marketing
Limited Growth Opportunities
The problem with niche marketing is that the niche market is very small with a limited scope. If you want quick growth in a short time, then niche marketing isn’t good for you. It’s because the growth is slower and limited due to the small market.
When we talk about the success rate and authentication of niche marketing, there isn’t a guarantee of anything. You may follow niche marketing and apply all the basic marketing things, but there’s no guarantee that it would give you the success that you want.
No Competitors Means No Improvement
Of course, competitive marketing cuts down your profitability and market share by half or ever less. But the good thing about competition is that their new designs and features push you to improve your product/service.
When you apply niche in a category where there’re very few competitors and they aren’t performing well.
Therefore, the growth rate and productivity of your product would reduce with the passage because you have got no competitor to push you to do better.