Niche Marketing Definition Explanation with Examples

Niche marketing can be explained as a marketing tactic which targets a specific and unique market segment. This type of market is created after identifying the wants and needs of the customer. An organization determines the loophole and makes efforts to deliver the best solution to the problem which was not previously addressed by any other company.

Niche market does not mean a small group of people or a small segment of the market. It includes targeted audience for which companies have specialized offerings. In this way, the company aims to become a market leader within that niche.

What Makes a Niche?

Every market can be subdivided or refined based upon the particular preferences and needs of people within those groups. Some ways to define niche markets are:

  • Demographic base which includes age, education level, gender and income level.
  • Prices can be high, moderate or lower.
  • Geographical niche markets are based upon the precise location of buyers.
  • Level of quality is based upon cheaper, low, moderate, high or premium products.
  • Psychographics niche markets include interest, values and attitudes of consumers.

Marketing to a particular audience or a niche can be easier than making efforts to appeal to a braider market. Such markets have a lot in common in terms of wants, preferences and needs. Understanding and catering the differing needs of every niche will make it possible for the company to directly come in touch with their target market. This has chances to appeal to the attention of buyers and making it clear to them that the offering is specially tailored for meeting their requirements.

Definition of Niche Marketing

Niche marketing in contrast to mass marketing can be defined as channeling marketing efforts and strategies towards a pre-defined market segment of a population. One important aspect that needs to be mentioned here is that niche market does not exist. Rather, it is created through smart marketing techniques after identifying the needs and wants of the customers.

Niche Marketing Examples

Successful niche marketing will help a business expand in many ways. Offering specialized services within a particular product, service or market, companies tend to effectively distinguish their business from that of the competitors. Through using niche marketing strategy, the business can specialize and will be able to attract more profitable customers. Some examples of niche markets include:

Physical Therapist Niches

  • Victims of stroke who have lost their motor skills or mobility
  • Runners who are improving from panthers fasciitis
  • Initial responders of office-related back injuries

Niche of Personal Trainers

  • Expecting mothers within a particular suburb
  • Police / military programs candidates

Alongside these, there are many other examples of niche marketing and mass marketing. Handbags market is a huge market and there are various niches in this market. For example, new moms would want handbags that are both stylish and useful at the same time. There may be college students who want handbags for holding books, women who want bags to hold accessories like keys, credit cards and phones as well as vacationing ladies who are looking for larger beach bags which hold the belongings of the entire family.

Who Uses Niche Marketing?

There are various companies who are using niche marketing strategy in their marketing campaigns. This type of marketing strategy is very useful for small businesses with limited resources. Those products and services that are targeting a specific segment can use niche marketing strategy. Bugatti is using a niche strategy and targets a big fish in a small pot. Bugatti segments its market on the basis of high income and Western countries like Germany, France and London etc.

Other than smaller companies, large companies that are using mass marketing strategy can also opt to niche marketing for few of its products and services. Different automotive company use mass marketing but uses niche strategies for some of it car model i.e. hybrid cars.

Advantages and Disadvantages of Niche Marketing


  • Improved customer relationships: Niche marketing tends to target a specific type of customer group. This group can also include fewer people. Understanding what that specific target market wants and serving accordingly, businesses will be able to nurture their relationships with customers. Business can get to know their customers on an individual level which allows serving them better.
  • Reduced level of competition: When businesses offer highly specialized products or services, there will be very few companies who will be offering exactly the same. The more specific a product or service will be the lesser there will be companies to compete with and the harder it will be to replicate those strategies.


  • Not suitable for small-scale companies: Due to smaller segments, niche marketing approach is considered to be inappropriate for smaller companies and intends to expand in the current market. Smaller markets make it a bit difficult to reap larger profit margins within the market.
  • Chances of survival may fall: Chances of a firm’s survival may decrease if its marketing strategy is solely based upon niche marketing.
  • May not be suitable for longer-term: Niche marketing ideas may not be suitable for long-term marketing strategies. This marketing approach may not deliver adequate business which can result in reduced profit margins.